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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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dil999

JaCrispy wrote: »

Nonoperational wrote: »

No. I buy a new car because I like new cars.

But why do you like new cars, as opposed to buying one that's 2-3 years old?

God only knows what the previous owners got up to in them.

Lantus

JaCrispy wrote:

But why do you like new cars, as opposed to buying one that's 2-3 years old?

Why buy 2 to 3 rather than 3 to 4?

Nonoperational

JaCrispy wrote: »

But why do you like new cars, as opposed to buying one that's 2-3 years old?

Lol.

vintagevrs

mickdw wrote: »

The gp is an idiot
The unemployed family shoukdnt be able to afford a new car but are obviously working the system and can possibly well afford it.

mickdw wrote: »

There is no excuse for a seasoned gp to be driving around in a 300 euro car. Its just being a tight arse. Even if they have zero interest in cars, a gp should retain a car of reasonable quality to ensure reliability if nothing else.
No excuse whatsoever to be running such a car.

mickdw wrote: »

The gp here relies on his car for emergency house calls. I think running an 18 year old car in that situation is bordering on reckless.

Jaysus,

I often see you posting in here, and you are one of the better ones at explaining PCP to those that ask or have misconceptions about PCP.

But your opinion on a GP driving a 99 Octavia is a bit out there. Calling someone you don't know, or know anything about a tight arse?

Really?

As stated, no one knows, or needs to know why he/she chooses to drive an older car.

I would guess the Skoda is serving them well and they have no need to change it.

DaveyDave

I wouldn't have thought a Skoda that old would be running well compared to a typical Toyota, but if it's running like clockwork, feck it why not.

I know a few people earning good money but drive 10 year old cars, I don't know their personal or financial situation. It's possible they weren't in good jobs prior and want to get some money together. One of the them is doing lots of work on his house. It's possible they just want a car to get from A to B, if they break they'd probably just replace it with another comparable second hand car.

Someone could have a gambling debt, or maybe just likes going to the states yearly or has an expensive hobby they'd rather put money into. Lots of people have several bicycles worth more than their car.

I wouldn't call someone tight because they're on good money and don't drive a flash new car. Plenty of other things to spend money on

Lantus

A car is primarily a tool to accommodate travel primarily for economic reasons.

The social standing or profession of the owner is irrelevant in relation to the financial product being used to purchase.

Pros and cons of PCP are what we are interested in surely?

[Deleted User]

limnam wrote: »

Maybe we can ask the government to finance 172 Mercs for rural GP's.

Two incase he needs to leave one for a service.

Most gps drive proper cars so no need for the condescending stuff.

My gp has always driven a golf gti, upgraded regulalry another gp in the area drives a Range Rover. I don't know many gp's driving rubbish old cars.

ELM327

Andres Slimy Staircase wrote: »

Most gps drive proper cars so no need for the condescending stuff.

My gp has always driven a golf gti, upgraded regulalry another gp in the area drives a Range Rover. I don't know many gp's driving rubbish old cars.

As opposed to those fake skodas :pac:

veryangryman

Due to pay my balloon payment this week so then i own car outright.

What happens next? Do they send me a receipt, call me etc?

Toyotafanboi

JaCrispy wrote: »

That's a fairly simplistic way of looking at it. Even though he could afford a 172 car what makes him a tight arse for not buying one. Perhaps he is saving for a new practice, kids college fees or early retirement instead of spending 500euro a month to show off to the neighbours, family and friends how much money he is making.

Maybe he's owned th car from new, it has a FSH and it's as fit as a flea.

There's no reason an "older" car can't be dependable.

jca

veryangryman wrote: »

Due to pay my balloon payment this week so then i own car outright.

What happens next? Do they send me a receipt, call me etc?

Anyone care to answer this person or is the GP rubbish going to go on for ages?

ELM327

jca wrote: »

Anyone care to answer this person or is the GP rubbish going to go on for ages?

I know RCI (Renault) send a letter a couple of months before the end of the PCP period inviting the final payment.
I presume others are the same?

veryangryman

ELM327 wrote: »

I know RCI (Renault) send a letter a couple of months before the end of the PCP period inviting the final payment.
I presume others are the same?

Ah yeah got all that, just wondering if i get some sort of documentation confirming that i now own the car, debt is cleared etc after the payment is taken.

ELM327

veryangryman wrote: »

Ah yeah got all that, just wondering if i get some sort of documentation confirming that i now own the car, debt is cleared etc after the payment is taken.

Once you make the final balloon payment you should be sent a receipt confirming the same.

Important to note: The balloon payment is not your last monthly payment, it's the remaining 20-40% of the car's price. It will not be taken automatically, you need to initiate the payment yourself.

acronym Chilli

Andres Slimy Staircase wrote: »

Most gps drive proper cars so no need for the condescending stuff.

My gp has always driven a golf gti, upgraded regulalry another gp in the area drives a Range Rover. I don't know many gp's driving rubbish old cars.

What tyres do they have?

dil999

ELM327 wrote: »

Once you make the final balloon payment you should be sent a receipt confirming the same.

Important to note: The balloon payment is not your last monthly payment, it's the remaining 20-40% of the car's price. It will not be taken automatically, you need to initiate the payment yourself.

My recent PCP is with VW bank. It is stated in my documentation that the final payment will be automatically deducted in month 37 from the account. I asked the finance person in the dealership also and they told be that is the case. I am 99% sure that it was the same situation in my previous PCP with Ford.

carloscorreia

dil999 wrote: »

My recent PCP is with VW bank. It is stated in my documentation that the final payment will be automatically deducted in month 37 from the account. I asked the finance person in the dealership also and they told be that is the case. I am 99% sure that it was the same situation in my previous PCP with Ford.

I think final payment is not the balloon.
In the end of the PCP you have 3 options (from volkswagen site)
https://www.volkswagen.ie/en/offers-and-finance/finance-explained0/pcp.html

Upgrade your car to a newer model using the equity in your car as a deposit for the next one

OR

Return your car to you dealer with no further payments

OR

Make a one-off payment or re-finance the final installment and take ownership of the car

ELM327

dil999 wrote: »

My recent PCP is with VW bank. It is stated in my documentation that the final payment will be automatically deducted in month 37 from the account. I asked the finance person in the dealership also and they told be that is the case. I am 99% sure that it was the same situation in my previous PCP with Ford.

Final payment is the last of the monthly payment, it is not the balloon.

You couldnt - say in the like of a premium car - send a DD to a user's account expecting 25-45k to be available!

For a Model S Tesla for instance, the PCP balloon payment is €45k

dil999

ELM327 wrote: »

Final payment is the last of the monthly payment, it is not the balloon.

You couldnt - say in the like of a premium car - send a DD to a user's account expecting 25-45k to be available!

For a Model S Tesla for instance, the PCP balloon payment is €45k

It is the Balloon Payment. It will automatically be debited out of my account in Month 37. I will be given a number of reminders prior to it happening.

They most certainly do expect it to be available. If you are planning to purchase the car, then you transfer in the €45K into the account before the payment date

ELM327

dil999 wrote: »

It is the Balloon Payment. It will automatically be debited out of my account in Month 37. I will be given a number of reminders prior to it happening.

As per their T+C you have to agree to that, it will not be taken automatically.
Additionally, before it is taken, you have to bring the car to them to be inspected and the mileage noted

https://www.volkswagen.ie/en/offers-and-finance/finance-explained0/pcp.html

At the end of a PCP contract, there are three options:
1. Part-exchange the vehicle for another vehicle of your choice;
2. Keep the current vehicle – pay the final instalment plus the ‘option to purchase fee’ and the car then belongs to you. Alternatively you can speak with a Volkswagen Bank Ireland customer care representative about options to extend the current finance agreement and repay the remaining amount (GMFV) over an agreed period;
3. Return the vehicle to the dealer with no further repayments.

jca

ELM327 wrote: »

As per their T+C you have to agree to that, it will not be taken automatically.
Additionally, before it is taken, you have to bring the car to them to be inspected and the mileage noted

https://www.volkswagen.ie/en/offers-and-finance/finance-explained0/pcp.html

At the end of a PCP contract, there are three options:
1. Part-exchange the vehicle for another vehicle of your choice;
2. Keep the current vehicle – pay the final instalment plus the ‘option to purchase fee’ and the car then belongs to you. Alternatively you can speak with a Volkswagen Bank Ireland customer care representative about options to extend the current finance agreement and repay the remaining amount (GMFV) over an agreed period;
3. Return the vehicle to the dealer with no further repayments.

How much is the “option to purchase fee” I can’t find a figure for that anywhere.

dil999

jca wrote: »

How much is the “option to purchase fee” I can’t find a figure for that anywhere.

There are 2 fees ar the start and end of €75 each. This is probably what the are talking about. In a 0% pcp three are no fees.

The stuff on the website is just basic info and marketing. Details are in the agreement documentation.

Casati

jca wrote: »

How much is the “option to purchase fee” I can’t find a figure for that anywhere.

That's the GMFV figure

What kind of interest rate are VW bank offering to extend I wonder?

Lantus

Casati wrote:

What kind of interest rate are VW bank offering to extend I wonder?

It's 3.9 generally.

dil999

Lantus wrote: »

It's 3.9 generally.

Are you referring to a rate to refinance the GMFV. If so 3.9% would be great I would guess though it's closer to or more than their HP rate, which is 5.9%. It would definitely be higher than the pcp rate. The dealer would prefer you to trade in and buy a new model than refinance the GMFV

dil999

Lantus wrote: »

It's 3.9 generally.

arleitiss

Hopefully this is right place to ask.

Any comments/ideas on used cars PCP? (2012-2014)

I need new car soon (my 2001 golf is falling apart, recently failed dangerously NCT with brake fluid leaking, had it towed and fixed and passed, was given NCT until February) but I don't really have 10k in savings nor I have wish to put down 10k on 2017 PCP deposit.

Ideally - I would love to get PCP on some 2013/2014 and drive it for 3-4 years, then swap for 2017/2018 (this would be in 2021 now) and keep going this way.

I am not super crazy to get latest year but I would prefer something of beyond 2012.

Realistically - I can afford to repay 500-600 Euro monthly.

What about car loans? Do they require deposit?

(Another way I can think of is Personal loan but it's waaaay too high @ 11% APR)

dil999

ELM327 wrote: »

Additionally, before it is taken, you have to bring the car to them to be inspected and the mileage noted

https://www.volkswagen.ie/en/offers-and-finance/finance-explained0/pcp.html

They have no interest in the condition of the car if you are paying the GMFV.

Perhaps I'm the only person it's ever happened to, But they will be automatically taking the payment from my account. I had no choice, if I wished to proceed with the loan

I can't imagine that any finance company are going to allow the loanee to pay the final instalment i.e. the balloon payment any other way.

EndaHonesty

arleitiss wrote: »

Hopefully this is right place to ask.

Any comments/ideas on used cars PCP? (2012-2014)

I need new car soon (my 2001 golf is falling apart, recently failed dangerously NCT with brake fluid leaking, had it towed and fixed and passed, was given NCT until February) but I don't really have 10k in savings nor I have wish to put down 10k on 2017 PCP deposit.

Ideally - I would love to get PCP on some 2013/2014 and drive it for 3-4 years, then swap for 2017/2018 (this would be in 2021 now) and keep going this way.

I am not super crazy to get latest year but I would prefer something of beyond 2012.

Realistically - I can afford to repay 500-600 Euro monthly.

What about car loans? Do they require deposit?

(Another way I can think of is Personal loan but it's waaaay too high @ 11% APR)

You can buy a NEW Dacia Sandero on PCP from €99 per month with €3317 deposit. APR 5%.

A service pack is available for an extra €15.25 per month.

So no extra costs like servicing & NCT for 3 years. Just PCP, fuel, insurance and motor tax. So maybe €200-€300 per month total.

Your post above implies that you are not fussy about brands and just want a reliable car.

With deals like this Dacia one you'd be mad to spend €500-€600 per month on a used car.

26000 Elephants

EndaHonesty wrote: »

So no extra costs like servicing.... for 3 years.

Ah, you pay €550 for servicing.

Silly add-ons notwithstanding, thats still a reasonable deal if you are not fussy about cars.