How did PCP work out in the end?

carsfan2 wrote: »

As someone who sells new and used cars, do you find people go in with their eyes open to big depreciation on new cars?
Years ago I remember meeting people that would change every year for minimal outlay on say a golf or Passat maybe 3/4K punts at the time. Never had to pay for services or tyres and got that new car vibe every year. Back then fewer cars were sold so I suppose a good second hand one year old car was holding value. I don’t think it’s financially feasible to do that nowadays.

That’s a good point about changing every year. I’d imagine on average a €40,000 car could be bought for €30,000 a year later. Not sure it makes sense to pay 10 grand every year for the pleasure of a new reg.

At present, a new Passat Highline (Elegance) is 41k.

Look up a 191 Passat Highline, you’d probably get one for 29/30k if you’re lucky.

Taking margins into account even getting 11k off someone for 1 year it wouldn’t make sense.

That said a 3 year change could be done for maybe 18k.

Honestly the day of the “cash” buyer trading up 2/3 year’s on that kinda stuff is long gone.

Polos maybe, but that’s it.

Mortgage shouldn’t matter whether it’s PCP or HP if you’re borrowing the same amount, they’re the same thing anyway.

The first part of your post is very confusing.

If you tell us what you’re buying it might help.

L-M wrote: »

Mortgage shouldn’t matter whether it’s PCP or HP if you’re borrowing the same amount, they’re the same thing anyway.

The first part of your post is very confusing.

If you tell us what you’re buying it might help.

Thanks sorry I cleaned up the para in my post! One option is Corolla Luna sport but am looking around that 28/30k mark.

mailspaining wrote: »

There's alot of knowledge and info in this thread so any thoughts on this would be welcome if you've a chance

One thing I'm looking at is Corolla Luna sport - sticker price €31,165. Have c. €5,000 deposit. Was looking at HP but chat with dealer makes me think PCP @ 3.9% might make more sense. I presume I can still negotiate the sticker price down?

Alternative might be HP or PCP on a 201 demo which has a €28,000 sticker price. I understand only offer PCP on demos.

So would I be better off with PCP on a new car or demo overall do you think?

Spoke to bank about mortgage before when I was paying €300 a month in a HP repayments, presume they don't car if it's HP or PCP once I show I can afford that amount per month?

The thing I like to do personally is to look at car/cars I am interested in, then when sitting down, I would ask then to print out in detail what they offer me with a break down of deposit, monthly payments, apr values, balloon payment. So in your case, I would ask for it on both cars. Its not hard for dealer to do it. Then take it it with you, go to a nice pub/cafe during the day, sit down and go through numbers without any pressure.
You can do maths on how much car will cost you in total. Important number to pay attention is not monthly payments, but over all cost. Newer car can have lower Apr or better deal, which will make new car same price or even cheaper in total.
When looking at hp vs pcp, you need to do a bit more thinking on what suits you better. If you don't plan on changing car in next 5 years and want straight forward traditional finance, then hp might suit you, just keep in mind, hp finance has usually bigger apr.
Pcp is handy if you not sure what you will do in 3 years, you might get an itch to change, or you will just keep the car, you will get better apr in general on new car with pcp. Pcp will have lower payments, which means you can open savings account and throw a few quid there each week for the next 3 years. When time comes, you can use that money to pay off car and own it ( at very least, you will have a good part of ballon saved up, and will need to refinance just a few grand ) or use that money for next cars deposit to keep same payments etc.

Whatever you do, don't make decision in front of salesman. Get your numbers printed out and have a good look at them at your own pace.

Sorry lads...slightly off topic. Im looking to trade in my PCP.

The PCP is with VW finance (Audi Car). If I take my car to be valued at a VW dealership for example. Am I right in thinking they can pull all the data of the contract, like term, price paid, GMVF, amount owed etc from the car reg? Does this put me at a disadvantage form the offset when talking about trade in value?

ShadowHearth wrote: »

So my turn to give my experience with pcp.

Bought brand new Seat ibiza cupra 171 for 24500eu in 2017, end of May.

3000eu scrapage for my 04 Alfa GT ( was worth less then a grand at best )
3000eu cash added
Deposit (6k eu)
Monthly 272eu
Balloon 8600 ish.
0% apr.

Plan was completely pay off car in 3 years, so as soon as I got the car I made a savings account and started putting 50eu a week, later I got wage increase and started putting 70eu instead.
Half way in got an itch to change to something with 4 doors as daughter started to get bigger. So plan was to get Leon cupra next. It was planned for March - April window of this year lol. We all know what happened.
So when locked down kicked in, Hotel I worked in shut down and 350eu became my income. By that time I had 10k eu in that pcp saving account, so stopped putting money there. Decided to pay off my car when time comes, then see later this year how's work situation and then start looking.

Today was the day VW Bank took last 8.6k payment and I officially own my car and its fully payed off. Had zero stress and was fully prepared for worst case scenario. Which ironically happened.
Already back to work since Monday too. So all back on track.

In the end, whats my opinion of pcp? Well, I fecking love it. Its my favourite way of buying cars now and if I can ill buy my next one on pcp again. It gives you a lot of freedom and options, if you undecided about next car or if you want to keep it or not.

It sounds like you fully understood what you were entering into and made the best use of the 0% interest. I have had a similar experience and am now on my 3rd PCP car. If at any stage I wasnt happy with a deal I was getting at trade in, I would have paid the balance owed and walked away with my car.

rustynutz wrote: »

It sounds like you fully understood what you were entering into and made the best use of the 0% interest. I have had a similar experience and am now on my 3rd PCP car. If at any stage I wasnt happy with a deal I was getting at trade in, I would have paid the balance owed and walked away with my car.

If there would be a car I want and I can afford, I would be on pcp again, instead of paying off balloon.
The thing is, i always advice to people who go on pcp to make that savings account and put away at least some money. Those savings put you in waaay better position in 3 years time. If you not happy with low ball trade in you getting, you can just pay it off and walk away. You are not at mercy of dealers and hoping they will cut you a better deal.

I still believe in the half value over 3 years unless you do something stupid like buy an end of life model or something like that.

Gael23 wrote: »

What I see as the biggest disadvantage of PCP is if you want or need trout before the end of the 3 years, that seems a little difficult to do.

That could be said for buying a new car in general, funding it through any type of loan.

DaveyDave wrote: »

But with a credit union loan or bank loan at least you OWN the car and can magically just get rid of it and clear your loan just like that without any issues selling and with PCP you're stuck rolling into new cars every 3 years and in the dealer's pocket with a lifetime if debt you can't pay off...

Have you read any of the thread?

Wildly Boaring wrote: »

Have you read any of the thread?

Yeah, I was just being sarcastic. I've seen too many posts recently (mostly on Reddit) where people act as if PCP is some permanent life long commitment and that somehow owning your car because you bought it with a loan is any safer. With a bank/credit union loan you still have to sell your car and hope you have enough to clear the loan. It's not like you just blink and you're out.

I'm all for PCP, it's a great option to roll over into a new car or or just buy outright with really low rates.

Whatever way you look it's finance at a cost to purchase a heavily depreciating asset. Brand new bog standard cars/crossovers Tuscon, Qashqais etc etc

Lol okay

Never mind the 50 percent depreciation after 3 years.. Which is c.15k but yes the brochure says "0 percent finance" and a signing up bonus

DaveyDave wrote: »

What's the alternative?

Are you seriously asking that question?