PCP finance.

sheff the ref · 20-07-2017 09:18PM

Whatever the rate is, it is on a smaller amount

Besides the dealer will want to retain you even on a payments plus interest basis as you will need to get a car further down the line. If the dealer lets you off to the credit union, he may never see you again

mickdw wrote: »

Its not in the dealers interest to offer you the cheapest way of keeping your car so im sure whatever rate they will offer will be easily beaten elsewhere.
Im sure the sales pitch will be targeted around this too asking why would you pay 7.9 percent interest to keep an old car when he can give you a new one on a zero interest deal.

Obsolete01 · 20-07-2017 10:33PM

Thinking of PCP but I do approx 30,000kms per year..

Has anyone ever gone above and the 60,000kms and if so were the penalties massive?

Also I would like people opinions that are 5 or 6 years in pcp now. If you could turn back time would you do it again?

Lantus · 20-07-2017 10:51PM

Obsolete01 wrote:

Thinking of PCP but I do approx 30,000kms per year..

Obsolete01 wrote:

Has anyone ever gone above and the 60,000kms and if so were the penalties massive?

Obsolete01 wrote:

Also I would like people opinions that are 5 or 6 years in pcp now. If you could turn back time would you do it again?

Mrs lantus handed car back with 87k on the clock. Upgraded to a bigger car with the increase in monthlys only really a function of car inflation and the slightly increased price if bigger model. Dealer showed zero interest in mileage and never mentioned once.

This will vary between dealers do make sure you ask them.

Obsolete01 · 20-07-2017 10:55PM

Lantus wrote: »

This will vary between dealers do make sure you ask them.

OK, and then at the end of the term, let's say you have a Seat Ateca and you gave a down payment. The of 8k and then the monthly payments were 300.

Then at the end of the three years are you still going to be paying g the 300 or would it be less since your trading in a 3 yr old car for a new car?

jca · 20-07-2017 11:12PM

Obsolete01 wrote: »

OK, and then at the end of the term, let's say you have a Seat Ateca and you gave a down payment. The of 8k and then the monthly payments were 300.

Then at the end of the three years are you still going to be paying g the 300 or would it be less since your trading in a 3 yr old car for a new car?

To keep the repayments at 300 you'll need to have 9K(the extra 1K is a guess for price increases) available at the end of the three years. This 9K will comprise of two parts, The equity in the car which is value over and above the gmfv(balloon payment) that the dealer offers + cash deposit. This is where people are going to be caught, when the 3 years are up there won't be enough equity in the vehicle they're trading in to keep the same monthly payments. Starting off with too high a deposit which gives artificially low monthly payments leads people into a false sense of security.

bazz26 · 21-07-2017 12:21AM

sheff the ref wrote: »

Whatever the rate is, it is on a smaller amount

Besides the dealer will want to retain you even on a payments plus interest basis as you will need to get a car further down the line. If the dealer lets you off to the credit union, he may never see you again

The dealer will want to get you to roll over into another new car and PCP deal. If you're keeping the car and just borrowing to pay off the GFMV then it's the same as walking away to him. He will most likely offer you standard HP finance with a higher interest rate that is more close in line with what the CU or banks are offering and nowhere near as attractive as a new PCP deal.

Lantus · 21-07-2017 09:28AM

Obsolete01 wrote:

Then at the end of the three years are you still going to be paying g the 300 or would it be less since your trading in a 3 yr old car for a new car?

To keep your monthlys the same you need to enter the first deal with a modest or low deposit. Aim for 12 to 15%. This gives you the best set up to maintain steady payments not including car inflation.

If you cannot afford those payments at that deposit then be very wary.

Benildus · 21-07-2017 09:58AM

TheShow wrote: »

not sure where you are based, but Sheey skoda in Naas are doing 0% on used skodas atm. worth checking out.

Interesting, is this on used car pcp or on a normal finance package?

CeilingFly · 21-07-2017 02:26PM

DaveyDave wrote: »

Correct me if I'm wrong but it's my understanding that the balloon payment can be financed through the dealer for another year or two or whatever it is. Is this not true? If it is, what kind of percentage would you have? I see people using a credit union or bank loan for the balloon payment (great way to get a new car to be honest) so I'm assuming a dealer would have a high interest rate?

Yes in the same way any secondhand car can be financed. Usually a personal loan and the dealer gets a commission.

Obsolete01 · 24-07-2017 10:08PM

Has anyone here done pcp and went over the annual 20k mileage? If so how did it affect you

bazz26 · 24-07-2017 10:14PM

Go back a few pages of this thread as it has been discussed a few times.

Excessive mileage only comes into play if you plan on handing the car back and walking away, they will charge a penalty for excessive mileage based per km over the limit. Other than that it only affects the trade-in value when you decide to roll over to another new car and PCP deal. Buying the car outright at the end of the PCP deal and again it makes no difference as you just pay off the GFMV for the car to be yours.

ShadowHearth · 25-07-2017 11:30AM

bazz26 wrote: »

Go back a few pages of this thread as it has been discussed a few times.

Excessive mileage only comes into play if you plan on handing the car back and walking away, they will charge a penalty for excessive mileage based per km over the limit. Other than that it only affects the trade-in value when you decide to roll over to another new car and PCP deal. Buying the car outright at the end of the PCP deal and again it makes no difference as you just pay off the GFMV for the car to be yours.

We really really need FAQ here.

TheShow · 25-07-2017 09:21PM

Benildus wrote: »

Interesting, is this on used car pcp or on a normal finance package?

PCP on used skodas.

nebraska132 · 26-07-2017 07:07PM

Hi,

Can you help? I'm trying to create an excel spreadsheet that will track various pcp quotes. I understand that the interest rate is applied to the full net financing amount after trade in/ dealer contribution etc but how do you apply the GMFV payment to reduce the monthly PCP plan?
Thanks in advance

mickdw · 26-07-2017 07:25PM

Basically the gfv amount is left as an outstanding amount at end of loan term so instead of your monthly payment being enough to fully repay funds within 36 months, your monthly is only enough to repay down as far as the gfv after 36 months.

R.O.R · 26-07-2017 07:47PM

nebraska132 wrote: »

Hi,

Can you help? I'm trying to create an excel spreadsheet that will track various pcp quotes. I understand that the interest rate is applied to the full net financing amount after trade in/ dealer contribution etc but how do you apply the GMFV payment to reduce the monthly PCP plan?
Thanks in advance

The leasing formula should work for this. If I remember in the morning I'll post it from work.

PMT calculation in Excel should work as well but you may need to de vat figures for capital cost and GMFV then re vat the result.

Lantus · 26-07-2017 10:28PM

nebraska132 wrote:

Can you help? I'm trying to create an excel spreadsheet that will track various pcp quotes. I understand that the interest rate is applied to the full net financing amount after trade in/ dealer contribution etc but how do you apply the GMFV payment to reduce the monthly PCP plan? Thanks in advance

Use the car manufacturers calculators to get going. The interest is only applied to the part you pay off over 3 years. The gmfv remains locked at its relative value.

grogi · 26-07-2017 10:29PM

Lantus wrote: »

Use the car manufacturers calculators to get going. The interest is only applied to the part you pay off over 3 years. The gmfv remains locked at its relative value.

You're wrong. The interest is applied to the whole financed amount: price less deposit.

Aka Ishur · 27-07-2017 01:06AM

grogi wrote: »

You're wrong. The interest is applied to the whole financed amount: price less deposit.

As someone just out of first PCP deal with VW, just into second pcp deal with ford- you are wrong gmfv is set aside and you finance price-(deposit+gmfv). explained nicely in the pic- c003_image.lightboximage.jpg

Jobs OXO · 27-07-2017 06:22AM

grogi wrote: »

You're wrong. The interest is applied to the whole financed amount: price less deposit.

Why lie and try and confuse everyone ?

R.O.R · 27-07-2017 06:40AM

You pay the depreciation between the cost price and the GMFV.

You pay interest on the cost price.

All in all · 27-07-2017 07:20AM

Jobs OXO wrote: »

Why lie and try and confuse everyone ?

He is not lying he is correct. Interest charged on total amount outstanding, GMFV is irrelevant to the calculation.

Lantus · 27-07-2017 09:01AM

Another example of confusion!

Interest calculations are quite complex but yes they are applied to the totsl finance amount which includes the gmfv. Its the total cost minus your deposit. But! You only pay that interest in the 3 years off the portion you pay.

So there is no second chunk of interest waiting for you on the gmfv. It's all dealt with up front.

Does anyone have an interest calculator or example? I was trying to work it out last night as I was falling asleep.

mickdw · 27-07-2017 09:07AM

Aka Ishur wrote: »

grogi wrote: »

You're wrong. The interest is applied to the whole financed amount: price less deposit.

As someone just out of first PCP deal with VW, just into second pcp deal with ford- you are wrong gmfv is set aside and you finance price-(deposit+gmfv). explained nicely in the pic-

It appears that way on the marketing stuff but where there is interest involved, it is paid on the total amount. Zero percent deals are the key to pcp imo as you really are then setting aside the gfv amount at zero finance cost otherwise you do pay interest on that outstanding motney all the way through the deal.

grogi · 27-07-2017 09:10AM

Jobs OXO wrote: »

Why lie and try and confuse everyone ?

A confused consumer makes less informed and rational decisions...

But that's not what you were asking about, is it?

mickdw · 27-07-2017 09:13AM

Do people not run basic figures themselves before signing for car deals.
If someone thinks they are not paying interst on the gfv, run the figures in a normal loan calculator. Take the finance amount less gfv. Put that in as loan amount, put in term and interest rate. You will find that you are paying more than what it says due to you also having to pay interest on the lump outstanding all through the term.

grogi · 27-07-2017 09:13AM

Lantus wrote: »

Another example of confusion!

Interest calculations are quite complex but yes they are applied to the totsl finance amount which includes the gmfv. Its the total cost minus your deposit. But! You only pay that interest in the 3 years off the portion you pay.

So there is no second chunk of interest waiting for you on the gmfv. It's all dealt with up front.

Does anyone have an interest calculator or example? I was trying to work it out last night as I was falling asleep.

Take Apr, multiply by average outstanding finance (price-deposit + gmfv)/2 and divide by 12. That's the monthly interest paid.

acronym Chilli · 27-07-2017 09:13AM

It doesn't matter what way interest is calculated. You're supposed to look at these things as a sequence of cash flows. E.g. €10k deposit today, 36xmonthly payment of €330, gfmv payment of €10k

That's what matters: money. Not percentages. The interest number can be communicated different ways. E.g I can charge you 10% on a small number or 5% on larger number. For VW/whoever it's unimportant. They only need to worry about their own WACC and the cashflows.
So they'll try to pick a way to communicate it that is most attractive to buyers.

R.O.R · 27-07-2017 09:57AM

nebraska132 wrote: »

Hi,

Can you help? I'm trying to create an excel spreadsheet that will track various pcp quotes. I understand that the interest rate is applied to the full net financing amount after trade in/ dealer contribution etc but how do you apply the GMFV payment to reduce the monthly PCP plan?
Thanks in advance

Try this - I've checked it against a few PCP figures that you can get online, and it's not giving exactly the same results but it's within a few Euro.

nebraska132 · 27-07-2017 12:32PM

R.O.R wrote: »

Try this - I've checked it against a few PCP figures that you can get online, and it's not giving exactly the same results but it's within a few Euro.

Thanks you for that it's very helpful!

PCP finance.

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