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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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Mickiemcfist

Fair enough. But that's really that not much driving. Have you got it in sport suspension mode or something?

Peatys

Mickiemcfist wrote: »

Fair enough. But that's really that not much driving. Have you got it in sport suspension mode or something?

I tried all the suspension settings.. no real improvement.. i 6hrs a week isn't a lot, but having to do 3hrs over then straight into work has me wrecked since i got it. That's my main gripe..

Peatys

Wildly Boaring wrote: »

Yikes. I actually had a thread on something similar

https://touch.boards.ie/thread/2057963022/1/#post109628935

Get down to a Volvo garage and see if they've any interest sorting a deal, seems to be the gist of it.

Yeah, I'm going to ring the dealer and see if they'll consider a deal.. if they dont I'll swap with my wife's car.. 191 superb sportline 190bhp for spinning to school and tesco

bazz26

Lots of people trade up at the end of year 2 on PCP and dealers even contact them into thinking about it, so if you can let your wife drive it until then and then trade it for something else.

CoBo55

I've no problem with the seats in mine and my back wouldn't be great after many years doing over 1500km a week in various vehicles has taken its toll. The suspension is very soft making it quite lurchy on bad roads, I'd definitely select the DCC option if I was getting another.

DaveyDave

I was looking at trading my Golf in a few months ago, I had a little bit of equity despite being just shy of 18 months.

You could wait a year and see where you're at? Might not take a huge hit.

I haven't driven one but didn't like the suspension in them as a passenger, very floaty going over speed bumps for very little comfort gain.

GustavoFring

Peatys wrote: »

Seats are very uncomfortable for anything longer than an hour, and the suspension is terrible. It's like an old Lincoln town car when you go over speed humps bouncing away.

Hated that on mine too when I had it, they really are very boaty. You could look at swapping the springs?

I found it hard to get the right driving position too, was constantly tweaking it. Figured out the seats were rising slightly whenever the car was unlocked for some reason and not returning to their position (as low as possible). Eventually got something that worked though so maybe keep tweaking it?

You'll lose a packet offloading it now but if you're ok with that see what the dealer could do first.

talkingpj

Peatys wrote: »

Seats are very uncomfortable for anything longer than an hour, and the suspension is terrible. It's like an old Lincoln town car when you go over speed humps bouncing away.

Was thinking of getting the skoda superb sportsline on pcp. Thanks for the heads up.

Peatys

talkingpj wrote: »

Was thinking of getting the skoda superb sportsline on pcp. Thanks for the heads up.

Ask for an extended test drive

ELM327

DaveyDave wrote: »

Would the half rule not apply here? Being a 191 though I'd imagine it would be expensive. If it doesn't suit your needs, maybe go back to the dealer and work out a deal to get into something that suits you? You wouldn't be the first person to want to change so soon.

"If you have paid less than half of the PCP price of the car, you can give the car back, and you will only owe the difference between what you have paid, and half of the price of the car. You do not have to pay half the PCP price to the finance company before you end the agreement under the half rule. However, you will have to pay the difference between the payments you have made to date and half the PCP price."

It would sting having to pay 50% of a car in less than a year though, it'd be worth more than that when you hand it back after 3 years I'd imagine.

The way the majority of PCP deals are constructed, you will not have paid 50% until well into the 3rd year

DaveyDave

ELM327 wrote: »

The way the majority of PCP deals are constructed, you will not have paid 50% until well into the 3rd year

Doing some quick maths on a Sportline with an €11k deposit would mean month 22 or so before it's half paid, handing back now would very costly to have nothing out of it. Doesn't seem like the half rule is very viable for anyone wanting to get out early. Definitely seems trade is the best option.

ELM327

DaveyDave wrote: »

Doing some quick maths on a Sportline with an €11k deposit would mean month 22 or so before it's half paid, handing back now would very costly to have nothing out of it. Doesn't seem like the half rule is very viable for anyone wanting to get out early. Definitely seems trade is the best option.

Yes, the half rule really only works for HP

Toyotafanboi

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.

Had a look at this again last week as the balloon is due at the end of September.

162, 120k kms. Valued at €16k for "trade in" purposes.

€300 per month to refinance the balloon or €390 to go for a 192 R-Line diesel with no cash deposit input.

I think the brand and model has something to do with it, but the mileage allowance was well and truly shattered, 2x dealers didn't bat an eye over it and there was still ok equity in the car.

Paying the price now for going in with max deposit last time, in terms of the bump up in payments if we were to re-PCP, still unsure what to do, had went in with the intention of just re-financing as €9k ish is a bargain for 3 year old Golf. Fell into the PCP trap of hankering for a new car, sitting in one in the showroom etc.

Lantus

390 for new golf is still really good. Assume 300 is over 3 years? What's it over 2 to pay off quicker?

Wildly Boaring

What apr they offer?
Same gmfv?

Toyotafanboi

Yeah, that's the problem, 390 is still attractive for a new Golf. The 300 is over 3 years. APR is 0% on the new car and 5.9 on the refinancing I think. GMFV is higher on the new car, around 12k as opposed to 9k now.

Highline with the R-line kit and leather, good good car and decent spec. I think VW are offering a "purchase contribution" on diesels at the minute so that's helping the figures a bit too.

Hard to know. It's the uncertainty of the future really, ideally payments shouldn't be an issue but you never know I suppose. That's the decider really. At present it's a 9k debt costing 300 over 3 years, re-PCP ings would mean in the region off €22k debt and closer to €400 per month for another 3-6 years.

Casati

Toyotafanboi wrote: »

Yeah, that's the problem, 390 is still attractive for a new Golf. The 300 is over 3 years. APR is 0% on the new car and 5.9 on the refinancing I think. GMFV is higher on the new car, around 12k as opposed to 9k now.

Highline with the R-line kit and leather, good good car and decent spec. I think VW are offering a "purchase contribution" on diesels at the minute so that's helping the figures a bit too.

Hard to know. It's the uncertainty of the future really, ideally payments shouldn't be an issue but you never know I suppose. That's the decider really. At present it's a 9k debt costing 300 over 3 years, re-PCP ings would mean in the region off €22k debt and closer to €400 per month for another 3-6 years.

What model is yours- 1.6 Highline? Does the new one still have a five speed gearbox? Seems like a good deal, v decent trade-in allowance for an 2016 with 120km. They will prob have to change belt on that too

bazz26

My main concern would be that your buying a new model now that will be replaced with a brand new model at the end of this year or early next year. This will have a bearing on the value of equity you have in the car in 3 years time.

vintagevrs

Do you need or want a new car? Just because your current finance term is coming to an end in reality should have no bearing on that decision. If you don't have any reason to change then pay the balloon. In 6 months time or a couple of years time you fancy a change then you can still do that at anytime, with any dealer.

The way vw make it very straightforward is a way they shift cars.

For me, you're driving a perfectly fine and fresh car right now, and if you were not in a finance agreement that was ending soon you wouldn't be looking at cars. If the agreement was over 5 years I doubt you'd be looking now, but maybe I am wrong on that. Just my 2c

Lantus

bazz26 wrote: »

My main concern would be that your buying a new model now that will be replaced with a brand new model at the end of this year or early next year. This will have a bearing on the value of equity you have in the car in 3 years time.

Car models change nearly every 3 years or so. This loss of equity quoted by so many doesn't seem borne out in reality? Unless there is data to support?

hooch-85

The Mk7 Golf has been out nearly 7 years now, it did have a facelift to the 7.5 model but the Mk8 is a ground up new car.

bazz26

Lantus wrote: »

Car models change nearly every 3 years or so. This loss of equity quoted by so many doesn't seem borne out in reality? Unless there is data to support?

Nearly every 3 years? The average life cycle of most car models is usually about 5 years these days and the current Mk7 Golf has been on sale since the beginning of 2013. Of course a model change effects the amount of equity you have in it as its used market value becomes impacted by the new model. Personally I don't think it's a good idea to be buying a run out model on PCP if you plan to roll over again in 2 or 3 years time unless you get it at a very good knock down price now. If you plan to hold onto the car for many years or forever then equity down the road is not as much of a concern.

Toyotafanboi

Yeah, although I was aware a new model was on the way and is probably the reason they were throwing, R-Line, tech pack, leather etc at the car for seemingly little cost, I didn't really consider the implications a newer model would have on any potential repeat equity, especially now the GMFV is higher.

I completely agree vintage, it's still a fresh car for not much money to keep the existing car and that was my initial thought process and intention to just refinance at the end, hadn't really any intention of changing. At the same time I've no reason not to change and a change would be nice, which I suppose is how PCP suckers you.

Have a bit to think about it seems

CoBo55

Toyotafanboi wrote: »

Yeah, although I was aware a new model was on the way and is probably the reason they were throwing, R-Line, tech pack, leather etc at the car for seemingly little cost, I didn't really consider the implications a newer model would have on any potential repeat equity, especially now the GMFV is higher.

I completely agree vintage, it's still a fresh car for not much money to keep the existing car and that was my initial thought process and intention to just refinance at the end, hadn't really any intention of changing. At the same time I've no reason not to change and a change would be nice, which I suppose is how PCP suckers you.

Have a bit to think about it seems

I think thats a great deal, if you could throw them a few grand it would lower the payments a bit, as it stands I'd go for it as your 162 will be pushing up to or be past 200,000km in 3 years time with all the potential money problems looming.

CIP4

If the pictures are anything to go by the MK8 Golf looks wise is not great to say the least. So if that’s the case a late high spec Mk7.5 might hold up well value wise even in 3 years time. That crossed my mind when buying my Golf should I wait for Mk8 and I just thought I like the mk7.5 so why wait although to be fair the car I bought wasn’t brand new.

Also at the mileage your doing in a years time you will be hitting the territory where you are going beyond just routine servicing and maintenance costs will start to rise.

But at the same time I have never had PCP so not that up on it and since I have never actually kept a car anything close to 3 years don’t think it would work great for me.

Wildly Boaring

CoBo55 wrote: »

Toyotafanboi wrote: »

Yeah, although I was aware a new model was on the way and is probably the reason they were throwing, R-Line, tech pack, leather etc at the car for seemingly little cost, I didn't really consider the implications a newer model would have on any potential repeat equity, especially now the GMFV is higher.

I completely agree vintage, it's still a fresh car for not much money to keep the existing car and that was my initial thought process and intention to just refinance at the end, hadn't really any intention of changing. At the same time I've no reason not to change and a change would be nice, which I suppose is how PCP suckers you.

Have a bit to think about it seems

I think thats a great deal, if you could throw them a few grand it would lower the payments a bit, as it stands I'd go for it as your 162 will be pushing up to or be past 200,000km in 3 years time with all the potential money problems looming.

No point throwing in money to lower repayments, he's getting 0% interest pcp

GavMan

I don't really see the concern over residuals. It's a well spec'd R-Line. There is always going to be a reasonably buoyant market for that 2nd hand

CoBo55

Toyotafanboi wrote: »

Yeah, although I was aware a new model was on the way and is probably the reason they were throwing, R-Line, tech pack, leather etc at the car for seemingly little cost, I didn't really consider the implications a newer model would have on any potential repeat equity, especially now the GMFV is higher.

I completely agree vintage, it's still a fresh car for not much money to keep the existing car and that was my initial thought process and intention to just refinance at the end, hadn't really any intention of changing. At the same time I've no reason not to change and a change would be nice, which I suppose is how PCP suckers you.

Have a bit to think about it seems

Does the R line have led headlights or are the led's extra?

DaveyDave

GavMan wrote: »

I don't really see the concern over residuals. It's a well spec'd R-Line. There is always going to be a reasonably buoyant market for that 2nd hand

There's always value in a Golf. Equity might not be as good but I doubt it would take a huge hit. I don't think a new model will change the fact that the MK7.5 is still a nice, well specced car. The only difference is the dealer might give you a crap offer for it. I don't see them listing them for much less. Average Joe doesn't care about the MK8 if they're in the market for a second car Golf.

shanec1928

CoBo55 wrote: »

Does the R line have led headlights or are the led's extra?

extra unless they have stuck them on for the run off models