nav[aria-label="Primary Navigation"] { padding: 0; & ul { list-style: none; width: 100%; display: flex; flex-direction: row; justify-content: start; align-items: start; gap: 30px; padding: 0; & li { margin: 0; } & ul li { list-style: none; } } }

Child Item

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.

Find more posts tagged with

Quick Links

Comments

Lantus

Getcover this a little odd.

You handed over a deposit before a car. price or approval for finance had even been agreed? Why?

When the dealer made a slight mistake that was easily rectify able you went off and ordered another car and laid down 300 again before a model or price was formed up or agreed.?

On the one hand your flush for cash but no need to do this so early on.

Hopefully dealer refunds, ask nicely.

robm77

My pcp finance is finished in february, and i was going to hand the car back as im not 100% happy with it, however in the last 2 weeks the dealer i bought from has closed up shop completely and gone.
Who will i have to return the car to?
Anyone have any similar experience of this happening?

mickdw

Firstly, handing it back is throwing away any value over and above what is owed on it so it's the worst way out.
If you do go to hand it back and that dealer is gone, I'd imagine you contact any dealer for that brand.
What I would do is get trade in values against new cars, see how much over and above amount owed is being offered and from there make a decision as to whether you are throwing away money or not by handing it back.
In reality, it might be worth 1500 or so less than the trade in offers. So for example if it appears that the car on trade in is only achieving 1500 over gfv, you would do just as well handing it back cause you would do just as well buying straight on next car.

Jobs OXO

robm77 wrote: »

My pcp finance is finished in february, and i was going to hand the car back as im not 100% happy with it, however in the last 2 weeks the dealer i bought from has closed up shop completely and gone.
Who will i have to return the car to?
Anyone have any similar experience of this happening?

Wow ! So they do indeed exist.....

26000 Elephants

robm77 wrote: »

My pcp finance is finished in february, and i was going to hand the car back as im not 100% happy with it, however in the last 2 weeks the dealer i bought from has closed up shop completely and gone.
Who will i have to return the car to?
Anyone have any similar experience of this happening?

Your PCP contract is with a finance company, not the dealer. It should be clearly stated on your contract documents who they are.

You can just go to any car dealer with that info and they should be able to finish the deal for you - either find a settlement figure to keep the car or trade for a newer one.

DaveyDave

Hi all, dealer said to bring a bank draft for my deposit when collecting the car but I initially used card when placing the order. Can I use my card again for the remaining €5,500 or will I need to get a bank draft? Don't have time to call them right now as I'm heading to work...

Doddles88

So I had agreed a deal with VW for a new car being delivered 2018. Everything signed, deposit down and car ordered. It was agreed I would be financing it through PCP. They asked for statements etc etc which I provided. They subsequently came back requesting a guarantor because I had no previous credit history (even though through my bank statements and payslips it shows that I can easily cover the monthly repayments). This was reluctantly agreed to by myself because I just feel I am old enough not to need help from my parents but anyway I got them to be guarantor. VW Bank then came back requesting that the repayments would be taken out of my Dad’s account as opposed to my own. Basically as if my Dad was the one getting the car financed. So hypothetically after 3 years if I was looking to trade in for a new PCP I still would have no credit history because the previous loan was in my Dad’s name.

Am I right in thinking this is rather unfair. I would have thought no previous debt and a proven ability to comfortably cover the repayments would be the ideal situation for these places? Should I expect the same conditions if purchasing a different brand?

R.O.R

26000 Elephants wrote: »

Your PCP contract is with a finance company, not the dealer. It should be clearly stated on your contract documents who they are.

You can just go to any car dealer with that info and they should be able to finish the deal for you - either find a settlement figure to keep the car or trade for a newer one.

On most PCP deals the GFV is underwritten by the dealer rather than the finance provider though (VW seem to be the only one where it's not the dealer). I presume in the case where a dealer has gone under and therefore can't uphold their end of the bargain, that the buy back reverts to the finance provider.

mickdw

Doddles88 wrote: »

So I had agreed a deal with VW for a new car being delivered 2018. Everything signed, deposit down and car ordered. It was agreed I would be financing it through PCP. They asked for statements etc etc which I provided. They subsequently came back requesting a guarantor because I had no previous credit history (even though through my bank statements and payslips it shows that I can easily cover the monthly repayments). This was reluctantly agreed to by myself because I just feel I am old enough not to need help from my parents but anyway I got them to be guarantor. VW Bank then came back requesting that the repayments would be taken out of my Dad’s account as opposed to my own. Basically as if my Dad was the one getting the car financed. So hypothetically after 3 years if I was looking to trade in for a new PCP I still would have no credit history because the previous loan was in my Dad’s name.

Am I right in thinking this is rather unfair. I would have thought no previous debt and a proven ability to comfortably cover the repayments would be the ideal situation for these places? Should I expect the same conditions if purchasing a different brand?

Tell them to stick it.
You are an adult, with your own money and providing a guarantor. If that does not satisfy them, walk away.

Wynner05

Doddles88 wrote: »

So I had agreed a deal with VW for a new car being delivered 2018. Everything signed, deposit down and car ordered. It was agreed I would be financing it through PCP. They asked for statements etc etc which I provided. They subsequently came back requesting a guarantor because I had no previous credit history (even though through my bank statements and payslips it shows that I can easily cover the monthly repayments). This was reluctantly agreed to by myself because I just feel I am old enough not to need help from my parents but anyway I got them to be guarantor. VW Bank then came back requesting that the repayments would be taken out of my Dad’s account as opposed to my own. Basically as if my Dad was the one getting the car financed. So hypothetically after 3 years if I was looking to trade in for a new PCP I still would have no credit history because the previous loan was in my Dad’s name.

Am I right in thinking this is rather unfair. I would have thought no previous debt and a proven ability to comfortably cover the repayments would be the ideal situation for these places? Should I expect the same conditions if purchasing a different brand?

Looks to me like VW Bank are going to turn your application down and the dealers are trying to find a way to make it go through and still get a sale, seems a very strange request to say it came from VW bank.

Masala

That would put me right off VW...... I definitely would walk away.

All in all... VW still own the car so they completely covered on their side.

As mentioned above.... sounds very Del-boy / Arthur Daly stuff from the Salesman

Ivefoundgod

The request for a guarantor isn’t in itself unusual given you have no lending history and would be a common request for large lending. If there is no repayment history at a certain level underwriters will look to cover that lack of history with a suitable guarantor. Repayment capacity is not the only criteria. Each lender would have different criteria so you could shop around if not happy.

I wouldn’t be agreeing to allow repayments from your fathers account under any circumstances. I’d say the dealers are submitting a joint application in order to get it over the line.

EndaHonesty

Doddles88 wrote: »

So I had agreed a deal with VW for a new car being delivered 2018. Everything signed, deposit down and car ordered. It was agreed I would be financing it through PCP. They asked for statements etc etc which I provided. They subsequently came back requesting a guarantor because I had no previous credit history (even though through my bank statements and payslips it shows that I can easily cover the monthly repayments). This was reluctantly agreed to by myself because I just feel I am old enough not to need help from my parents but anyway I got them to be guarantor. VW Bank then came back requesting that the repayments would be taken out of my Dad’s account as opposed to my own. Basically as if my Dad was the one getting the car financed. So hypothetically after 3 years if I was looking to trade in for a new PCP I still would have no credit history because the previous loan was in my Dad’s name.

Am I right in thinking this is rather unfair. I would have thought no previous debt and a proven ability to comfortably cover the repayments would be the ideal situation for these places? Should I expect the same conditions if purchasing a different brand?

Car finance is usually one of the easier forms of credit to get.

It looks like VW bank are refusing you credit so you should check your credit rating with ICB in case there is an incorrect rating which is affecting your application.

It will take some time to check with ICB so I would suggest you withdraw your application, as a formal refusal from VW bank will negatively affect your credit rating...

Masala

EndaHonesty wrote: »

It will take some time to check with ICB so I would suggest you withdraw your application, as a formal refusal from VW bank will negatively affect your credit rating...

... that's a good point.

Doddles88

Car finance is usually one of the easier forms of credit to get.

It looks like VW bank are refusing you credit so you should check your credit rating with ICB in case there is an incorrect rating which is affecting your application.

It will take some time to check with ICB so I would suggest you withdraw your application, as a formal refusal from VW bank will negatively affect your credit rating...

The application has already been refused. I have contacted VW Bank directly to gain a greater understanding of what the problem is.
As for having an incorrect rating, surely having never had or even applied for credit before it is more a case of having no history which has gone against me as opposed to an incorrect rating? Again not sure, I will wait to see what VW bank say.
The way it has been put across to me, I should take out a small loan and pay it back to increase my credit rating. Am I the only one that thinks this is pure bonkers to get myself into debt just to prove I can pay it off? Just throwing money away.

EndaHonesty

Doddles88 wrote: »

The application has already been refused. I have contacted VW Bank directly to gain a greater understanding of what the problem is.
As for having an incorrect rating, surely having never had or even applied for credit before it is more a case of having no history which has gone against me as opposed to an incorrect rating? Again not sure, I will wait to see what VW bank say.
The way it has been put across to me, I should take out a small loan and pay it back to increase my credit rating. Am I the only one that thinks this is pure bonkers to get myself into debt just to prove I can pay it off? Just throwing money away.

By being refused credit from VW your credit rating will now be negatively affected.

If I was you I'd be checking with the ICB to see if there is an incorrect credit rating against you.

If there's no errors with your score then I would buy a car with a credit union loan to get you started on the credit "ladder"...

Doddles88

EndaHonesty wrote: »

By being refused credit from VW your credit rating will now be negatively affected.

If I was you I'd be checking with the ICB to see if there is an incorrect credit rating against you.

If there's no errors with your score then I would buy a car with a credit union loan to get you started on the credit "ladder"...

Again I do not know if you are necessarily 100% correct there. I know for fact through reading BMW's terms a declined application from them does not affect a credit rating.

"We do not subsequently record the decision made by us in respect of the application. Therefore if your application is declined it should not impact your credit rating."

This could be different for VW, but I hope it is not haha. Nothing I can do now until I hear back from VW Bank. Just very disappointed.

26000 Elephants

R.O.R wrote: »

On most PCP deals the GFV is underwritten by the dealer rather than the finance provider though (VW seem to be the only one where it's not the dealer). I presume in the case where a dealer has gone under and therefore can't uphold their end of the bargain, that the buy back reverts to the finance provider.

I've never heard of that ( we certainly dont structure deals that way) but if that is the case then he should be pretty happy. Drive away until the receiver for the dealer gets in touch, and then negotiate a rock bottom settlement with them.

But I would be surprised if that is the case.

Ivefoundgod

The ICB is a bit of relic and is being replaced by the CCR next year. Not all credit institutions report to the ICB, some credit unions don't for example. VW bank have no obligation to report your declined app to the ICB, also, being declined credit will show for 3 months (if i'm remembering right) and is not a black mark to another lender unless there are further issues around the decline, i.e. you misled or lied on the application.

maidhc

EndaHonesty wrote: »

Car finance is usually one of the easier forms of credit to get.

It looks like VW bank are refusing you credit so you should check your credit rating with ICB in case there is an incorrect rating which is affecting your application.

Maybe the posters income just isn't high enough for the underwriters and VW bank are just being prudent. This sense of entitlement to borrow is just the ****e I used to listen to 10 years ago.

Doddles88

maidhc wrote: »

Maybe the posters income just isn't high enough for the underwriters and VW bank are just being prudent. This sense of entitlement to borrow is just the ****e I used to listen to 10 years ago.

Maybe, maybe not. The monthly repayment agreed was around 13% of my monthly net income. Not a stretch for me at all and I'm fairly certain I'd still have been able to afford a couple of holidays throughout the year and a few pints at the weekend. I don't feel entitled to anything. I worked hard for 5 years to get my bachelors degree and then masters and then the good job I have today. Don't be wrong, not being approved is not because of my income, it because I have never needed to borrow money before and thus have no credit history. Confirmed by the business manager in the dealer.

maidhc

Doddles88 wrote: »

Maybe, maybe not. The monthly repayment agreed was around 13% of my monthly net income. Not a stretch for me at all and I'm fairly certain I'd still have been able to afford a couple of holidays throughout the year and a few pints at the weekend. I don't feel entitled to anything. I worked hard for 5 years to get my bachelors degree and then masters and then the good job I have today. Don't be wrong, not being approved is not because of my income, it because I have never needed to borrow money before and thus have no credit history. Confirmed by the business manager in the dealer.

Fair enough. Seems inherently manageable. You don't necessarily need a credit history to borrow though. My first loan was 60k for a business, unsecured, in the depths of the credit crunch. It wasn't necessarily easy to get, but not too hard either.

DaveyDave

Doddles88 wrote: »

Maybe, maybe not. The monthly repayment agreed was around 13% of my monthly net income. Not a stretch for me at all and I'm fairly certain I'd still have been able to afford a couple of holidays throughout the year and a few pints at the weekend. I don't feel entitled to anything. I worked hard for 5 years to get my bachelors degree and then masters and then the good job I have today. Don't be wrong, not being approved is not because of my income, it because I have never needed to borrow money before and thus have no credit history. Confirmed by the business manager in the dealer.

Fair play to you OP, getting through college is something very few can do these days.

My payment is 12.5% of my Net monthly, I'm 25 with no previous credit history or loans. I was approved based off of bank statement, savings statement and payslips. I had almost all of the deposit saved when I initially placed the order which might have helped as I was told this is vital for people without credit history.

My salary was actually a bit lower at the time of approval but I was also living at home at the time so was putting 90% into savings so I'm not sure if that made much difference.

Maybe go back in a few months time with a higher deposit if possible?

SteelyDanJalapeno

My approval too was based on pay slips, nothing to do with whether I borrowed money before.

Had 30% deposit in the form of trade in thou

DaveyDave

DaveyDave wrote: »

Hi all, dealer said to bring a bank draft for my deposit when collecting the car but I initially used card when placing the order. Can I use my card again for the remaining €5,500 or will I need to get a bank draft? Don't have time to call them right now as I'm heading to work...

Also would anyone know the answer to this?

GustavoFring

Most likely will want a bank draft for a hefty amount of money as the card will have fees associated with it.

CeilingFly

DaveyDave wrote: »

Also would anyone know the answer to this?

Your card, if its a debit card, will have a transaction limit of about €1500

R.O.R

EFT is the way to go.

You don't know have to go to the Bank and neither does the salesman to lodge it.

Lantus

Dealers don't allow cars to be paid on cards.

They don't want the fee to eat their margin and some cards offer consumer insurance which is a risk for them.

Draft, EFT, cash is your main options.

SSr0

CeilingFly wrote: »

Your card will have a transaction limit of about €1500

That's funny, I just transferred well over €10k in to my CU account via my Visa card last week.