PCP finance.

Blud · 19-01-2020 10:46AM

Anyone here able to give me some advice?

Looking at a new Skoda, 30k. Can put up to 15k down on it, am aware that this exceeds the max deposit on PCP. Plan at purchase would be to retain the car post 3 year period anyway.

Am I better going with

(1) 10k deposit plus PCP and then finance or purchase at end

Or

(2) 15k my cash upfront with car loan to cover balance over say 4 years (repayments work out similar to PCP monthly payments.

What are my downfalls with either approach?

Haven't a clue with this stuff.

Lantus · 19-01-2020 10:56AM

Blud wrote: »

Anyone here able to give me some advice?

Looking at a new Skoda, 30k. Can put up to 15k down on it, am aware that this exceeds the max deposit on PCP. Plan at purchase would be to retain the car post 3 year period anyway.

Am I better going with

(1) 10k deposit plus PCP and then finance or purchase at end

Or

(2) 15k my cash upfront with car loan to cover balance over say 4 years (repayments work out similar to PCP monthly payments.

What are my downfalls with either approach?

Haven't a clue with this stuff.

How are you able to put down 15k on pcp?
Which model?

Large deposit is best if keeping. If pcp then you are paying over 6 years and should be saving towards the gmfv.

In this case paying over 4 years on a normal loan like cu might be better. It's done and dusted and you will own from day 1.

Blud · 19-01-2020 10:59AM

Lantus wrote: »

How are you able to put down 15k on pcp?
Which model?

Large deposit is best if keeping. If pcp then you are paying over 6 years and should be saving towards the gmfv.

In this case paying over 4 years on a normal loan like cu might be better. It's done and dusted and you will own from day 1.

I'm not able put 15k down on PCP deposit - what I mean is I have 15k available but am aware only 10k or so of that can be used on PCP deposit.

Appreciate response

ddarcy · 19-01-2020 11:05AM

Blud wrote: »

I'm not able put 15k down on PCP deposit - what I mean is I have 15k available but am aware only 10k or so of that can be used on PCP deposit.

Appreciate response

Depending on the model they are running 0% interest. So id put 10% down now, pay the 0% interest over 3 years and then have the rest to pay off the final payment. I assume the final payment would be around 11k. So you would pay no interest on the car. I think the Octavia is 0pct (that seems what you’re looking at). You may have to spend a little more to get as better spec Model But might be worth looking into. Obviously you need to be able to meet the repayments monthly as well too.

CIP4 · 19-01-2020 11:08AM

Blud wrote: »

I'm not able put 15k down on PCP deposit - what I mean is I have 15k available but am aware only 10k or so of that can be used on PCP deposit.

Appreciate response

Just get the dealer to do you out costs for PCP with 30% deposit and HP Loan over 4 years borrowing 15k then compare the total cost of credit. It really depends on interest rates on both as to which will be cheaper. Although bare in mind at the end of the 3 year PCP if you don’t have the money saved to pay it off you will need to take out another loan which will also be a cost.

micks_address · 19-01-2020 12:48PM

Lantus wrote: »

Best of luck finding a car dealership that will take credit card.....

It's a loan so they deposit in your bank account.. why wouldn't a car dealership take a credit card? I've paid the last two deposits on my cars with credit card

L-M · 19-01-2020 12:59PM

micks_address wrote: »

It's a loan so they deposit in your bank account.. why wouldn't a car dealership take a credit card? I've paid the last two deposits on my cars with credit card

Because the cost of using a credit card for 20k could be a €200/€300 fee depending on the bank.

I would take credit card for a max of €1k.

Also just a poster about said about PCP and HP, contrary to popular belief PCP is HP. It’s the exact same thing with the same ts and cs as a Hire purchase agreement (because it is one) but you just sign up to owing a large sum as your final payment.

micks_address · 19-01-2020 01:14PM

L-M wrote: »

Because the cost of using a credit card for 20k could be a €200/€300 fee depending on the bank.

I would take credit card for a max of €1k.

Also just a poster about said about PCP and HP, contrary to popular belief PCP is HP. It’s the exact same thing with the same ts and cs as a Hire purchase agreement (because it is one) but you just sign up to owing a large sum as your final payment.

Paid 4k no bother last two cars with credit card

L-M · 19-01-2020 01:19PM

micks_address wrote: »

Paid 4k no bother last two cars with credit card

Depends on the garage. They must have been getting enough on the other end to cover the €40 euro fee, lol.

anplaya27 · 19-01-2020 01:50PM

All I can say is if you are seeking a mortgage, steer well clear. They will undercut what you can potentially take out due to finance.

Lantus · 19-01-2020 02:11PM

Blud wrote: »

I'm not able put 15k down on PCP deposit - what I mean is I have 15k available but am aware only 10k or so of that can be used on PCP deposit.

Appreciate response

Makes sense!!

Assuming your looking at a solei??

Because you have capital and its zero interest I would balance what you put in now vs the monthly and trying to save to pay off as much of the gmfv as possible as you will pay a few k interest on this.

5k deposit on an octavia at 29k is 370 a month but the dealer can run a few numbers for you or there is the online calculator.

DaveyDave · 19-01-2020 02:30PM

anplaya27 wrote: »

All I can say is if you are seeking a mortgage, steer well clear. They will undercut what you can potentially take out due to finance.

Depends on your financial situation. We're getting a 4.5x mortgage with my PCP. We'd get 5x if the car was cleared but that wouldn't be realistic as I'll always have some sort of car finance as I fancy something decent.

Anyone who sees themselves changing cars frequently or just wants something decent is going to have car finance for the foreseeable future. I personally wouldn't be cutting regular expenses for a bigger mortgage knowing I'll need money for a car again in the future.

anplaya27 · 19-01-2020 03:02PM

DaveyDave wrote: »

Depends on your financial situation. We're getting a 4.5x mortgage with my PCP. We'd get 5x if the car was cleared but that wouldn't be realistic as I'll always have some sort of car finance as I fancy something decent.

Anyone who sees themselves changing cars frequently or just wants something decent is going to have car finance for the foreseeable future. I personally wouldn't be cutting regular expenses for a bigger mortgage knowing I'll need money for a car again in the future.

So they under cut you too ? Well then. Imagine that. So basically if you get pcp you'll be undercut in anyway, it's still impacting on how much you can borrow. Rebuilding ireland scheme is very strict on pcp, especially amongst single first time buyers. I've heard of them undercutting by half or more the amount you can borrow even if healthily financially otherwise.

Toyotafanboi · 19-01-2020 03:12PM

Its not exclusive to PCP or a PCP only pitfall though really. Any outgoings or repayments will affect your ability to borrow for mortgage.

DaveyDave · 19-01-2020 03:41PM

anplaya27 wrote: »

So they under cut you too ? Well then. Imagine that. So basically if you get pcp you'll be undercut in anyway, it's still impacting on how much you can borrow. Rebuilding ireland scheme is very strict on pcp, especially amongst single first time buyers. I've heard of them undercutting by half or more the amount you can borrow even if healthily financially otherwise.

They didn't undercut me. I lowered my repayment affordability by having car finance. Undercutting would be giving me less than the guy who doesn't have a car loan, when we both have the same available cash.

It also technically doesn't effect the amount I can borrow because I can get 3.5x mortgage from any lender.

vintagevrs · 19-01-2020 06:40PM

Dave speaks a lot of sense. People getting rid of liabilities such as car loans just to present a better picture to a bank for the purposes of maximising the amount they can borrow are potentially going to over stretch themselves. If they are happy to continue with no car finance after the house purchase, that is fine. The bank reduced the amount they were willing to loan by 10% (from 5x to 4.5x) based on a car loan. Sounds reasonable to me.

Jjohnrockk · 06-05-2023 08:34PM

I booked a Volvo at 5.95 PCP few months ago. Now car is about to be delivered and volvo is offering 3.95%. Which rate will be valid?

bazz26 · 06-05-2023 10:31PM

Did you sign a contract with a specific rate?

How much was the car costing at the time @ 5.95% versus how much is it now costing @ 3.95%? You need to do the maths on both deals as car prices have nearly increased every 4 months or so in recent times so the cheaper rate could actually be dearer if the price of the car actually increased significantly since older higher rate.

It's very easy for people to just look at the headline percentage figures or monthly repayments and totally ignore what the car and credit is costing them over the term of the PCP deal. Then go with whichever is obviously the lowest over the 3 years. If the dealer won't honour the lowest option then you either accept it or tell them to keep the car.

Jjohnrockk · 07-05-2023 02:22PM

https://www.boards.ie/discussion/comment/120564127#Comment_120564127

Thanks for your response.

1. I had sent them details and later received a letter from BOI about PCP. No other paper was signed. BOI sent me a confirmation letter of approval.

2. Car price cannot be increased as it is at 60 and will lose Grant. It is assured by dealer. Car is in transit.

3. 3.5 PCP is an offer from volvo on their site. 5.95 was offer by Dealer via BOI.

He would gladly let me go as I'm sure he can get a new buyer for the car as a MY24 cost 67K now.

bazz26 · 07-05-2023 02:44PM

So if I'm understanding it correctly:

Car already ordered at 60k has 5.95% PCP and grant.

If you were to order it tomorrow or next month it would be 67k @ 3.95% PCP and no grant?

5.95% is still the better deal if the above is the case. The only ones really who can answer if Volvo will give you the same deal @ 3.95% instead of 5.95% is Volvo themselves but from the looks of it the only reason they are offering a lower PCP rate now is because the price of the car has gone up and it no longer qualifies for the grant meaning they would still get more money from you despite the headline lower interest rate.

Jjohnrockk · 07-05-2023 03:57PM

https://www.boards.ie/discussion/comment/120565600#Comment_120565600

Thanks. Understood. Fair call

PCP finance.

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