PcP

sohappy

Hi I'm just trying to get my head around PCP finance, looking at this example am I correct in saying that after 37 months you can give back the car and walk away,
So for the use of the car for 37 months it has cost € 20,646
This works out at about €558 per month over the term,
My question is surely it would just work out cheaper to lease a new car for 3 years?

PCP FINANCE EXAMPLE
MAZDA CX-30 MAZDA M HYBRID GS 2WD
SKYACTIV-G PETROL (122PS)
€304/month
36 Monthly Repayments €304 | Term of Agreement 37 Months | RRP €29,495 | Customer Deposit €8,849 | Amount of Credit €20,647 | Acceptance Fee €75| GMFV €11,987 | Option to Purchase Fee €75 | Total Amount Repayable €31,918 | Kms/annum 15,000 | APR 4.9%

L-M

You’ll owe 13k and the end and hope for the car to be worth 17/18 therefore having equity.

Private leases don’t work in Ireland, yet.

sohappy

L-M wrote: »

You’ll owe 13k and the end and hope for the car to be worth 17/18 therefore having equity.

Private leases don’t work in Ireland, yet.

So if you return the car does the garage refund you the difference over 13k if the car is worth 17 k?

circular flexing

sohappy wrote: »

So if you return the car does the garage refund you the difference over 13k if the car is worth 17 k?

No. If you hand the car back, the dealer won't pay anything back to you. In this case you can pay the 11,987 GMFV and then sell the car yourself. Or you can enter into another PCP agreement and you may get some equity from the dealer to put towards the deposit on a new PCP.

Lantus

Handing a car back under pcp is really only an option as an act of last resort say if you are giving up driving, have severe financial issues or the market crashes so much its cheaper to hand car back and buy same or similar cheaper.

In reality you are either rolling into a new deal or buying outright and keeping paying off in full.

sohappy

Thank you for the replies,
I think a large deposit and borrow the rest over 3 years is a better way for me to go,

Pacifico

Most will offer to finance the GFMV too at the end of the 3 years.

L-M

sohappy wrote: »

Thank you for the replies,
I think a large deposit and borrow the rest over 3 years is a better way for me to go,

If the particular car you’re buying is on 0 percent APR, put a low deposit, pay the 3 years of 0 percent and the pay off the lump some with the “large” deposit. Free money that way

Lantus

L-M wrote: »

If the particular car you’re buying is on 0 percent APR, put a low deposit, pay the 3 years of 0 percent and the pay off the lump some with the “large” deposit. Free money that way

Agreed, it's an affordability issue. If you can only afford the monthly with a big deposit then just step back and query affordability.

Unless you are going to save a good chunk over those 3 years to pay off gmfv. 15% deposit gives you a fairly stable payment cycle end to end. So the first 3 years and second 3 will be very similar.