PCP finance.

sheff the ref wrote: »

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

You should probably know how much is owing at the end of 3 years.

The balloon payment or what the call GFMV in PCP contracts is the outstanding amount owed. Pay it and the car is yours. Nothing hidden - millage, condition etc make no difference at all here.

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.

So it's not only me then!!!!

Every 6 months he gets a 4 page spread in the Indo telling people how to save money with their personal finances and he trots out that nugget of wisdom to "shop around" for the best deal.

I don't know how he gets away with it

mickdw wrote: »

Think about it logically. You have paid for all the car bar 8k at the end of the term. If you pay that 8k, you own it. The car can have 200k miles and be missing 2 wheels. nobody cares- is your car.
Option 2 is to trade against a new car. dealer will offer trade in price. Anything over and above the gfv who form deposit on next car. Condition and mileage will clearly effect the trade in offer in this case just as it would taking in any car. It is possible that a car in poor condition may not even cover the gfv in an extreme case.
Option 3 is to hand back keys and walk away. If car is damaged or has high miles, there may be charges applied.

Thx, I done my research a lot about it and that was the conclusion I came in, but during last few weeks in other threads people put some weird things about paying off balloon payment.
If its still the same figure you signed for after paying zero apr and using scrapage deal, then it's as good as ever.

I think a lot of people overlook last option. Yes, financially it looks worst and a real kick in the teeth of you need to give away car and walk away. Thing is, it is an option for people who will have a financial struggle for one reason or other. If shot went south after 3 years, then you can just throw keys and walk away. In hp you will suffer all 5 years. We had threads here before about hp loop hole, where you could just turn in car after half term and walk away. Some people did it as it was best financial choice. Cut your losses and move on without any debt.

ShadowHearth wrote: »

I think a lot of people overlook last option. Yes, financially it looks worst and a real kick in the teeth of you need to give away car and walk away. Thing is, it is an option for people who will have a financial struggle for one reason or other. If shot went south after 3 years, then you can just throw keys and walk away. In hp you will suffer all 5 years. We had threads here before about hp loop hole, where you could just turn in car after half term and walk away. Some people did it as it was best financial choice. Cut your losses and move on without any debt.

Well in HP or PCP once you have paid back half the value including interest you can walk away and hand the car back to bank.

jimmycrackcorm wrote: »

Not even that! He compared pcp's to sub prime lending with absolutely no understanding what sub prime lending is.

Pcp: buyer only gets car having shelled out a deposit plus then paying an affordable monthly rate.

Whereas from wiki... In finance, subprime lending (also referred to as near-prime, non-prime, and second-chance lending) means making loans to people who may have difficulty maintaining the repayment schedule, sometimes reflecting setbacks, such as unemployment, divorce, medical emergencies, etc.

Incompetent reporting, traditional hp in comparison is closer to sub prime than a pcp, given the more potentially difficult monthly repayments.

In fairness to him I don't think he was saying that they are the same thing. He was saying that the PCP could cause a crisis on the same scale as sub-prime lending. I don't have any figures on it so can't agree or disagree.

I often hear him on the last word on my way home. His analysis is often very basic, I agree, and I'd rarely learn anything I didn't already know from his piece. It's probably targeted at people with very limited knowledge on the subject. People who are a bit more savvy will likely have done their own research on the subject anyway.

superg wrote: »

Interested in getting a new car this year, however not brand new. I'd imagine there'll be alot of 141's arriving back from pcp's over the coming months. Is pcp finance possible/worth it on a 3 year old car?

Problem with doing PCP on a 3 year old car is that there is still a balloon payment when the PCP term matures when the car is 6 years old. While the balloon payment may not be very high at that stage, you maybe required to put in a sizable deposit on day 1 to keep monthly repayments respectable. Also if you decide to hand the car back at year 3 and take out another car on PCP then you may be required to put a substantial deposit up front again to keep repayments close to what you were paying before. Your 6 year old car may not have enough value in it either to put towards that deposit if you want to go again. In this case it might make more sense to go PCP on a brand new car imo but you would need to do some maths.

I can quote the exact figure if I root out my paperwork but it is in or around 6500.

From memory, my deal was based on three portions that were similar enough amounts

1.The trade in value of my old car
2.The amount paid over three years
3.The remaining sum owed on the car

Give or take a few quid, you are talking 6500 to 6700 each portion

Soarer wrote: »

So "shef the ref" above would've been given a GMFV of €6,500 when he signed the PCP agreement?

Seems very low doesn't it? Especially at 0%.

368100 wrote: »

I've just bought a 152 Mercedes on pcp....Mercedes star finance (boi finance) won't do it but this is with first auto finance, arranged through merc dealer and at same rate as Mercedes star finance

Sounds great - would you mind giving an indication of the deal?

total cost of finance for a 152 merc - €2700 (excl. the deposit of course) - not bad.
Well wear.

Thanks for the info. I'm still having a think and doing some maths. There seems to be very little in the way of 141 or 151s that I'd be interested in if carzone is anything to go by, I want a family saloon but everybody appears to be buying diesel over the last number of years and I want petrol so my choice is limited all of which is pushing more towards the idea of a new one on PCP.

I'd really rather not though! Bought my current car at 3 years old and have it 7 years, another 3 or 2 year old car for a lot less money than a new one would be ideal.

do you mean to buy outright , not a PCP?
also what are the options - do you mean you get 5.9 percent if you take the dealer contribution or 2.9 percent if you don't?

Yes, PCP...... ITs either or........either the 4K contribution but 5.9% APR or no contribution and 2.9% APR.......I think the 4 K upfront is a better deal,,,,,,,?

I doubt you can pay 26k deposit on a PCP on a 56k car.

what is the gfv cause the more that is left outstanding til the end, the more interest you will pay.

On straight forward hire purchase, the 5.9 rate while borrowing 4k less due to contribution would certainly be the best but I will run rough figures if you give pcp details re deposit and gfv