PCP finance.

SeanSouth wrote: »

I cant believe it that almost everyone here has missed the point about buying a car. The main point about buying a car is the car itself and the DEPRECIATION
of that car. The depreciation or cost to you on a standard VW Passat is around 450 per month, regardless of whether your monthly payment is 200 or 550 or whether you buy the car with cash or PCP or with a loan from a bank. If you can afford to justify spending 450 per month on a depreciating motor car then go ahead, otherwise dont, everything else is just noise. If you do high mileage, your depreciation figure will be much higher.

Also i have failed to understand people who need to have a new car every three years. A huge waste of money for a bit of feel good factor. Most new cars are good for 7/8 years. Everything else seems to be an exercise in keeping up with the Jones's.

Personally, I do about 25 000 miles per year. I usually buy a good 3 year old executive car in the UK with low mileage and keep it for 2 to three. years. The depreciation usuallly works out at less than a Nissan Micra. My wife has an 11 year old car which she loves.

Ive found dealers in Ireland (in general) to be a sorry bunch. Used car prices are completely overpriced and the choice of stock is never up to scratch.

They think everyone is dumb apparently.

You seem to have a bee in your bonnet about people buying new cars. I think everyone understands depreciation here. Depreciation applies to cars regardless of cash, loan, HP or PCP. Not sure why you felt the need to post here.

3 year trade in for a new car is an option with PCP. You don't have to replace. PCP actually affords some protection against dramatic depreciation, should the value of the car fall below the GFMV (the only scenario where it makes sense to walk away financially).

As to why people buy new cars, whether on PCP or not. Well maybe they just like a new car (like maybe you like branded clothes or an expensive whiskey or a foreign holiday). Maybe they can afford it regardless. Maybe they have had bad experiences with used cars, and having new cars always within a manufacturers warranty (with potentially lower insurance and tax and better fuel economy) gives a peace of mind that is worth it. Maybe they have a set monthly amount and are happy to budget for that.

So PCP is great for some, once researched and budgeted and understood properly.

SeanSouth wrote: »

I cant believe it that almost everyone here has missed the point about buying a car. The main point about buying a car is the car itself and the DEPRECIATION
of that car. The depreciation or cost to you on a standard VW Passat is around 450 per month, regardless of whether your monthly payment is 200 or 550 or whether you buy the car with cash or PCP or with a loan from a bank. If you can afford to justify spending 450 per month on a depreciating motor car then go ahead, otherwise dont, everything else is just noise. If you do high mileage, your depreciation figure will be much higher.

Also i have failed to understand people who need to have a new car every three years. A huge waste of money for a bit of feel good factor. Most new cars are good for 7/8 years. Everything else seems to be an exercise in keeping up with the Jones's.

Personally, I do about 25 000 miles per year. I usually buy a good 3 year old executive car in the UK with low mileage and keep it for 2 to three. years. The depreciation usuallly works out at less than a Nissan Micra. My wife has an 11 year old car which she loves.

Ive found dealers in Ireland (in general) to be a sorry bunch. Used car prices are completely overpriced and the choice of stock is never up to scratch.

They think everyone is dumb apparently.

People spend their money how they like, nobody is forcing you to do the same if you don't want to but then again begrudgery is a very common Irish qaulity too. And you know those two cars you and your wife drive now, somebody had to buy them when they were new too so that you can come on here to boast about how you saved money buying them second hand.

Had a look at trading in the Golf the other week. 162 1.6 diesel, 85k kms so has shattered the PCP mileage allowance.

Roughly speaking went in with max deposit in 162, €9k ish and have been paying €250pm since then, so again roughly speaking we are 50% of the way to owning the car having paid €14250 off the car.

Trade in value allowed was €18750, so €4500 equity which is quite good at this point IMO. To get the exact same car again continuing with PCP using just the equity as deposit was around €460 per month but the price of a comparable Golf has gone up by the guts of €3k.

Toyotafanboi wrote: »

Had a look at trading in the Golf the other week. 162 1.6 diesel, 85k kms so has shattered the PCP mileage allowance.

Roughly speaking went in with max deposit in 162, €9k ish and have been paying €250pm since then, so again roughly speaking we are 50% of the way to owning the car having paid €14250 off the car.

Trade in value allowed was €18750, so €4500 equity which is quite good at this point IMO. To get the exact same car again continuing with PCP using just the equity as deposit was around €460 per month but the price of a comparable Golf has gone up by the guts of €3k.

You will surely only gain by keeping to end of term (unless you think the mileage is going to be too much.
Are there not contributions from vw to at least cancel out the price increase?
A golf should cost about 400 per month in depreciation for the first 3 years so Id not be inclined to pay 460 for one.

893bet wrote: »

Can I buy a car on PCP and then sell (well "sign" as no money will change hands) it straight to my wife? Obviously I will responsible for the debt still.

No, ownership remains with the credit provider.

893bet wrote: »

Can I buy a car on PCP and then sell (well "sign" as no money will change hands) it straight to my wife? Obviously I will responsible for the debt still.

Can be done, but will add an extra owner to car though.

If she's going to be the main driver, doesn't she have to be the registered owner for insurance purposes?

Just to share my latest experience, my gf got a 161 Clio on PCP 2 years ago for about 16k I think.
We both travel in the same direction for work so there's really no need for 2 cars, so we talked with Renault on returning it as its hardly ever used (15000km in over 2 years), outstanding finance is about 9600.
Renault inspected it and offered 8k to take it back early, effectively she would have needed to pay about 1600 to hand it back, their reasoning which is sound imo was that they have ample stock of this model right now and they don't need it, however he did say they would be selling it for about 13500.

We've opted against returning, gonna pay off the finance myself and sell it privately.

Toyotafanboi wrote: »

I'd say they were low balling you there. They aren't seeing near a mark up of 5.5k on any other 161 Clio they have on site.

Yeah definitely just didnt wanna take it, but they do have Clios up at that price, an less but more mileage, same model :

http://www.kearys.ie/group/pre-owned/renault/clio/2016-black-dyn-nav---stunning-7450992.html

SteelyDanJalapeno wrote:

Just to share my latest experience, my gf got a 161 Clio on PCP 2 years ago for about 16k I think. We both travel in the same direction for work so there's really no need for 2 cars, so we talked with Renault on returning it as its hardly ever used (15000km in over 2 years), outstanding finance is about 9600. Renault inspected it and offered 8k to take it back early, effectively she would have needed to pay about 1600 to hand it back, their reasoning which is sound imo was that they have ample stock of this model right now and they don't need it, however he did say they would be selling it for about 13500.

Well you still need to pay any outstanding finance so say 300 per month for 6 months that's 1500 which is where they are getting that. Basically your just handing the car back. No equity which is dealer's right.

If you sell private you will need to clear the gmfv first via a loan so bear that in mind. Still better than dealers option.

I dont think you'll need a loan to try and sell it private. Put it up for sale. If a genuine seller is interested they should have no issue paying vw finance the outstanding amount and then any extra owed to you above that. If you get no interest in it at least you know you tried and go the dealer route.

Cyrus wrote: »

can i ask why you would bother?

Insurance as main driver and owner. Not sure if that actually has an impact.

(Plus I need to buy her something nice so I can keep buying shiny things for my left wrist!).

893bet wrote: »

If that's possible then that would be even better. Avoid the extra owner as I know some buyers value that.

I’ve done it myself.

P.c.p. would somewhat impact your mortgage application.

If you have a financial commitment monthly of a couple of hundred Euro a month they'll deduct that from your ability to repay a mortgage loan.

Plus, at expiry of the p.c.p. term you'll have a balloon to finance.

If you are looking to trade up in 12-18 months, I'd say financially you'd be better finding a good used car and trading outright.

Your net income then isn't dragged down by an ongoing p.c.p. commitment do the bank should be willing to lend you more.

Also, if you do p.c.p on a new car, assuming the future value in 3years is c. 50% of the new list price, you will have lost that much in depreciation in that term. If a house is your priority you may be better buying something that's already say, 3years old at 50% of the new price. Granted you have an older car, but as you can probably sell say 3 years down the line for 20% of the new price, you will have a lower total cost of ownership.

If your focus is a house, I would avoid entering into other term loans or finance, particularly on a new and heavily depreciating asset.

The bank wants your cash every month without fail so the fewer other parties taking a bite (p.c.p. or otherwise) the better comfort they have in ability to repay and the more likely the loan/bigger loan to move.

I'm sure others will be along to suggest specific models for your budget but maybe narrow it down, do you want / loathe an s.u.v.?

Do you have kids, ages, car seats required?