PCP - what are the pitfalls?

Andy From Sligo

Just running past people who are in the know about these things.

Just been on Suzuki website - they are doing a small 181 car now from
9,995.00eur (that will wipe the smile off Dacia now wont it)

They have about PCP, which I am not too familiar with. They say after 3 years one of the options is (and I quote off their website):

(2) Simply return your car to your dealer and walk away

what are the caveats to that? (so that it doesn't sound too good to be true)

I am presuming you have had to have it regularly serviced by Suzuki , anything else they would require, or any thing they could turn it down when it comes to 3 years up and they wont honor it?

MarkN

Please do a search on PCP, there's an entire thread within two pages of this. It's been covered in huge detail

Andy From Sligo

MarkN wrote: »

Please do a search on PCP, there's an entire thread within two pages of this. It's been covered in huge detail

thank you will do

Lantus

That option is the doomsday final option when you literally have no choice or will never drive again.

You lose any deposit or equity you invested and can be charged mileage penalties as per the contract. If your going to be doing a reasonable commute this may well affect you.

GingerLily

I don't think you should get PCP, from reading your other threads, you really can't afford it.

wpd

https://www.irishtimes.com/life-and-style/motors/suzuki-brake-failure-recall-raises-cost-cutting-questions-1.2098153

Andy From Sligo

wpd wrote: »

https://www.irishtimes.com/life-and-style/motors/suzuki-brake-failure-recall-raises-cost-cutting-questions-1.2098153

blimey, thats not good news the brakes failing like that on the Suzuki Celerio

Andy From Sligo

GingerLily wrote: »

I don't think you should get PCP, from reading your other threads, you really can't afford it.

a guy can dream - I might look at a cake in a shop window ... doesn't mean I am going to buy it

just was wondering what people thought of PCP and anything to watch out for

Shadowthrone

Andy From Sligo wrote: »

Just running past people who are in the know about these things.

Just been on Suzuki website - they are doing a small 181 car now from
9,995.00eur (that will wipe the smile off Dacia now wont it)

They have about PCP, which I am not too familiar with. They say after 3 years one of the options is (and I quote off their website):

(2) Simply return your car to your dealer and walk away

what are the caveats to that? (so that it doesn't sound too good to be true)

I am presuming you have had to have it regularly serviced by Suzuki , anything else they would require, or any thing they could turn it down when it comes to 3 years up and they wont honor it?

It is quite straight forward to be honest. the caveats being:

if you want to hand the car back and walk away you must:

Make sure you have stuck to the agreed mileage limit. You will pay per km you are over this limit. (around 8cent per km. this will be on the contract).

The car must be in good condition, dents scratches etc will devalue the car so you may have to pay the difference in value.

you do not need to service it with Suzuki but you do need to service it. It just easier to service it with the same garage, then they can't complain.

provided you meet those basics you can hand the car back and walk away.

Now, the whole point is the guaranteed future value. This is the balloon payment at the end. This is what the dealer guarantees the car to be worth should you stick to the terms on the contract.

This is how they work out your payments. deposit and gfv then your monthly payments make up the difference. if you affect the gfv then you pay this difference that you affected before being able to walk away.

That said it can also work in your favour, where the car is actually worth more than the gfv. this is credit in your favour which you can have back to keep, or put to a new car, or whatever you want.

Between my wife and I we have had 4 PCP's on our 5th now. 2 of those have the car has been worth more than the gfv when we went back for trade in.

Andy From Sligo

Shadowthrone wrote: »

It is quite straight forward to be honest. the caveats being:

if you want to hand the car back and walk away you must:

Make sure you have stuck to the agreed mileage limit. You will pay per km you are over this limit. (around 8cent per km. this will be on the contract).

The car must be in good condition, dents scratches etc will devalue the car so you may have to pay the difference in value.

you do not need to service it with Suzuki but you do need to service it. It just easier to service it with the same garage, then they can't complain.

provided you meet those basics you can hand the car back and walk away.

Now, the whole point is the guaranteed future value. This is the balloon payment at the end. This is what the dealer guarantees the car to be worth should you stick to the terms on the contract.

This is how they work out your payments. deposit and gfv then your monthly payments make up the difference. if you affect the gfv then you pay this difference that you affected before being able to walk away.

That said it can also work in your favour, where the car is actually worth more than the gfv. this is credit in your favour which you can have back to keep, or put to a new car, or whatever you want.

Between my wife and I we have had 4 PCP's on our 5th now. 2 of those have the car has been worth more than the gfv when we went back for trade in.

many thanks, thats the kind of details I were looking at rather than going through loads of posts to find the answer.

are there any leniency/leeway for scuffs/scratches/dents when handing it back in because no matter how well you look after the car there could be always someone else to scrape it or scratch it and it wouldnt be your fault?

it sounds very much like when you rent a car from a rental firm and they check before the car goes out for dents and scratches and then check again when you leave it back in.

Snakeweasel

I am on my first PCP agreement. It can seem confusing and I have actually started a thread on here that got very heated debating it!

The way I look at it now is, its essentially a car loan with lower monthly repayments throughout the term than a hire purchase agreement, along with balloon payment at the end.

For me it meant I bought a car which when looking at the figures on HP I would have ran a mile, but on PCP the monthly payments were very manageable. However, at the end of my 3 year term, I now plan on keeping my car. This means either spending the majority of my savings to buy it outright, or get another loan on a car I have already been paying off for 3 years!

I say that if you need and want the car, go for HP if you can afford the monthly payments. If you do go for PCP always remember the amount you will still owe at the end whilst the salesman is waving the small monthly payments around.

Shadowthrone

Andy From Sligo wrote: »

many thanks, thats the kind of details I were looking at rather than going through loads of posts to find the answer.

are there any leniency/leeway for scuffs/scratches/dents when handing it back in because no matter how well you look after the car there could be always someone else to scrape it or scratch it and it wouldnt be your fault?

it sounds very much like when you rent a car from a rental firm and they check before the car goes out for dents and scratches and then check again when you leave it back in.

Unfortunately that is at the discretion of the dealer. it could go either way. The cars i had, had very minor scratches and they were not an issue.
But the dealer can decide on that. If he is a decent person he will be fine with it. If not he may try to screw you.

You tend to be better off with bigger chain dealers as they have a bit less personally invested. Small traders need to make money where they can.
But that's not to say all small dealers are like that either.

Honest answer is I don't know, it depends on the dealer and probably what kind of mood they are in

wpd

you need to be careful about km on pcp agreement as there are penalties if you exceed

you are committed to getting services done on time in main dealer

as shadowthrone as said you are at dealers mercy on condition of car on return of car

you really need to decide on stategy after 3 years before you commit to first pcp , are you going to pay out gmfv or get into another car
bear in mind if going into 2nd pcp you are probably going to get best deal not changing brand

i would stay with mainstream/popular brands with large dealers

Personally i would do a pcp but would go and get 2 year old car on loan perhaps in the uk

Snakeweasel

wpd wrote: »

you really need to decide on stategy after 3 years before you commit to first pcp , are you going to pay out gmfv or get into another car

I know peoples situations can change. But I think this is such an important factor that is often overlooked. People hear they have options at the end of the term, so often defer making a decision (I know I did!)

anewme

In order to get PCP or a loan you have the have a full clean credit record.

They are very strict.

Did you not have another post where you were being chased by debt collectors.?

If so, you’d probably not pass. Send off for your credit check record with ICB before you apply.