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How did PCP work out in the end?

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Comments

  • #632
    Bass Reeves
    Registered Users, Registered Users 2 Posts: 20,516 ✭✭✭✭Bass Reeves


    Synode wrote: »
    0% finance. Brand new car every 3 years for very little extra. Yeah, we're mugs :pac:

    There is no such thing as a free supper

    Slava Ukrainii



  • #633
    DaveyDave
    Registered Users, Registered Users 2 Posts: 6,431 ✭✭✭DaveyDave


    Please, no more posts about how people think 0% is built into the cost of the car...


  • #634
    EndaHonesty
    Closed Accounts Posts: 1,531 ✭✭✭EndaHonesty


    ELM327 wrote: »
    The bank and the dealer. Two houses.


    So the person who bought the car they want, for the price they wanted to pay, using the payment method of their choice, doesn't win?


  • #635
    ELM327
    Registered Users, Registered Users 2 Posts: 19,121 ✭✭✭✭ELM327


    EndaHonesty wrote: »
    So the person who bought the car they want, for the price they wanted to pay, using the payment method of their choice, doesn't win?


    on pcp thats not the end of the transaction.


  • #636
    EndaHonesty
    Closed Accounts Posts: 1,531 ✭✭✭EndaHonesty


    ELM327 wrote: »
    on pcp thats not the end of the transaction.


    It depends on your point of view.


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  • #637
    ELM327
    Registered Users, Registered Users 2 Posts: 19,121 ✭✭✭✭ELM327


    EndaHonesty wrote: »
    It depends on your point of view.
    You can have all the points of view you want but after 3 years the balance is due. The transaction finishes then.
    If your car is only worth the GFMV then you need to add another few k to "go again" in PCP


  • #638
    JCN12
    Registered Users, Registered Users 2 Posts: 170 ✭✭JCN12


    DaveyDave wrote: »
    Imagine being that ignorant that you can't see the value of finance, even if you don't use it yourself. This has to be a wind up.

    It seems to me, that the users who have ushered concern over PCP's, can see the value of credit, but not on a depreciating asset by intrinsic nature, and the economic exposure it can lead too.

    A mortgage for your home, may likely yield good value in the main.

    Calling someone ignorant implies a lack of understanding and education on the accusers part.


  • #639
    Bass Reeves
    Registered Users, Registered Users 2 Posts: 20,516 ✭✭✭✭Bass Reeves


    DaveyDave wrote: »
    Please, no more posts about how people think 0% is built into the cost of the car...

    TBH it very hard to discuss how PCP works without factoring n how the credit side of it works

    Slava Ukrainii



  • #640
    Synode
    Closed Accounts Posts: 7,967 ✭✭✭Synode


    ELM327 wrote: »
    Very little extra in the monthlies, yes, but you're always topping up the deposit and the GFMV is increasing.


    Didn't have to put another cent in.


  • #641
    ELM327
    Registered Users, Registered Users 2 Posts: 19,121 ✭✭✭✭ELM327


    Synode wrote: »
    Didn't have to put another cent in.
    This time.
    If the bubble bursts and you dont have any "equity" you will next time


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  • #642
    Bass Reeves
    Registered Users, Registered Users 2 Posts: 20,516 ✭✭✭✭Bass Reeves


    EndaHonesty wrote: »
    So the person who bought the car they want, for the price they wanted to pay, using the payment method of their choice, doesn't win?

    They win sometimes like any roulette wheel but the house always we wins. The bank is the house and always wins. The dealer dose not necessarily always win as he carried the risk of the bubble bursting in a downturn like in 2008-2010.

    Slava Ukrainii



  • #643
    Synode
    Closed Accounts Posts: 7,967 ✭✭✭Synode


    ELM327 wrote: »
    This time.
    If the bubble bursts and you dont have any "equity" you will next time


    Yes, if. No crystal ball here but I certainly won't have an issue taking out a loan to repay the balloon payment if that happens. Things have got to be paid for.


  • #644
    EndaHonesty
    Closed Accounts Posts: 1,531 ✭✭✭EndaHonesty


    Bass Reeves wrote: »
    They win sometimes like any roulette wheel but the house always we wins. The bank is the house and always wins. The dealer dose not necessarily always win as he carried the risk of the bubble bursting in a downturn like in 2008-2010.


    It's not gambling, there's no roulette wheels involved, you do know we're talking about financing cars with PCP?! Not a trip to Vegas. :rolleyes:


  • #645
    CoBo55
    Registered Users, Registered Users 2 Posts: 10,097 ✭✭✭✭CoBo55


    ShadowHearth wrote: »
    Yes, sorry. I need to make it a bit more clear. I wanted to give as much details, but it got mashed up together, sorry.

    It was 6k deposit, which was 3k cash + 3k scrapage I got for my alfa.


    Edit: Jaysus feck all mighty. Just read the rest of the thread since my post. Wtf is wrong with some people. Its a thread where people can give real world examples not just on paper numbers of pcp purchases to help people understand it better. Not a "You are an idiot buying buying new car on finance, I drive my 99 Corrola and it actually printing me money instead of losing it!" thread. Every damn thread turns in to this **** lately.

    Exactly, the stupid negative for the sake of being negative posts should really be removed.


  • #646
    CoBo55
    Registered Users, Registered Users 2 Posts: 10,097 ✭✭✭✭CoBo55


    ELM327 wrote: »
    You can have all the points of view you want but after 3 years the balance is due. The transaction finishes then.
    If your car is only worth the GFMV then you need to add another few k to "go again" in PCP

    Yea we all know that. That's all been covered from the start of this thread. Have you anything new to offer?


  • #647
    CoBo55
    Registered Users, Registered Users 2 Posts: 10,097 ✭✭✭✭CoBo55


    JCN12 wrote: »
    It seems to me, that the users who have ushered concern over PCP's, can see the value of credit, but not on a depreciating asset by intrinsic nature, and the economic exposure it can lead too.

    A mortgage for your home, may likely yield good value in the main.

    Calling someone ignorant implies a lack of understanding and education on the accusers part.

    Try telling that load of rubbish to someone who bought a house in 2007.


  • #648
    CoBo55
    Registered Users, Registered Users 2 Posts: 10,097 ✭✭✭✭CoBo55


    This was a great thread until all the "hate everything you're all stupid numptys" turned up.


  • #649
    JCN12
    Registered Users, Registered Users 2 Posts: 170 ✭✭JCN12


    CoBo55 wrote: »
    Try telling that load of rubbish to someone who bought a house in 2007.

    Note how I said 'home' and not 'house'.

    A home for you and your family is one of the most fundamental things in life. If that means prudent credit useage, then so be it.

    Prudency wasn't all to common in 2007 unfortunately. Many Irish people suffered due to reckless credit useage.

    It was dubbed the credit bubble by economists. Many people during that time thought that they knew how to use credit, and work low interest rates.
    People who warned against it we're called begrudgers and ignorant, and told to keep quiet because it wasn't what the majority wanted to hear. Sound familiar?

    Reliance on finance can be a difficult mindset to break.


  • #650
    ELM327
    Registered Users, Registered Users 2 Posts: 19,121 ✭✭✭✭ELM327


    CoBo55 wrote: »
    Yea we all know that. That's all been covered from the start of this thread. Have you anything new to offer?
    Clearly some dont.

    Have you anything worthwhile to offer?


  • #651
    Lantus
    Registered Users, Registered Users 2 Posts: 2,873 ✭✭✭Lantus


    DaveyDave wrote: »
    Please, no more posts about how people think 0% is built into the cost of the car...

    yeah but it's safe zero resting on a flat earth overseen by the lizard people.


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  • #652
    CoBo55
    Registered Users, Registered Users 2 Posts: 10,097 ✭✭✭✭CoBo55


    ELM327 wrote: »
    Clearly some dont.

    Have you anything worthwhile to offer?

    Yep, driving my second car on pcp I haven’t been gobbled up by the pcp demons yet....


  • #653
    lalababa
    Registered Users, Registered Users 2 Posts: 1,762 ✭✭✭lalababa


    Sorry guys, probably been covered before...but what happens PCP cars in a recession? When used values fall dramatically. Is it in the contract your car is worth x amount after x years or is it a book or market value at any given moment. I'm asking this because of all the covid recession talk that is not showing up yet but maybe later.
    Also I'm trying to sell a 162 car, I bought 6 months ago at a very competitive price at the time, only to find out that I'll likely take a 30% hit.


  • #654
    bazz26
    Registered Users, Registered Users 2 Posts: 51,629 ✭✭✭✭bazz26


    Even if the bottom fell out of used car prices then you still owe the original GMFV or balloon payment at the end of year 3. However it would not make any sense to keep the car by paying off the GMFV/balloon payment if it's worth substantially less than that GMFV/balloon payment. Just hand it back, walk away and then buy that car from the dealer or a similar car for less than what you owed under the PCP deal.


  • #655
    lalababa
    Registered Users, Registered Users 2 Posts: 1,762 ✭✭✭lalababa


    bazz26 wrote: »
    Even if the bottom fell out of used car prices then you still owe the original GMFV or balloon payment at the end of year 3. However it would not make any sense to keep the car by paying off the GMFV/balloon payment if it's worth substantially less than that GMFV/balloon payment. Just hand it back, walk away and then buy that car from the dealer or a similar car for less than what you owed under the PCP deal.

    Who pays for the drop then...the fairy in the sky?


  • #656
    Bass Reeves
    Registered Users, Registered Users 2 Posts: 20,516 ✭✭✭✭Bass Reeves


    bazz26 wrote: »
    Even if the bottom fell out of used car prices then you still owe the original GMFV or balloon payment at the end of year 3. However it would not make any sense to keep the car by paying off the GMFV/balloon payment if it's worth substantially less than that GMFV/balloon payment. Just hand it back, walk away and then buy it or a similar car for less than what you owed under the PCP deal.

    This sounds great in theory. But you have to access a car at an unplanned time when tour finances may be under pressure anyway. It interesting that from about 2008-2011 the money in the car trade was in reselling cars in the 500-1500 euro bracket. These were the only cars a lot of people could afford due to having to access cars after there cars were repossessded/handed back.

    Slava Ukrainii



  • #657
    Bass Reeves
    Registered Users, Registered Users 2 Posts: 20,516 ✭✭✭✭Bass Reeves


    lalababa wrote: »
    Who pays for the drop then...the fairy in the sky?

    This is an known..unknown or is it an unknown...known. We have to get Donald Rumsfelt to explain that one, along with 0% finance on total car price

    because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don't know we don't know.


    He could not have explained it better

    Slava Ukrainii



  • #658
    J Mysterio
    Registered Users, Registered Users 2 Posts: 11,290 ✭✭✭✭J Mysterio


    I'm on PCP on a Skoda Octavia from new, that I love.

    Previous to this, I had two second hand cars, that I drove till they died, and both needed reasonably regular injections of cash for repairs and the insurance and tax was more expensive.

    I couldn't believe it when I switched my insurance from a 14 year old car to a brand new car and saved a few hundred.

    Road tax was cheaper as smaller, more efficient engine.

    No need to NCT for a few years.

    I considered a loan to help buy the car, but the interest was far too high. The dealership offered 0% interest and a trade in of 3k on a car that literally was broken down in my workplace car park, and had to be towed away.

    The Octavia was the previous model (which I prefer), and as the new model was coming out, I got a special edition (Soleil) for a very good price (same as retail for standard model) as they wanted to clear these out, and they wanted the sale.

    - half leather seats
    - heated front seats
    - auto lights
    - auto wipers
    - heated side view mirrors
    - leather steering wheel
    - chrome fixings
    - auto dim rear view mirror
    - tinted back and rear windows
    - LED headlights
    - headlight washers
    Etc.

    I know the Octavia isn't for everyone, but I absolutely love it. It's my first car from new and I treat it like a princess.

    I will be keeping the car.

    I put down a 5k downpayment and pay a very manageable repayment once a month, and then will have roughly 7k outstanding after three years.

    At that point, I can pay the 7k, or refinance it again into very manageable monthly repayments for a further period.

    I am the only one who has driven this car. I have added original Skoda parts and extras to the vehicle. I have a service record with Skoda.

    PCP allowed this to happen. As has been said previously, people complaining about PCP likely don't understand it.

    For me, I had the choice of another banger I would have high road tax and insurance and regular NCTs and likely high regular repair costs or... A brand new car.

    I await with baited breath criticisms of my car choice. I'm very happy with it.


  • #659
    bazz26
    Registered Users, Registered Users 2 Posts: 51,629 ✭✭✭✭bazz26


    lalababa wrote: »
    Who pays for the drop then...the fairy in the sky?

    The financial institution who loaned the money would take the hit however this would be worst case scenario. Like any lender there is always a small percentage of potential bad loans accounted for. It's very unlikely that the entire used car market would just collapse.
    Bass Reeves wrote: »
    This sounds great in theory. But you have to access a car at an unplanned time when tour finances may be under pressure anyway. It interesting that from about 2008-2011 the money in the car trade was in reselling cars in the 500-1500 euro bracket. These were the only cars a lot of people could afford due to having to access cars after there cars were repossessded/handed back.

    If your in financial dire straights at that point then handing back the car and walking away with nothing is the best solution. The halfway rule applies to PCP finance. Replace it with a cheap bangernomics car if you still rely on a car for transport.


  • #660
    Bass Reeves
    Registered Users, Registered Users 2 Posts: 20,516 ✭✭✭✭Bass Reeves


    bazz26 wrote: »
    The financial institution who loaned the money would take the hit however this would be worst case scenario. Like any lender there is always a small percentage of potential bad loans accounted for. It's very unlikely that the entire used car market would just collapse.

    It did in 2008-10. Second cars dropped about 25-40% in value depending on the market segment.


    bazz26 wrote: »
    If your in financial dire straights at that point then handing back the car and walking away with nothing is the best solution. The halfway rule applies to PCP finance. Replace it with a cheap bangernomics car if you still rely on a car for transport.

    Again sounds great in theory. But its workable if you intend to pick up a car that will maybe be doing smallish mileage. However if you are travelling a distance to work or maybe needing a people carrier then it may be harder to find a car that suits

    Slava Ukrainii



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  • #661
    bazz26
    Registered Users, Registered Users 2 Posts: 51,629 ✭✭✭✭bazz26


    Bass Reeves wrote: »
    It did in 2008-10. Second cars dropped about 25-40% in value depending on the market segment.

    How much of the 2008-10 new car market was PCP? PCP was still a pretty new concept to the masses back then. Either way you will always have a percentage of hand backs/repossessions even in the good times.

    Bass Reeves wrote: »
    Again sounds great in theory. But its workable if you intend to pick up a car that will maybe be doing smallish mileage. However if you are travelling a distance to work or maybe needing a people carrier then it may be harder to find a car that suits

    There are plenty of good cheap used cars out there for sale including people carriers that have been swapped for trendy SUV crossovers the last few years. You would be surprised with what people can make do with and get by in when it becomes necessary.

    We could probably predict whatabouteries all night.


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