Second round of PCP - increase in spec

Wexy86

Hi

Need someone to break this down in layman’s terms please. I’ve to explain to my mother and I’m not sure on this whole process either.

Took out PCP in 2016 for Dacia Sandero. €5k deposit, was €15500(I think!). Pays €200 per month. 46,000 km on the clock. In essence paid €12k for the car so far I her eyes.

What’s to go into another PCP for Renault Kadjar and will buy after the 3 years are up on this set of PCP. She wanted a 171/172 but garage advised that PCP is only on new cars - is this the case across the board?

Garage have confirmed the below.

Kadjar is €28k, €2k trade in booster so €26k

GMFV : €11,861

Offering €8,500 plus a €2k booster for trade in.

No cash monthly repayments for 36 months €458, €2k cash €398, €5k cash is 309.

She was looking to pay minimal cash and around €300 a month which isn’t the options put forward.

The €458 seems extremely high - €458 poor 36 months is €16,488, plus trade in of €8,500 is €25k and still will have a lump sum(don’t have this number) to at the end

Question - what am I missing here as to why the repayments are so high or is the garage just giving a bad deal? She is going to contact more garages to see if there are other SUV type vehicles of a cheaper nature(not Dacia!) or try get better deal than the current garage.

Thanks for taking the time to read the above

carsfan2

I think you are forgetting that your mother does not own the Dacia and if she puts no money into the new deal, the only deposit going in is the calculated equity she has in it based on the trade in valuation.

Cyrus

you are missing some information here,

what deposit are you getting, i.e. whats left after the finance on the dacia is settled, thats your deposit.

what interest rate are they charging and whats the GMFV?

have a play around with this

http://www.pcp-calculator.com/PCP-loan-calculator.html
q

Toyotafanboi

I suppose at a very basic level the repayments are also much higher as a Kadjar starts at double the price of a Sandero.

MojoMaker

The 28K Kadjar is over 30K with APR don't forget.

Heres Johnny

A 3 year old Dacia Sandero could be picked up for about 7k looking at donedeal. So it's halved in value.

Your mam has paid 12k including interest on a 15.5k car which is now worth 7k. The car has lost 50% in value which is fine, about normal.

If the GMFV is 7k, she has no equity but I'm guessing it will be about 4 to 5k meaning she has 2 to 3k in equity towards her next car. But this completely depends on the GMFV so find that out.

So, on to the kadjar. If she puts in no deposit and wants to drive it for 3 years it too will lose 50% of its value in 3 years so your mam will have to pay 14k at least, probably more, over 3 years which works out at about 5k a year so I see where they are getting their 458 a month from.

Minimal cash deposit and 300 per month means a car can only depreciate about 10k in 3 years. On a 28k car this is extremely low and Renaults aren't highly enough sought after to achieve this.

She is moving to a car worth almost twice as much as the Dacia so repayments will have to adjust accordingly unfortunately.

300 a month with small cash deposit leaves her in the 18k to 20k range of prices, which would be more like Clio money that kadjar money. Or another Dacia but seemingly she wants to move brand.

nice_guy80

That's why PCPs are a financial jungle

Tell her to trade in car and get a normal car loan

Cyrus

nice_guy80 wrote: »

That's why PCPs are a financial jungle

Tell her to trade in car and get a normal car loan

? What do you mean

There are only 3 or 4 variables it's not that complicated

Leprechaun77

nice_guy80 wrote: »

That's why PCPs are a financial jungle

Tell her to trade in car and get a normal car loan

Using a different form of finance does nothing to get rid of any of the issues mentioned. The car still costs the same, it still depreciates etc etc...a car loan probably costs more as the APR is usually higher than PCP.

Just learn about PCP....it’s not rocket science. IF this product is sold properly and the customer fully understands it, I think it is suitable for a huge amount of people. I do believe the product is being mis-sold through many garages and needs to be properly regulated though.

kerten

Also she is not restricted to Renault/Dacia dealers for new pcp even she owes to Dacia dealer. Learn the gmfv she owes and shop other brands to see if there are better deals.

Lantus

Wexy86 wrote:

Took out PCP in 2016 for Dacia Sandero. €5k deposit, was €15500(I think!). Pays €200 per month. 46,000 km on the clock. In essence paid €12k for the car so far I her eyes.

What is the gmfv on the sandero?? I. E what your mum still owes after 3 years.

And what are they going to value the sandero at? I. E give you for it?

The difference is your deposit moving into the next deal plus anything the dealer offers like the 2k sweetener.

On paper paying off the outstanding gmfv seems the best option.

New cars are expensive and a kajar is a massive step up. All suvs are premium products. An arona is cheaper but remember dacia is the cheapest out there so it's all up hill from here.

PCP is under huge equity pressure so equity for a new deposit is small or non existent.

68 lost souls

It sounds to me like maybe the equity is the booster that the OP talked about?