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PCP finance.

[Deleted User]

Ok so after a while of my brother and I trying to figure out the benefits of PCP we can't find any.

He's looking at getting a new Audi and we've been looking into pcp, he changes every 2 years or so and might have 15 k miles maximum on the clock so we thought pcp might suit him better.

You got to come up with a large deposit if you don't have a trade in and while your monthly payments appear low when you add in the fact you need a new deposit for the new pcp after 3 years your 300 a month pcp suddenly turns into 600+ pm.

So what's the benefit over hp or bank loan ?

The only hing with hp or loan is you pay the full interest where as pcp yup don't ?

Either way I see little benefit on a normal loan and trade in and re finance after 3 years or so. Only thing is VW bank has much lower interest than any other bank or finance.

For me doing 20-25 k miles a year pcp would leave me with not much on the gfv.

It seems to me that people could get caught out at the end because you can be damn sure you won't have much over the gfv to use as a deposit.

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Lantus

grogi wrote: »

Great motor... Me is envious

I think you should go for it, it seems you definitely can afford it and are sensible about it

I think you're still too optimistic about the future value, hope I am wrong. Just answer this question to yourself: would you pay €24000 cash for a 3 year old vRS, just out of the warranty, when you can have a brand new for €37k (with 0% PCP).

The new Octavia in April will attract the 3.9% interest rate so now is a good time to buy. The additional cost of credit will stabilise re sale rates as the new ones become more expensive.

We are trading in a 3 year pcp now for an Octavia on zero. Possible intention to keep. They are good solid cars with excellent resale values so no real worries.

ShadowHearth

Lantus wrote: »

The new Octavia in April will attract the 3.9% interest rate so now is a good time to buy. The additional cost of credit will stabilise re sale rates as the new ones become more expensive.

We are trading in a 3 year pcp now for an Octavia on zero. Possible intention to keep. They are good solid cars with excellent resale values so no real worries.

New face lofted Octavia can only attract a paper bag. :pac:

I love current shape, but i just wouldn't touch the one that's coming out next year. It looks like skoda somehow manages to make great looking cars, but only every second generation lol.

jca

ShadowHearth wrote: »

New face lofted Octavia can only attract a paper bag. :pac:

I love current shape, but i just wouldn't touch the one that's coming out next year. It looks like skoda somehow manages to make great looking cars, but only every second generation lol.

It doesn't look that different really. I'm struggling with the mk3 anyway, the back is terrible it always looks like it's had a rear end shunt. I hoped they were going to soften that crease across the back. There's no doubt that from a pcp point of view they're one of the safest bets out there.

Micky 32

Is it easy enough to get approved for a PCP without the rubber glove treatment? I had a hp from VW Bank with no probs..

Ryath

Micky 32 wrote: »

Is it easy enough to get approved for a PCP without the rubber glove treatment? I had a hp from VW Bank with no probs..

Not a whole lot to it just provide earnings and bank details. If you got a HP from VW Bank you should have no problems with PCP. You probably would even be approved straight away. Sales man commented when we applying that if you had applied previously they do approve some people instantly. It usually just takes a few hours for approval. Just had supply ID and proof of address then when signing the paperwork.

ShadowHearth

Ryath wrote: »

Not a whole lot to it just provide earnings and bank details. If you got a HP from VW Bank you should have no problems with PCP. You probably would even be approved straight away. Sales man commented when we applying that if you had applied previously they do approve some people instantly. It usually just takes a few hours for approval. Just had supply ID and proof of address then when signing the paperwork.

What they need to prove earnings?
And is there an issue if I got second bank account for my savings where majority of my money is. Would it be linked to my main bank account? ( sorry, a bit off topic, but I never had done such things with dealers))

sillysocks

Micky 32 wrote: »

Is it easy enough to get approved for a PCP without the rubber glove treatment? I had a hp from VW Bank with no probs..

I couldn't believe how easily I was approved for PCP. It might depend on who the finance company are but I literally told them my salary, didn't provide any proof, had only been in the job 8 months which I told them and didn't even get asked to provide bank statements. I guess they own the car until the term is finished so maybe it's becaue it'd be easy enough for them to take the car back if you defaulted but I still was surprised how easily they approved me (on over 20k of finance).

Micky 32

ShadowHearth wrote: »

What they need to prove earnings?
And is there an issue if I got second bank account for my savings where majority of my money is. Would it be linked to my main bank account? ( sorry, a bit off topic, but I never had done such things with dealers))

I remember when i applied for the HP with VW bank 3 years ago. I didn't have to provide anything ( just ID) they just asked what i earned ( i work for myself so earnings can vary week to week) and typed it in and i got approved next day. I did put a big deposit down( more than 50%) and i know i have a good credit history.

air

It's no more risk than a rental car company runs when they give you the keys really.

Micky 32

What if someone had 3-4 payments left on an existing vw bank hp loan could one just pay that off and settle and then re apply for a new car? Would there be a huge extra cost to settle that little bit earlier?

mickdw

Micky 32 wrote: »

What if someone had 3-4 payments left on an existing vw bank hp loan could one just pay that off and settle and then re apply for a new car? Would there be a huge extra cost to settle that little bit earlier?

Bread and butter stuff for dealer.
Basically they get your settlement figure on outstanding loan.
Value your trade in.
Deduct settlement amount. This is your deposit.
If you go ahead, they then settle the outstanding money and set up new finance deal.
you could equally just settle it yourself. If you intended selling private, that would be the way to go.

Lantus

Average time of a PcP deal is 26 months. You can trade up any time. A lot of people get ongoing valuations and weigh up the best time to refinance subject to mileage, deals etc.

Think of the 3 years as the maximum.

Micky 32

I payed off the small remaining VW Bank HP (not PCP) on my 3 year old Passat last week. So i went in to order a new 2.0 BiTDI Passat and applied for a PCP. It approved straight away on the computer because i was on the system from the last loan, very handy. Got it for 1.9% apr too..Also you still get your straight deal discount on pcp.

carsfan2

Did you trade in the Passat against the new one?
I can't imagine there's too many biturbo Passats on the road.
I imagine it's quick. Does it have 4 wheel drive?

Micky 32

carsfan2 wrote: »

Did you trade in the Passat against the new one?
I can't imagine there's too many biturbo Passats on the road.
I imagine it's quick. Does it have 4 wheel drive?

Yeah , they are 240bhp 4 motion DSG bit of a sleeper 0-100kmhr 6.1 secs 240 km/hr top end. No buying off dealer straight , selling private. I'm in no rush to sell mine anyway, 12 week wait factory order.

carsfan2

I thought VW were doing 0% on the passat.
sounds like a lovely car though. Will it not be a heavy depreciator though?

Micky 32

carsfan2 wrote: »

I thought VW were doing 0% on the passat.
sounds like a lovely car though. Will it not be a heavy depreciator though?

Unfortunately you'll find there's always a bit of a catch with 0%. Factory orders don't qualify for the 0% only stock available cars in the country and also have to be registered by end of january. My car won't arrive until Feb/March...

Yep it will probably depreciate a bit but it's a quick car and i'm keeping this car for a bit longer than usual. Also it won't be siting in the driveway. It's being used for work so the car is creating my income so it's not all bad.

carsfan2

1.9 per cent is still excellent with a good discount too sounds great deal.
Enjoy.

Jack lemmon

Micky 32 wrote: »

Unfortunately you'll find there's always a bit of a catch with 0%. Factory orders don't qualify for the 0% only stock available cars in the country and also have to be registered by end of january. My car won't arrive until Feb/March...

Yep it will probably depreciate a bit but it's a quick car and i'm keeping this car for a bit longer than usual. Also it won't be siting in the driveway. It's being used for work so the car is creating my income so it's not all bad.

I bought a factory ordered VW in early May it arrived mid July and I got 0% pcp. Interesting if they've now changed the T&C!

Micky 32

Jack lemmon wrote: »

I bought a factory ordered VW in early May it arrived mid July and I got 0% pcp. Interesting if they've now changed the T&C!

If it ran into August you might not have got the 0%. According to the VW website "0% PCP offer applies to Passat highline and highline business edition stock orders only , ordered before Dec 31st and registered before Jan 31st" Still 1.9% is excellent value..

It's hard to know what's clear because it also states the 399 euro upgrade pack is free if ordered before Dec 31st on stock orders but i got mine free when i ordered my factory order yesterday..

duffer247

First time buyer (of new car) here.
I'm looking at a Hyundai i10 deluxe on the scrappage scheme; no deposit is very attractive. What I'm struggling to understand is why the price (excl delivery etc.) on the main website is €14,495 yet the price listed in 2 dealerships I've visited is €15,445 & €15,495./are they charging a grand for delivery etc?
They're are also quoting €270 and €244 pm for 36 months on pcp (incl extra €500 for metallic paint). Website has repayments under €200 per month. Knew there would be an extra cost as its clearly labelled, but just think €1k is steep.

jelutong

Article by Charlie Weston in yesterday's Sunday Independent headed,
"PCP car finance deals could be a sub-prime mess all over again".
Worth a read.

Atlantic Dawn

The article...

http://www.independent.ie/business/personal-finance/charlie-weston-pcp-car-finance-deals-could-be-a-subprime-mess-all-over-again-35331251.html

Mantis Toboggan

Still the best way to buy a new car imo.

NIMAN

.... as long as you can afford it.

mickdw

Poor article. Very basic information tbh.
While the argument is valid, it is over simplified really.
Say the industry tanks, and people just hand back their pcp car at 3 years old. The worst case is that they have to look at buying another 3 year old car of similar standard. They should be able to finance such a car with an affordable monthly even with very little deposit especially so if the market has tanked.
Very unlikely to tank to that degree though so the most likely outcome would be people buying out existing car at end of deal if there is little equity available.
The think the industry has further steps to promote sales.
Low and zero deposit deals with manufacturer contributions. we are seeing the start of this while uk have stronger versions with little deposit requirement. If those deals become common, it would take all the fear out of pcp - no equity at end to worry about as no deposit up front. Would generally take heavy discounting from manufacturers to make the figures work.
In additional, supply and demand will also be in play so if new car sales reduced heavily due to tanked values and people started to buy up the plentiful ex pcp cars, it wouldn't take long for the supply of used cars to dry up and as such values build etc making a new car a good option again.
I don't have a PCP but at low rate, it's a good way to buy if you can truly afford the car. No doubt there are cars being sold to people who can't afford the deals and will end badly but that is the case across all finance in all markets.

NIMAN

Charlie Weston......the master of the bleeding obvious.

I often listen to him on Matt Coopers Last Word, as I know as much about finance as he does, for a man that does it for a living. And didn't he get some award recently too? Some people are easily impressed.

sheff the ref

PCP definitely has its advantages.

My car was 20,000 or so new and I have 3 years on 0% finance. I think there is €6500 owed at the end of the three years. I will be keeping it as my mileage is too high

You wont get many 3 year old cars of any size for €6500

c montgomery

NIMAN wrote: »

Charlie Weston......the master of the bleeding obvious.

I often listen to him on Matt Coopers Last Word, as I know as much about finance as he does, for a man that does it for a living. And didn't he get some award recently too? Some people are easily impressed.

I'm always shocked how basic his slot on matt Cooper is. Common sense must be in short supply if his advice is winning him awards.

grogi

c montgomery wrote: »

I'm always shocked how basic his slot on matt Cooper is. Common sense must be in short supply if his advice is winning him awards.

You would be surprised how sparse it is unfortunately...