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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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CeilingFly

SSr0 wrote: »

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

That's unusual unless it was a credit card (which would have hefty fees of 1%-2% on the transaction) as almost all banks will have a daily transaction limit on debit cards and a single tarnsaction limit.

For AIB its 2500 daily limit and 1500 in one transaction unless you apply for the limit to be lifted and that may mean any fraudulent use above that limit would be your responsibility.

SSr0

CeilingFly wrote: »

That's unusual unless it was a credit card (which would have hefty fees of 1%-2% on the transaction) as almost all banks will have a daily transaction limit on debit cards and a single tarnsaction limit.

For AIB its 2500 daily limit and 1500 in one transaction unless you apply for the limit to be lifted and that may mean any fraudulent use above that limit would be your responsibility.

It was with a Visa Debit with Ulster Bank. I know there is a limit with cash withdrawals, but there seems to be no limit with card transactions from my account.

dil999

Best way to find out if they'll accept a card is to ask them. I would be surprised if they didn't. After that a bank transfer is the most convenient way, except you will have to wait until their accounts department confirms the payment goes through. This will be at worst next working day.

[Deleted User]

CeilingFly wrote: »

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

This is not true. My Ebs debut card had a 3k per day transaction limit but my BOI debit card is only limited to the funds in your account so if you have 10k in your account you can spend 10k on your debit card in one go. I'm even still on a student account (despite it being years since I was one) so my account is just bog standard with no allowances for high transactions. Sounds like your account is a pretty limited one.

Cash withdrawals are a different thing and are usually subject to daily limits.

DaveyDave

Thanks for the replies guys, seems there is a 2% charge for using card and also a daily limit of €2,500 for me. Bank draft it is!

CeilingFly

Andres Slimy Staircase wrote: »

This is not true. My Ebs debut card had a 3k per day transaction limit but my BOI debit card is only limited to the funds in your account so if you have 10k in your account you can spend 10k on your debit card in one go. I'm even still on a student account (despite it being years since I was one) so my account is just bog standard with no allowances for high transactions. Sounds like your account is a pretty limited one.

Cash withdrawals are a different thing and are usually subject to daily limits.

seems to depend on your bank.

AIB have a daily limit of 2500 and transaction limit of 1500. Different to cash withdrawal limit.

Ulster bank have a transaction limit of 1500 for retail transactions. Not sure if they have an overall limit.

ShadowHearth

TiltedBrain wrote: »

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

When I decided to pop in to Seat to find out more and if they even had the car I wanted, we sat down and applied for the finance. We didnt even had agreed deal or anything. Then we went to test drive a car, wasnt even the car I wanted, but was closesed to the real thing.
After we came back from test drive he checked his pc and told me that I was approved for finance. I only needed to bring my passport and prove of adress, thats it. I have to admit I was surprised. I knew my credit history is pretty good, but it was the biggest finance deal I applied for.

maidhc

CeilingFly wrote: »

seems to depend on your bank.

AIB have a daily limit of 2500 and transaction limit of 1500. Different to cash withdrawal limit.

Ulster bank have a transaction limit of 1500 for retail transactions. Not sure if they have an overall limit.

The business cards have a higher limit too. No idea what the amount is, but I have often paid 5k plus on a visa debit.

SteelyDanJalapeno

ShadowHearth wrote: »

When I decided to pop in to Seat to find out more and if they even had the car I wanted, we sat down and applied for the finance. We didnt even had agreed deal or anything. Then we went to test drive a car, wasnt even the car I wanted, but was closesed to the real thing.
After we came back from test drive he checked his pc and told me that I was approved for finance. I only needed to bring my passport and prove of adress, thats it. I have to admit I was surprised. I knew my credit history is pretty good, but it was the biggest finance deal I applied for.

Mine too was with SEAT, (VW Bank)

Micky 32

Same here, i was approved with no request for statements etc. Just ID and a utility bill. Then the next car i bought it was approved straight away once thedetails were put in. I could have told them i was making 10k a week. Vw never even asked for proof.

Doddles88

Micky 32 wrote: »

Same here, i was approved with no request for statements etc. Just ID and a utility bill. Then the next car i bought it was approved straight away once thedetails were put in. I could have told them i was making 10k a week. Vw never even asked for proof.

Beginning to think they just didn't like me haha

Pelvis

DaveyDave wrote: »

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

Ya wha??

DaveyDave

Pelvis wrote: »

Ya wha??

The vast majority of people I know can't even get into college, myself included, and the people I know who have gotten a degree have said it wasn't easy, so fair play to people with them. A few people I know dropped out. Could be different for you and the people you know though, just saying fair play for him for working hard for himself. Hopefully he gets a car sorted

DaveyDave

Got a letter from VW the other day after picking the car up last week, explaining the three options I have at the end of the 3 years. Didn't read as I already know but I must have a look and see how well it explains it for anyone who isn't too sure as it appears not a lot of people actually know.

It was good to see a letter being sent out after the excitement of picking up the car wears down.

jca

DaveyDave wrote: »

Got a letter from VW the other day after picking the car up last week, explaining the three options I have at the end of the 3 years. Didn't read as I already know but I must have a look and see how well it explains it for anyone who isn't too sure as it appears not a lot of people actually know.

It was good to see a letter being sent out after the excitement of picking up the car wears down.

I got the same letter, it makes it very clear, as you said it's a great idea.

TheShow

Micky 32 wrote: »

Same here, i was approved with no request for statements etc. Just ID and a utility bill. Then the next car i bought it was approved straight away once thedetails were put in. I could have told them i was making 10k a week. Vw never even asked for proof.

They get your details and run an ICB check. If that comes back with a decent bit of history that is clean, then you get approved. If you’ve had arrears in the past then you’ll most likely be declined. If you’ve a limited history, I.e. maybe just one or two facilities, then they might look for statements and/or pay slips. PCP is not governed by CPC therefore the lender is not strictly required to demonstrate that repayment capacity exists, unlike a bank who must document that repayment capacity has been clearly established. Mostly it’s just a check of your risk profile.

TheShow

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?

Maybe your bank statements didn’t demonstrate any capacity to take on a commitment. Do you have savings or a build up of credit funds in the account? If you spend all your money every month (which your entitled to do) and you have no ICB profile; then that’s not a strong risk profile, and I would agree with their decision. Save/build up some cash for c6 months then try again.

XsApollo

I got a seat Ibiza for my wife on finance from VW bank last year.

Simple process, few numbers on the computer and approved in an hour or 2.

A few months ago I was in Audi and was going to buy an A6.
Different ballgame all together.
Pay slips, bank account statements, and a lot more questions and was a day or 2 waiting to find out.
They were a lot more thorough with Audi, never the less I didn’t get the car.
Was refused finance.
Actually happy I was refused because I didn’t need the car :-D
But it was a savage looking 2016 A6 black edition ultra in Sepang blue.
So wanted it. -P

Anyway i think possibly ? VW bank treat their Marques differently with regards to finance.
That’s the impression I got anyway.

mickdw

Surely it must be down to the higher value car putting the figures too close to what they would deem dodgy territory. There is a significant cost difference in financing a next to new A6 versus a Seat Ibiza.

mickdw

XsApollo

Actually it was a 15 A6 not a 16 as my other post suggests.

Car was 39k I was putting near enough 30% down, the finance amount was under 30k.
The finance amount for the Ibiza was 17k.
Yes A bit of a difference :-P

But still the way they were handled were
Totally different.
I don’t think I gave any paper work for the Ibiza, just my bank account number.

And the dealer actually got me finance through another company for the full amount.

micks_address

Has anyone done any figures on whether it's better to change every one, two or three years with PCP?

Lantus

micks_address wrote:

Has anyone done any figures on whether it's better to change every one, two or three years with PCP?

Changing after 1 year isn't really feasible as I understand it as a new car devalues sharply in the first year and repayments won't of matched this. Of course you can do it but equity in the vehicle would likley be zero or even negative.

2 years is very feasible however.

mickdw

In general, the longer you leave it towards the end of the 3 years, the cheaper it should be overall however other factors come into play. For example it may be a good idea to trade up a bit early if doing so means you are trading in well before a new model arrives versus attempting to trade in your old model a few months later.

Doddles88

TheShow wrote: »

Maybe your bank statements didn’t demonstrate any capacity to take on a commitment. Do you have savings or a build up of credit funds in the account? If you spend all your money every month (which your entitled to do) and you have no ICB profile; then that’s not a strong risk profile, and I would agree with their decision. Save/build up some cash for c6 months then try again.

As I said before repayments are around 13% of my net income. I'm car mad so wouldn't really spend big on other things during the year except maybe a holiday in the summer. Bank statements clearly demonstrate my ability to comfortably make the repayments. You are correct though, the fact I have never been in debt before means I have no history at all with the ICB( I requested a credit history statement and it confirmed this). I also have the majority of the deposit saved in accounts with 3 months pay still to collect.
I haven't let it lie, I went direct to VW Bank and looked for them to reconsider their decision. They confirmed what the dealer had said that it is my lack of a credit history which makes me too much of a risk. They have since requested some further documents and I am hopeful/confident it will be resolved soon. Fingers Crossed!

micks_address

mickdw wrote: »

In general, the longer you leave it towards the end of the 3 years, the cheaper it should be overall however other factors come into play. For example it may be a good idea to trade up a bit early if doing so means you are trading in well before a new model arrives versus attempting to trade in your old model a few months later.

Yes I'm wondering when say the cost of new tyres and extra servicing costs might come into play. I'm doing about 28k km per year. The interest rate on the PCP also comes into play I suppose. I'm currency on 0% with vw bank with 3 services included.

dil999

micks_address wrote: »

Yes I'm wondering when say the cost of new tyres and extra servicing costs might come into play. I'm doing about 28k km per year. The interest rate on the PCP also comes into play I suppose. I'm currency on 0% with vw bank with 3 services included.

Its impossible to know when you get the best deal, but I would have to agree to wait at least 2 years. I traded mine in 2 years 4 months and I think I did okay.

I don't think the servicing costs will have any impact on it. I think you probably would have been better off paying for that seperately

The biggest issue you will have is mileage, you are doing over twice the average annual mileage. Bottom line you will get a trade in value based on mileage and condition, including tyres. It all depends on the market at the time.

micks_address

dil999 wrote: »

Its impossible to know when you get the best deal, but I would have to agree to wait at least 2 years. I traded mine in 2 years 4 months and I think I did okay.

I don't think the servicing costs will have any impact on it. I think you probably would have been better off paying for that seperately

The biggest issue you will have is mileage, you are doing over twice the average annual mileage. Bottom line you will get a trade in value based on mileage and condition, including tyres. It all depends on the market at the time.

Servicing deal was tied to 0%. Yeah I'm thinking maybe two years and see what sort of finance deals are in the offing

mickdw

There are very few who would trade in every 2 years in the times before pcp.
New car depreciation has not improved in recent times. It is still frightfully expensive to be buying new cars every 2 years. The costs are somewhat hidden but they are still there.
If you want a car every 2 years fair enough but it's unlikely to be the best value.

dil999

mickdw wrote: »

There are very few who would trade in every 2 years in the times before pcp.
New car depreciation has not improved in recent times. It is still frightfully expensive to be buying new cars every 2 years. The costs are somewhat hidden but they are still there.
If you want a car every 2 years fair enough but it's unlikely to be the best value.

I know loads of people who changed their car every two to three years before PCP. Myself included

The only way to have a new car every 2 to 3 years is to change your car every 2 to 3 years. Value is relative. The cost is approximately 20% of the selling price of the car per year. So for a 30K car it's 6K per year, €500 per month. for a 15K car its 3K per year or €250 per month. Hardly frighteningly expensive. Two cups of garage coffee every day is €150 per month.

Frighteningly expensive is relative to what you can afford.