Advice please

Paulbeth

Sorry to hijack the thread with my query - didn't want to start a new thread for it. I'm thinking of buying a new car and taking advantage of a scrappage deal. I will finance it through PCP or HP. The dealer has given me info on the car and the repayments and also asked for my bank name and address and for my bank account number. Will he be checking the state if my bank finances with my bank? Or will he be confirming my income? Or is there some other reason why he needed my bank details. Thanks.

Avatar MIA

Paulbeth wrote: »

Sorry to hijack the thread with my query - didn't want to start a new thread for it. I'm thinking of buying a new car and taking advantage of a scrappage deal. I will finance it through PCP or HP. The dealer has given me info on the car and the repayments and also asked for my bank name and address and for my bank account number. Will he be checking the state if my bank finances with my bank? Or will he be confirming my income? Or is there some other reason why he needed my bank details. Thanks.

He shouldn't be checking the state of your finances with the bank if buying over PCP or HP, but should be using Irish Credit Bureau. He wouldn't need your bank details for that just your name and address.

Paulbeth

Avatar MIA wrote: »

He shouldn't be checking the state of your finances with the bank if buying over PCP or HP, but should be using Irish Credit Bureau. He wouldn't need your bank details for that just your name and address.

Thanks. I thought that too. I'll be in touch with him again tomorrow, so I can find out. Do car dealers providing PCP and HP options automatically do a credit check? He didn't mention it.

bazz26

I'd say definitely for regular HP finance or car loan but PCP is not governed the same way so the criteria may not be the same.

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FUTY2211

Prisoner 6753 wrote: »

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I think if you do your research, read the terms and understand exactly what you're getting yourself in to then it can be a good thing - depends on an individuals circumstances.

Paulbeth

FUTY2211 wrote: »

I think if you do your research, read the terms and understand exactly what you're getting yourself in to then it can be a good thing - depends on an individuals circumstances.

Yes. I've read some of the pros and cons around PCP. I've taken home as much info as I can, so that I won't get into something that could end up being unmanageable from a financial point of view.

FUTY2211

Paulbeth wrote: »

Yes. I've read some of the pros and cons around PCP. I've taken home as much info as I can, so that I won't get into something that could end up being unmanageable from a financial point of view.

I think the key thing to look at IMO for PCP is the GFMV or "Final Payment" amount they're offering....I've looked at 3 year old cars on Cars Ireland on some PCP offers and it's quite clear that you'll have little to no equity from them at the end of the deal and will find yourself either having to come up with another lumpsum in 3 years time or refinance the remaining payment.

biko

Moved out from someone else's thread.

Paulbeth

Sorry for gate crashing!

Paulbeth

FUTY2211 wrote: »

I think the key thing to look at IMO for PCP is the GFMV or "Final Payment" amount they're offering....I've looked at 3 year old cars on Cars Ireland on some PCP offers and it's quite clear that you'll have little to no equity from them at the end of the deal and will find yourself either having to come up with another lumpsum in 3 years time.

The dealer did mention the 'balloon' payment at the end of the contract and he said 'balloon' a few times. I didn't like the sound of that. He was inclined to steer me away from the PCP, in fact, and towards HP. Lower repayments with PCP, though, and I don't do big mileage or need to carry a football team in the car, so I thought it might work for me. I don't want to pay any balloon amounts in the end, so was thinking I'd just start another PCP. Have to think it through.

joebloggs32

Paulbeth wrote: »

The dealer did mention the 'balloon' payment at the end of the contract and he said 'balloon' a few times. I didn't like the sound of that. He was inclined to steer me away from the PCP, in fact, and towards HP. Lower repayments with PCP, though, and I don't do big mileage or need to carry a football team in the car, so I thought it might work for me. I don't want to pay any balloon amounts in the end, so was thinking I'd just start another PCP. Have to think it through.

I'm just nearing the end of my Pcp.
I can't understand why some can't just look at the numbers to see what they are singing up to. Seems simple to me.
I put in max deposit, had a low monthly and final payment is 8.5k on a fluency.
I knew straight away I would have a lot less towards my next deposit if I was going to trade up and in fact worst case scenario I may have little or nothing.
Since I bought brexit has reared its head so I know the second hand market has changed and this has probably impacted on the potential equity that would have been in my car.
Who is to know in 3 years time again how the world will have changed, especially as the EV revolution appears to be starting.

One thing I did do to protect myself was to save the GMFV. I am actually going to the dealer tomorrow to talk about trading in my 152 for a 182. Having that money put aside gives me options. If I feel I am being offered a poor deal I can just settle up and keep the car.
Really tempted by EV but might wait to 2021 to do that switch when batteries and charging infrastructure should be better

Paulbeth

That's where the PCP would be difficult for me - I'm not in a position to save enough for the large end of contract payment. Other than that, it's not a bad option if it suits your driving habits (low mileage, servicing at the approved garage, etc. - assuming these are part of the Ts&Cs). Anyway, I've gone with the HP option.

Thanks for all the advice.

elbyrneo

Paulbeth wrote: »

That's where the PCP would be difficult for me - I'm not in a position to save enough for the large end of contract payment. Other than that, it's not a bad option if it suits your driving habits (low mileage, servicing at the approved garage, etc. - assuming these are part of the Ts&Cs). Anyway, I've gone with the HP option.

Thanks for all the advice.

I was offered 23.5k today on my 152 Xtrail to settle early. As 38.5k new. GFMV is 14k in July. Settlement today (early) is 15.5k. So right now i have 8k equity towards my next car if I settle.

I was also offered 23k, 21k and a miserly 18k by different garages as trade ins. As with anything, shop around. Understand the consequences of PCP. Look at calculators online and understand how it works.

When you say you can afford HP, then you surely can afford PCP. HP over 5 years will have higher monthly payments than PCP over 3. Save the difference to cover final payment and equity left over then becomes a bonus.

Commentators previous to this post advising PCP is getting bad press is solely down to either buyers not understanding it, and dealers not explaining it, or both.

Also look at the APR - if lower on the PCP (lots of low rates out there) then for me, once you understand the arrangement, it's a no brainer.

Mileage: doesn't matter at all unless you hand the keys back. You would only hand the keys back if a) the value of the car was less than the GFMV or b) if your financial circumstances change and you can't afford (same as HP) or c) you are mad and like throwing away money.
Otherwise mileage is simply a factor in a trade in value just as it is with any car and in fact PCP protects against crazy depreciation (say if there was a VW like scandal) as you can walk away when the car is worth less.

Serviced at approved garage: Again exact same as HP. If you want your manufacturer's warranty honoured you get it serviced properly. If you don't then you pay the price if something goes wrong or lost value when trading in. No difference again.

Anyway thought I would defend PCP as annoys me when people badmouth it through lack of understanding. It has risks and dynamics to consider but so does HP and any other loan.