PCP Question

Eircom_Sucks

sorry if this has been asked a million times

looking at buying a new car and looking at pcp

1 question which i thought i had the answer to but a work friend is adament i'm wrong

example : at the end of my 3 years on pcp and my car has a final gaurantee of say €15k , but if the market value is say €20k that means i have €5k to use as my deposit going into another 3 year plan ( is this correct ? )

my work friend seems to think that after 3 years i just hand it back and roll into another 3 years with nothing being put up except the car ( no additional cash ) , says he has a few friends who do this

can anybody clarigy this ? i will be sitting down with a sales person this weekend , but wanted to see if anybody on here has a clue

shanec1928

yes youd have 5k towards the deposint for the next car

Miscreant

You are correct. There is a guaranteed minimum value (GFMV) agreed with the dealer at the beginning of your PCP contract. When you return the car after the term is up, the car will be valued based on condition, mileage and what equivalent models are worth at that time. As you pointed out, the GFMV may be 15k but the dealer may value the car higher than this when the time comes. The difference between the 2 values is what you can use as your deposit for a new model.

I have a friend who does this every 3 years and he usually has a few grand in extra value towards a new car.

NIMAN

I think you are right.

If the dealer says they will give you 20k for the car, and you have a GMFV of €15k, then you have 5k as a deposit.

It allows you to go another other dealers, and see if any of them would give you a better deal. All you owe is the GMFV of 15k. If another dealer says they will give you 22k for your car, then you can go with them.

Eircom_Sucks

just back from looking at a Peugeot 3008 GT Line , extra 2500 than what is quoted on the peugeot site , fooking grinds my gears why they can simply add in delivery and metalic paint and to the price on the website

so im trading in a 132 GTD being offered about €8000 but could be more as he didnt look at it , i just wanted a ball park to see where the numbers line up

so with my trade in and about €600 a month 😳 i was like wtf , on the site again its lower based on % as a deposit or trade in etc

now i could pay the €600 no probs as i don't have a mortgage anymore but just seems alot to then be hit with €16k baloon payment aswell

so will have to evaluate it more or look elsewhere for a diff car

lead time when ordering would be 4 months from windsor airside if anybody is looking for delivery times

bazz26

People tend to ignore the overall cost of the car and only focus on the monthly repayment figures. In your example you are still paying for a 40k+ car whether by PCP or another finance method. PCP front loads the interest generated on borrowing the total cost of the car over 3 years, minus your trade-in or deposit. This also includes interest generated on the final/balloon payment figure due at the end of year 3 whether you opt to pay it off at that point, hand the car back or roll over into another PCP deal.

So going off the figures you have given this is what the car will be costing you:

deposit/trade-in - 8000

monthly repayments (600 x 36) - 21,600

final payment - 16000

Total: 45600

Eircom_Sucks

https://www.boards.ie/discussion/comment/118541459#Comment_118541459

yep

question is , do i need something that expensive ?

im a 41 year old male with 2 kids ( 9 & 11 )

my days of fast cars etc i'd say are over

bazz26

Well only yourself can answer that question. If you are happy with your current car and there is nothing wrong with it then it makes little sense to get on the PCP train.

Eircom_Sucks

https://www.boards.ie/discussion/comment/118544538#Comment_118544538

high mileage and starting to show some issues , id rather not throw good money after bad

Diemos

https://www.boards.ie/discussion/comment/118545582#Comment_118545582

That's a bit of a logical leap though, the new car will loose more than the value of your current car in the 1st year alone.

I doubt that much could go wrong in your current car.

And congrats on being mortgage free at 41, not many folks can say that.

Eircom_Sucks

https://www.boards.ie/discussion/comment/118545778#Comment_118545778

bought at 20 over 20 year mortgage and a decent job helps lol

what the car loses doesn't really matter , as i know its history and i'll be the only driver etc

what i have now i bought second hand with 200,000 km on it ( worst mistake ever and lesson learnt )