Hyundai Tuscon pcp

pete6296

Hi.
We have a 161 tuscon executive with pcp. Hyundai say if I change now repayments will be same. Would I better to wait another year and repayments may even be better. Not to sure what to Do, just put 4 new tyres on and taxed it. Opinions appreciated

colm_mcm

You don’t need to put up any money?

pete6296

colm_mcm wrote: »

You don’t need to put up any money?

No money. Same repayments if I change now and it's even a step up to executive se, 1k euro more expensive

Wildly Boaring

If they want no money (another deposit) take their hand as well.

colm_mcm

Is the GMFV different?

pete6296

scanlone wrote: »

If they want no money (another deposit) take their hand as well.

Deposit will be 161 tuscon I have

pete6296

colm_mcm wrote: »

Is the GMFV different?

Will need to double check that. Finance is now 3.9 in comparison to the 5.9 I am on now

jimmycrackcorm

If you've no exit pcp strategy then by all means just change.

Lantus

pete6296 wrote:

Hi. We have a 161 tuscon executive with pcp. Hyundai say if I change now repayments will be same. Would I better to wait another year and repayments may even be better. Not to sure what to Do, just put 4 new tyres on and taxed it. Opinions appreciated

What was your deposit as a percentage? Note that interest rate could even make this beneficial for dealer over 3 years.

Still sounds good on face of it.

pete6296

jimmycrackcorm wrote: »

If you've no exit pcp strategy then by all means just change.

Thanks. Main query here is should I wait another year.
Thanks for all comments

dubrov

It will cost you much more in the long run to change now.

You're car is 2 years old and will probably depreciate about 4k this year. If you get a new one it will depreciate by more than double that.

Of course you would be in a new car versus a two year old one which has a value. It isn't free though.

It all depends if you think the extra cost is worth it

Wildly Boaring

pete6296 wrote: »

Thanks. Main query here is should I wait another year.
Thanks for all comments

I can't see the value in waiting if the plan is to go again.

Best case value exceeds GMFV by enough to form deposit and get you on the same monthly repayments. You were happy st 5.9%

Every other case involves you putting in money to form the new deposit.



As advised about ensure the proposed GMFV makes sense.

pete6296

scanlone wrote: »

I can't see the value in waiting if the plan is to go again.

Best case value exceeds GMFV by enough to form deposit and get you on the same monthly repayments. You were happy st 5.9%

Every other case involves you putting in money to form the new deposit.



As advised about ensure the proposed GMFV makes sense.

Thanks.
I am not very good when it comes to pcp. I thought if I wait another year will have more of car paid off so in a better position but this may not be true for pcp. Correct me if I'm wrong.

dubrov

pete6296 wrote:

Thanks. I am not very good when it comes to pcp. I thought if I wait another year will have more of car paid off so in a better position but this may not be true for pcp. Correct me if I'm wrong.

You are correct in everything you say. A new car is always going to cost you more than a 2 year old car.

Wildly Boaring

pete6296 wrote: »

Thanks.
I am not very good when it comes to pcp. I thought if I wait another year will have more of car paid off so in a better position but this may not be true for pcp. Correct me if I'm wrong.

If you're going to go for a new car again next year the dealer will make an assessment of what your car is worth over the GMFV.
This could be zero.

Right now the dealer reckons your car minus the GMFV and what you've left to pay (and the interest rate differential) equal the deposit you originally put down.

Provided he's not altering the GMFV in the new deal.

Was the plan always to go again?

pete6296

scanlone wrote: »

If you're going to go for a new car again next year the dealer will make an assessment of what your car is worth over the GMFV.
This could be zero.

Right now the dealer reckons your car minus the GMFV and what you've left to pay (and the interest rate differential) equal the deposit you originally put down.

Provided he's not altering the GMFV in the new deal.

Was the plan always to go again?

Thanks a mill. So it sounds better to change now. Plan is always to change to a new tuscon. 3 years in my head but sounds like I wud be better to do it now from what your saying?
Thanks

dubrov

All he is saying is that they will reassess next year.

Basically the dealer looks at how much the car is worth to hi to buy (GFMV is the lowest they can use) and how much is left on the loan.
The difference is your equity that can be used as a deposit on your next pcp deal.

Your car will be worth less a year from now but I'd be almost certain you will have paid off much more on the loan.

Lantus

pete6296 wrote:

Thanks a mill. So it sounds better to change now. Plan is always to change to a new tuscon. 3 years in my head but sounds like I wud be better to do it now from what your saying? Thanks

You haven't provided a single figure on your original deal or the new proposed deal so while it sounds 'ok' no one can help form any real idea beyond a very rough concept.

Car dealers don't generally give cars away or make a deliberate loss.....

pete6296

Lantus wrote: »

You haven't provided a single figure on your original deal or the new proposed deal so while it sounds 'ok' no one can help form any real idea beyond a very rough concept.

Car dealers don't generally give cars away or make a deliberate loss.....

Please see figures attached. Paid 3k deposit in March 2016. New car is executive se which is 1k more expensive than executive I'm told.
Thanks everyone

dubrov

I have had a rough stab at the rough numbers
Year, Car Value at end of year, Loan paid after interest in year, Remaining Loan, Equity
0 30000 3000 27000 3000
0-1 23000 5023 21977 1023
1-2 19000 5327 16650 2350
2-3 16000 5650 11000 5000

I have allowed 1,500 dealer profit in the current car value in years 1,2,3.
You may be able to put a better number if you check out current sale prices.

On the face of it you would be putting down a deposit of 2,350 in a new deal.
So it looks like a better deal than your current one as long as the car cost and final payment are the same.

Holding on another year will save you about 2,650 but you will be driving a 2 year old car versus a new one.

Of course, I may have ballsed up the number but others may be able to correct that.

pete6296

dubrov wrote: »

I have had a rough stab at the rough numbers
Year, Car Value at end of year, Loan paid after interest in year, Remaining Loan, Equity
0 30000 3000 27000 3000
0-1 23000 5023 21977 1023
1-2 19000 5327 16650 2350
2-3 16000 5650 11000 5000

I have allowed 1,500 dealer profit in the current car value in years 1,2,3.
You may be able to put a better number if you check out current sale prices.

On the face of it you would be putting down a deposit of 2,350 in a new deal.
So it looks like a better deal than your current one as long as the car cost and final payment are the same.

Holding on another year will save you about 2,650 but you will be driving a 2 year old car versus a new one.

Of course, I may have ballsed up the number but others may be able to correct that.

Thanks so much.
Current tuscon will be 2 years in March 2018.
Offered 23k today in Jan 2018.

Lantus

Ok. You will of made 11440 in payments over 2 years. The amount outstanding is the cost 26900 + 4242 - 11440=19702.

Your offered 23k. A difference of 3300.

The interest is lower on the new car but the cost is higher. Let's say Interest is 2800 at 2/3.

The minimum deposit needs to be 3k again so very little, 700, for the dealer.

What's the new gmfv?

On the whole seems like a reasonable deal, you get equity and lower interest means payments about the same?

If demand for tuscon is high could make sense for dealer to do this.

dubrov

Lantus wrote:

Ok. You will of made 11440 in payments over 2 years. The amount outstanding is the cost 26900 + 4242 - 11440=19702.

Surely not all the interest would be charged if the deal was ended a year early.

23k is a very good offer for a car that would've been 30k new 2 years before

Lantus

dubrov wrote:

Surely not all the interest would be charged if the deal was ended a year early.

The finance is paid regardless. Just because the customer opts out early doesn't mean the lender waived the interest. The dealer pays this off in full. They were due to pay 36 payments at 475 and that is still the case. The dealer won't renegotiate the contract as far as I am aware?

dubrov

Ouch. So if the Op rolled the deal, they would effectively be double paying interest in that first year.

Looks to me like there is 3300 equity now.
If the OP waits another year, then that extra interest would be saved (~1,200) plus depreciation would be lower.

The question is why is the dealer offering 23k for a car that would struggle to get 20k in the private market?
That turns the deal from being standard into an attractive one.

pete6296

dubrov wrote: »

Ouch. So if the Op rolled the deal, they would effectively be double paying interest in that first year.

Looks to me like there is 3300 equity now.
If the OP waits another year, then that extra interest would be saved (~1,200) plus depreciation would be lower.

The question is why is the dealer offering 23k for a car that would struggle to get 20k in the private market?
That turns the deal from being standard into an attractive one.

I agree. 23k is a good price so very tempted to be honest

Lantus

dubrov wrote:

The question is why is the dealer offering 23k for a car that would struggle to get 20k in the private market? That turns the deal from being standard into an attractive one.

Agreed. We really need the new gmfv figure op to get the full picture.

pete6296

Lantus wrote: »

Agreed. We really need the new gmfv figure op to get the full picture.

Tucson Exec se €490.68 per month gmfv €14399.25

 

Tucson Premium €508.80 per month gmfv €14847.80

 

Casati

Lantus wrote: »

The finance is paid regardless. Just because the customer opts out early doesn't mean the lender waived the interest. The dealer pays this off in full. They were due to pay 36 payments at 475 and that is still the case. The dealer won't renegotiate the contract as far as I am aware?

That’s incorrect. They can’t charge the third years interest legally

For the OP’s perspective your moving into a 1000 euro better car for the same payments and no extra deposit, that’s an excellent deal!

dubrov

Casati wrote:

For the OP’s perspective your moving into a 1000 euro better car for the same payments and no extra deposit, that’s an excellent deal!

There is still a cost though. There would be two more years of payments

pete6296

dubrov wrote: »

There is still a cost though. There would be two more years of payments

There would be 3 years as pcp over 36 months

Lantus

Casati wrote:

That’s incorrect. They can’t charge the third years interest legally

They don't charge the customer, but they must settle the outstanding finance which would include any interest due.

Lantus

pete6296 wrote:

Tucson Exec se €490.68 per month gmfv €14399.25

So based on the second being 1k more as per your previous post the gmfv ratios remain the same. You pay off 53.6pc until you hit 3 years.

Could be a little higher and some marques have readjusted to the 55 to 60 range to protect against equity erosion through 2nd hand values.

However, your affordability is high based on your monthlys so I'm not concerned. At some point you will want to exit. I'd try to save a few euros over the next 3 years to give some options when the time comes.

Looks like a good deal! I would probably go for it.

Penalty

Casati wrote: »

That’s incorrect. They can’t charge the third years interest legally

l!

Yes they can PCP is at a fixed interest rate and like all fixed interest rate loans the lender pays the full interest for the term even if they settle early

dubrov

Penalty wrote: »

Yes they can PCP is at a fixed interest rate and like all fixed interest rate loans the lender pays the full interest for the term even if they settle early

That is not true on mortgages. There may be a fee to get out of a fixed rate but it is nowhere near the full interest cost.

Lantus

Penalty wrote:

Yes they can PCP is at a fixed interest rate and like all fixed interest rate loans the lender pays the full interest for the term even if they settle early

They are not settling early though.

The dealer pays off the outstanding finance. If there are 36 payments at 500 then after 2 years the dealer settles 500 X 12 plus the gmfv. Those monthly payments could include interest.

Penalty

Lantus wrote: »

They are not settling early though.

The dealer pays off the outstanding finance. If there are 36 payments at 500 then after 2 years the dealer settles 500 X 12 plus the gmfv. Those monthly payments could include interest.

If they are changing and starting a new PCP agreement then they are settling early.



Just because the dealer takes care off all the financial payments does not mean they are paying the PCP off. They are paying it off on behalf of the client.

Your example of paying the 12 * 500 to settle in addition to the GMFV is correct. But in that 500 payment is included the interest cost for year 3. Hence they are paying the interest for the 3rd year. Just because it’s not specified does not mean it’s included in the total numbers that are quoted and will be included in the amount outstanding.

I’m not commenting on the overall deal which may be good but the fact is they will be paying interest for the final year of the original agreement plus interest for the first year of the new PCP agreement. That is a fact. And the interest for the 3rd year is included in the new PCP agreement and effectively being spread over the next 3 years.

jimmycrackcorm

dubrov wrote:

Holding on another year will save you about 2,650 but you will be driving a 2 year old car versus a new one.

When you have into account that it is also a higher spec model with 1k more then 1650 is quite good to go up two years.

dubrov wrote:

The question is why is the dealer offering 23k for a car that would struggle to get 20k in the private market? That turns the deal from being standard into an attractive one.

The dealer will get a nice first quarter manufacturer rebate.

Lantus

Penalty wrote:

I’m not commenting on the overall deal which may be good but the fact is they will be paying interest for the final year of the original agreement plus interest for the first year of the new PCP agreement. That is a fact. And the interest for the 3rd year is included in the new PCP agreement and effectively being spread over the next 3 years.

That's what I meant, assumed it was obvious that interest was included in that 500 example.

The above comment doesn't make complete sense. The dealer settles the outstanding money owed, not the customer. However it does affect the equity moving into the next deal as its value vs finance.

So customer hands in keys to old car and gets a letter saying finance is cleared.

They enter into new deal as per attached pic with a new or no interest arrangement which is based on 3 years as per original deal.

The only link between the old and new is the equity carried over forming the new deposit.

Doodah7

Ultimately this probably works out as a win/win for the customer and dealer. The customer, who was likely to change anyway next year, gets a higher spec, new car a year early. If I understand correctly, it is irrelevant to him on the interest payments for the third year as the dealer will have to deal with this. In essence the customer has the clock reset to a new three years, at a lower interest rate in a new, higher spec car. The only thing to check is the amount of the final payment (I refuse to use the term GMFV). What is the new final payment versus the current one? You will then be able to calculate and compare the total cost of ownership between the two deals.

Of course the dealer wins by notching up a sale and that is another one towards the various bonuses that accrue by reaching their targets. It seems VERY important to Hyundai to be able to brag that the Tuscon is the top selling car and of course it is. Success breeds success and being the top selling car must be itself attractive to many people who must figure 'if it's No. 1 then it must be good' type of mentality.

ShamoBuc

It does seem like a good deal, it also highlights the complexities of PCP and the very real need to understand all the sums involved.

pete6296

ShamoBuc wrote: »

It does seem like a good deal, it also highlights the complexities of PCP and the very real need to understand all the sums involved.

Thanks. Pcp can be so complicated. We just taxed current tuscon and put 4 new tyres on but worried if I wait another year there will be a huge supply of tuscons on forecourts.

Lantus

ShamoBuc wrote:

It does seem like a good deal, it also highlights the complexities of PCP and the very real need to understand all the sums involved.

I hope this thread has shown that if you do look at all the numbers it's not that complex.

Doodah7

Lantus wrote: »

I hope this thread has shown that if you do look at all the numbers it's not that complex.

The thread also goes to show that there are many people, OP included it seems, that enter into these types of contract without having a bull's notion how they work. I find that bizarre given the sums of money involved.

pete6296

Lantus wrote: »

I hope this thread has shown that if you do look at all the numbers it's not that complex.

I have learnt alot from this thread and thanks everyone

pete6296

Doodah7 wrote: »

The thread also goes to show that there are many people, OP included it seems, that enter into these types of contract without having a bull's notion how they work. I find that bizarre given the sums of money involved.

To be honest, pcp on the face of it makes sense but as pointed out certain aspects make be a little complicated more from the perspective of what dealer is offering