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How did PCP work out in the end?

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  • Banned (with Prison Access) Posts: 150 ✭✭rovertom


    I was thinking it might have been worth while exploring in my circumstances as my annual driving is approx 8000km per year so the GMFV should be decent enough.

    Are there any used car PCP calculators around I could do some comparisons with?

    Loads of calculators online but you will have to take an educated guess at the gfv that might apply. There is little to no benefit over a longer hp deal if paying interest on a PCP. It's no cheaper, and PCP ties you down more in that you have to act at 36 month stage.


  • Registered Users Posts: 1,887 ✭✭✭hooch-85


    rovertom wrote: »
    It doesn't work great in practice. You won't get a good interest rate and therefore works out quite expensive. Hp is a better option really.
    You will find that the gfv will be set very low as condition / value of a 6 year old car can be more unpredictable than a car coming back in at 3 years.
    In short, a 5 year HP deal should work out similar in terms of repayments as a 3 year PCP. The Hp gives you far more freedom. You can just keep paying for the 5 years and keep it at end or you can walk into a dealer at 3 years, 4 years or whenever and they will happily trade it in, clear any outstanding finance and set you up on a new one.

    I agree with this, I bought a new car in 2016 (Fiesta ST) and traded it in July with 2.5 years remaining on my HP, got a fair value for it for the mileage I had done and bought a more expensive but 3 year old car (MK7 Golf GTD) on a new HP. Repayments pretty much the same but I had a few grand of equity built up on my trade in.

    There is a lot more freedom to HP than the general public think.


  • Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    I was thinking it might have been worth while exploring in my circumstances as my annual driving is approx 8000km per year so the GMFV should be decent enough.

    Are there any used car PCP calculators around I could do some comparisons with?

    Depends on your circumstances, it is worth approaching dealers and asking for quotes. volvo and mazda both have some nice low interest deals at the minute.

    Personally I am on my 4th pcp contract. (the first of which was a 2nd hand car) I've never had any issues and have had 30,000km per year allowance. (if you do go over that it is around 10c per km, depending on the car company). My current contract is 1% interest. I've never gone for one more that 3%. I received a quote from peugeot at 5% and that was about 10 a month cheaper than HP, in that case imo you may as well go with HP.

    My first 2 i seen through to the end of the 36 months, traded one in and handed the other back (that was our 2nd car at the time and we didnt need 2). Had around 7k equity in them both, was given a cheque for 7k when i handed the 1st one back.

    The 3rd one we traded in early after 24months and got our current one with.
    Currently paying 280 a month with 30,000km a year and a gmfv of 10k. Put down a deposit of 8k. Car is a Mazda CX3 worth 28k

    PCP is perfectly fine, provided you understand it. People tend to forget about the final payment. The car is not yours until you pay that off.

    Our current car has a gmfv of 10k but an estimated value of 19k after the 36months. So we should have around 9k equity in the car come end of contract.

    There is also the option to pay off that final payment on HP. i.e. after 36months keep the car and take that final 10k out on HP. I've never done that, but I have been offered it every time.

    Edit: As a note on HP, there is a legal option that once you are atleast half way through your HP contact you have the right to hand the car back and walk away without any further payments, and this will not affect your credit rating.
    I don't think this is an option with PCP (but i am not sure).


  • Registered Users Posts: 3,538 ✭✭✭carsfan2


    You can do voluntary termination on a pcp too as it’s just a different type of hp.
    Once you have paid 50% of the amount borrowed you can return the car.


  • Banned (with Prison Access) Posts: 150 ✭✭rovertom


    carsfan2 wrote: »
    You can do voluntary termination on a pcp too as it’s just a different type of hp.
    Once you have paid 50% of the amount borrowed you can return the car.

    Yes but the way pcp payments are structured, you will likely be near 36 months anyway by the time you have paid half the borrowings.


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  • Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    rovertom wrote: »
    Yes but the way pcp payments are structured, you will likely be near 36 months anyway by the time you have paid half the borrowings.

    Guess it depends on your deposit.

    In my case it is 22 months. 28k car > 14k half way point.
    8k deposit leaves 6k. 280 a month is just under 22 months.


  • Banned (with Prison Access) Posts: 150 ✭✭rovertom


    Is it half the finance amount or half the car value though? I don't know to be honest.


  • Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    rovertom wrote: »
    Is it half the finance amount or half the car value though? I don't know to be honest.

    Half the total amount payable. I'm just have a good rate on my pcp but it is half the total amount payable. (Atleast that's what I have been told in regards to hp)


  • Banned (with Prison Access) Posts: 150 ✭✭rovertom


    OSI wrote: »
    It's half the purchase price of the car. e.g. if you buy a car with a price of 30k and give a 5k deposit, you can hand it back after making 10k in repayments.

    Plus interest portion surely?


  • Registered Users Posts: 9 Eirelh


    My PCP deal ends in Jan 2019. Should have around €5k equity on a current 152 Audi A3.

    Final balloon payment is just over €13k. Considering buying the car outright that doing another PCP agreement again. One side of me is saying buy the car which has been great since I've had it. A small part of me is saying trade in as I get a work car allowance every month and mileage.

    Audi have offered me a 191 A3 S-Line Saloon for a trade in plus €5k. Monthly repayments would be €300. APR 1.9% GMFV €14,500

    Decisions, decisions...


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  • Banned (with Prison Access) Posts: 150 ✭✭rovertom


    Eirelh wrote: »
    My PCP deal ends in Jan 2019. Should have around €5k equity on a current 152 Audi A3.

    Final balloon payment is just over €13k. Considering buying the car outright that doing another PCP agreement again. One side of me is saying buy the car which has been great since I've had it. A small part of me is saying trade in as I get a work car allowance every month and mileage.

    Audi have offered me a 191 A3 S-Line Saloon for a trade in plus €5k. Monthly repayments would be €300.

    Decisions, decisions...

    Sounds good. So if you didn't come up with that extra 5k, payment, it would be around 430 or so monthly which is not crazy either for rolling over with no extra cash deposit going in.


  • Registered Users Posts: 920 ✭✭✭Ron Burgundy II


    Got the following offer from VW,
    Final Ballon Payment €12,000
    Trade in Value = €17,500
    Equity €5,500


    On a 191 1.5TSi golf with no deposit gives me a monthly of €380. I'm currently €300 per month. If I put in €2,500 I can get the monthly down to €290.


  • Registered Users Posts: 1,887 ✭✭✭hooch-85


    Got the following offer from VW,
    Final Ballon Payment €12,000
    Trade in Value = €17,500
    Equity €5,500


    On a 191 1.5TSi golf with no deposit gives me a monthly of €380. I'm currently €300 per month. If I put in €2,500 I can get the monthly down to €290.

    Not bad at all, i'd prob not bother putting any cash in, an extra €90 a month won't be massive. Interested to see what those new 1.5 TSi Golf's are like. Is that a very low rate PCP?


  • Registered Users Posts: 920 ✭✭✭Ron Burgundy II


    0% APR.

    I'm not sure how to progress, looking at getting a mortgage in the next 12 months, so need to look into any potential pitfalls of rolling into a new PCP contract.


  • Registered Users Posts: 3,245 ✭✭✭nc6000


    Kersh wrote: »
    We are coming to the end of our PCP on a Peugeot 2008 1.6HDi.

    Ah, 2008 being the name of the Peugeot model. I was thinking for a moment it was a very long PCP term. :o


  • Registered Users Posts: 3,027 ✭✭✭Lantus


    nc6000 wrote:
    Ah, 2008 being the name of the Peugeot model. I was thinking for a moment it was a very long PCP term.


    Very low monthly payments but not much equity at the end....


  • Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    0% APR.

    I'm not sure how to progress, looking at getting a mortgage in the next 12 months, so need to look into any potential pitfalls of rolling into a new PCP contract.

    Took out a new PCP in july, applied and got my mortgage in August. Closed on the house last week.

    I also have a personal loan out.

    Provided you can afford the debt you owe then a new pcp will not be an issue for getting a mortgage


  • Registered Users Posts: 7,541 ✭✭✭irlrobins


    6 months until the end of my first PCP, so thought I'd see what dealer was offering.

    Trading in: Skoda Octavia 1.2 TSI Style with a few extras (heated seats, front assist, sunset glass). 32K kms on the clock, car in good condition inside and out. Settlement based on Feb sale date would be ~€10K (Ballon payment plus last 2 months).

    Dealer (not the same one I bought from previously) offering me €17K for it, made up of €14K for car, €2K discount off new model and €1K contribution from VW Bank.

    Potential new car: Superb 15 TSI Ambition, again with a couple of extras. €34,230.

    So basically with €7K equity and 0% APR, monthly payments would be a little over €400 a month. Bit of a jump on the €220 I'm paying on Octavia.

    Heart wants the bigger car, the head thinks sticking with Octavia is better financial sense, even if the APR is 2.9% on it.


  • Registered Users Posts: 6,235 ✭✭✭DaveyDave


    Has anyone traded after 2 years and not done big mileage? Haven't seen any examples of trading early that were under 20k/year. Wonder if there would be much extra equity trading in a year early?


  • Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    0% APR.

    I'm not sure how to progress, looking at getting a mortgage in the next 12 months, so need to look into any potential pitfalls of rolling into a new PCP contract.

    Not an issue provided you can afford the repayments etc.
    I've just got a mortgage, after taking out a new PCP in july (actually have a personal loan from march too).

    It won't affect your mortgage application provided you can afford all your debt and cover all your bills etc.


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  • Registered Users Posts: 3,642 ✭✭✭Wildly Boaring


    Not an issue provided you can afford the repayments etc.
    I've just got a mortgage, after taking out a new PCP in july (actually have a personal loan from march too).

    It won't affect your mortgage application provided you can afford all your debt and cover all your bills etc.


    But i think it can affect mortgage approval.

    When the bank work out your max allowable they then stress test you.
    Basically they have round figures of what a family or 2 or 3 or 4 should have as monthly outgoings. They subtract this and any loan repayments from income to make sure you could pay mortgage in the event of an interest rate rise.

    I assume PCP would come under loan repayments this possibly reducing the max mortgage you can get.


  • Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    But i think it can affect mortgage approval.

    When the bank work out your max allowable they then stress test you.
    Basically they have round figures of what a family or 2 or 3 or 4 should have as monthly outgoings. They subtract this and any loan repayments from income to make sure you could pay mortgage in the event of an interest rate rise.

    I assume PCP would come under loan repayments this possibly reducing the max mortgage you can get.

    Yup that's what I mean when I said 'provided you can afford it'

    The bank will stress test your income, and if taking out a new pcp drastically reduces your disposable income then it will have an adverse affect on your application.

    I can't remember the exact figure but I think provided your outgoings are less than 60% of your income, then you will be fine. (someone can correct me on that percentage)


  • Registered Users Posts: 33,409 ✭✭✭✭NIMAN


    I have never considered PCP as I had heard so many scare stories about it, but if you have a big deposit (I'd own the 2016 car I'd be using as trade-in) and you could get 0% apr PCP, would it be something worth considering?


  • Registered Users Posts: 1,887 ✭✭✭hooch-85


    0% finance is pretty much unbeatable really so yes definitely worth considering if you are in the market for a brand new car


  • Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    NIMAN wrote: »
    I have never considered PCP as I had heard so many scare stories about it, but if you have a big deposit (I'd own the 2016 car I'd be using as trade-in) and you could get 0% apr PCP, would it be something worth considering?

    The 0% apr offers are not usually tied to a big deposit, but rather are just specific offers from the car company.
    A good size deposit will reduce your monthly payments however.
    Best thing to do is to shop around and don't be afraid to get plenty of quotes of multiple dealers. (I ended up going with a Mazda dealer in the opposite side of the country as he was offering a much better deal than the dealers closer to me, even big brand dealers can have different quotes so shop around).

    Just remember, there is nothing wrong with PCP, just be aware of how it works in terms of, mileage allowance and future value etc. The balloon payment is not an issue for any pcp provided you follow the agreement, but for some reason people like to forget about the balloon payment and act as if they do not owe it.

    That being said, provided you don't go way way over on your mileage, you should finish your PCP with a decent amount of equity to trade in for another car (or to take as cash if you hand the car back).

    If you choose to keep the car at the end of the pcp but can't afford the balloon payment, you can also take that payment out as HP to finish it off.
    (means you will take longer to pay off the car, but is easier if you have cash flow issues)


  • Registered Users Posts: 51,211 ✭✭✭✭bazz26


    NIMAN wrote: »
    I have never considered PCP as I had heard so many scare stories about it, but if you have a big deposit (I'd own the 2016 car I'd be using as trade-in) and you could get 0% apr PCP, would it be something worth considering?

    The maximum deposit you can have with PCP is 30% of the price of the new car. What you could do is maybe agree a trade in price of your Golf with the dealer and use a percentage of that amount as a deposit and take the rest back in cash. I think the magic number for the deposit is between 6% and 10% ideally.

    It's not advisable to put a high deposit into a PCP deal as it means if you decide to go PCP again in 2 or 3 years time then in order to retain similar monthly payments as before, you will need to stump up a similar deposit again otherwise your monthly repayments increase dramatically.


  • Registered Users Posts: 28,939 ✭✭✭✭AndrewJRenko


    hooch-85 wrote: »
    0% finance is pretty much unbeatable really so yes definitely worth considering if you are in the market for a brand new car


    Is the 0% real? Money costs, one way or other. So are they just building their margin for the money into the sale price of the car?


  • Registered Users Posts: 22,929 ✭✭✭✭ShadowHearth


    Is the 0% real? Money costs, one way or other. So are they just building their margin for the money into the sale price of the car?

    One of the benefits they have - their own bank. So they still sell you a car, they just dont profit on finance. No more middle man.
    I personally think its great way of doing it, as a lot of cars become a lot more expensive when you actually do the maths with finance included.
    I am pretty sure tin foil hat people will come over and scream at me for being stupid, as manufacturers just load up the price or dont give steep discounts if you go 0%.
    I personally prefer having 0% apr and pay what the price is, instead of doing the whole dance of price fighting.
    If I can, I will find a car with 0% apr again, when time for change comes.


  • Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


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  • Registered Users Posts: 28,939 ✭✭✭✭AndrewJRenko


    This post has been deleted.

    They can finance the money a lot cheaper than an individual can. As they are a German company they can tap into very cheap interest rates in Germany.

    [/quote]
    German commercial borrowing rates aren't 0%. And even if they source the money at low rates wholesale, they have additional retail costs of providing and managing the loan, and covering the percentage of bad debts.

    No business gets money at 0%


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