How did PCP work out in the end?

CoBo55 · 08-07-2020 03:52PM

J Mysterio wrote: »

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.

Spot on, I'm a great fan of the skodas in general. It's a pity they didn't put climate control in the soleil model otherwise it's a great spec.

Water2626262 · 08-07-2020 09:19PM

lalababa wrote: »

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

Depends on the brand. If the dealer can’t sell the returned car and clear the balloon then it either falls on the dealer themselves, distributor or the finance house. E.g. some brands have the dealer take responsibility for the gmfv themselves while others like VW bank have the finance house take the risk.

Wildly Boaring · 08-07-2020 10:23PM

Bit of advice/experience people.

Say if ahem, ones significant other had a tip in a PCP car.

What is the outcome insurance wise?

18 month old car.
Write-off

My educated guess
The insurers pay out the value if the car
You must pay VW bank the outstanding.

You're left with remaining to sort your new car.

Am I missing anything?
How do I /they work out current value?

L-M · 08-07-2020 10:33PM

Wildly Boaring wrote: »

Bit of advice/experience people.

Say if ahem, ones significant other had a tip in a PCP car.

What is the outcome insurance wise?

18 month old car.
Write-off

My educated guess
The insurers pay out the value if the car
You must pay VW bank the outstanding.

You're left with remaining to sort your new car.

Am I missing anything?
How do I /they work out current value?

That’s exactly what will happen.

If I were you (And you wanted to replace the car) I would get onto your dealer and tell them the story, also tell them what you’re being offered for your car. If the dealer is any good they should be able to fight your case and get you more for you car, and you might be able to start a new PCP again with your equity.

mickdw · 08-07-2020 11:22PM

Wildly Boaring wrote: »

Bit of advice/experience people.

Say if ahem, ones significant other had a tip in a PCP car.

What is the outcome insurance wise?

18 month old car.
Write-off

My educated guess
The insurers pay out the value if the car
You must pay VW bank the outstanding.

You're left with remaining to sort your new car.

Am I missing anything?
How do I /they work out current value?

They will offer you a crap figure. You need to fight your corner and as LM says, get help from dealer.
If you had gap i surance or return to invoice insurance, the car i surer would pay out market value and the return to invoice insurer would pay out the difference between that and new cost.
I assume you dont have that insurance though.

Wildly Boaring · 09-07-2020 07:09AM

mickdw wrote: »

They will offer you a crap figure. You need to fight your corner and as LM says, get help from dealer.
If you had gap i surance or return to invoice insurance, the car i surer would pay out market value and the return to invoice insurer would pay out the difference between that and new cost.
I assume you dont have that insurance though.

Nativity here (on my behalf).
Why you reckon they'll offer a terrible price?
Or how could they justify it?
Only 3 same care on DD today. All with €500 of eachother.

Gap insurance nope. Shoulda woulda coulda.

hooch-85 · 09-07-2020 09:52AM

My spiel, my wife had a 2010 Ibiza 1.4 TDi with 200kms on it when the engine went kaput and was beyond repair in 2018

We looked into a new Ibiza as there was some good deals at the time. Ended up buying a new Ibiza FR 1.0 TSi in March '18. It's been a great car and has cost her nothing except two front tyres - free servicing was included. Went in to the local dealer in June to inquire about the new Leon and the Ateca FR caught both our attention really. We are expecting our first child so extra space is needed. In short we put down a deposit and are collecting it tomorrow. My wife had exceeded the mileage allowance on the PCP (was commuting 100kms a day), Ibiza has 62k on it now and wasn't due back until March next year but the numbers made sense for us now. We have both saved since COVID and she will be WFH for the foreseeable future and will be on mat leave for most of the first year of ownership so the uplift in monthly payments will be offset by fuel and toll savings.

In summary:
Cost of Ibiza FR in 2018 - €22k
Dealer contribution €2k
Scrappage €2k
Cash deposit €2k
Amount financed €16k.
1.9% repayments of €253 a month
Trade in value €13.5k
Settlement €10k - €3.5k equity carried

Ateca FR 1.5 TSi Metallic Red
Cost including delivery and metallic €36k
Equity €3.5k
Cash deposit €3.5k
0% interest
Repayments €419.90
GMFV €13,846

So in short we got back €13.5k on a car which cost us €18k, that's 75% and in my view is very good considering we were above the mileage allowance on the PCP but on the other hand there are very little new shape Ibiza's in FR trim so i am sure it will be an easy sale.

The GMFV is very low on the Ateca, so there should be minimum 7k equity to change up in 3 years should we take the fancy, 171 Ateca FRs are making 22k+ now.

ELM327 · 09-07-2020 09:57AM

Your monthlies have doubled though.

mickdw · 09-07-2020 10:02AM

Wildly Boaring wrote: »

Nativity here (on my behalf).
Why you reckon they'll offer a terrible price?
Or how could they justify it?
Only 3 same care on DD today. All with €500 of eachother.

Gap insurance nope. Shoulda woulda coulda.

Well its their business to save money. All looks abit silly then when you see what they give out on dodgy injury cases.
Any recent cases ive seen, they were offering the lower end of donedeal pricing.
Owners then had to send on examples of cars at higher pricing and also sent on examples asking the low price and showed that they were high mile or low spec etc.
With an 18 month old car, you need to be getting a figure that allows you walk into main dealer and buy the same car in same spec at same age.

GavMan · 09-07-2020 10:04AM

ELM327 wrote: »

Your monthlies have doubled though.

They haven't doubled and they've gone up 2 classes of car from an Ibiza to an Ateca FR. So of course you're going to pay more. Just like you would if this was HP or any other product.

The J Stands for Jay · 09-07-2020 10:07AM

lalababa wrote: »

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

The PCP contract is essentially a lease with a few options thrown in at the end. The payments up to that point have been to lease the vehicle. There is an option then to buy it at the end of the lease term for a fixed amount. If that amount is not attractive, the vehicle is handed back and the contract has been fulfilled.

JCN12 · 09-07-2020 10:16AM

hooch-85 wrote: »

My spiel, my wife had a 2010 Ibiza 1.4 TDi with 200kms on it when the engine went kaput and was beyond repair in 2018

We looked into a new Ibiza as there was some good deals at the time. Ended up buying a new Ibiza FR 1.0 TSi in March '18. It's been a great car and has cost her nothing except two front tyres - free servicing was included. Went in to the local dealer in June to inquire about the new Leon and the Ateca FR caught both our attention really. We are expecting our first child so extra space is needed. In short we put down a deposit and are collecting it tomorrow. My wife had exceeded the mileage allowance on the PCP (was commuting 100kms a day), Ibiza has 62k on it now and wasn't due back until March next year but the numbers made sense for us now. We have both saved since COVID and she will be WFH for the foreseeable future and will be on mat leave for most of the first year of ownership so the uplift in monthly payments will be offset by fuel and toll savings.

In summary:
Cost of Ibiza FR in 2018 - €22k
Dealer contribution €2k
Scrappage €2k
Cash deposit €2k
Amount financed €16k.
1.9% repayments of €253 a month
Trade in value €13.5k
Settlement €10k - €3.5k equity carried

Ateca FR 1.5 TSi Metallic Red
Cost including delivery and metallic €36k
Equity €3.5k
Cash deposit €3.5k
0% interest
Repayments €419.90
GMFV €13,846

So in short we got back €13.5k on a car which cost us €18k, that's 75% and in my view is very good considering we were above the mileage allowance on the PCP but on the other hand there are very little new shape Ibiza's in FR trim so i am sure it will be an easy sale.

The GMFV is very low on the Ateca, so there should be minimum 7k equity to change up in 3 years should we take the fancy, 171 Ateca FRs are making 22k+ now.

So basically your saying that your wife has spent 5k for privledge of leasing a car for two years, and still doesnt technically own a car?

That it now won't be used for commuting to work, and your monthly repayments have almost doubled because you needed a bigger car than the Ibiza?

The logic escapes me.

09-07-2020 10:20AM

J Mysterio wrote: »

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

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.

wouldnt dare criticise your choice of car- each to their own and well done.

I’d definitely go the PCP route except for one thing- the sort of cars I like to drive cost a fortune when new so PCP is just out of the question for me. So I buy big luxury cars secondhand and yes, spend more on fuel tax, insurance and servicing. But I’m probably spending similar money annually to you as I’ve no car loan and my lump of merc only worth a few grand so no depreciation to speak of.
We’re both happy driving what we like. The one fear I have around PCP has just been highlighted by another poster- a crash. I know chances are low, given my clean enough record over many years but still, it would worry me,

hooch-85 · 09-07-2020 10:27AM

JCN12 wrote: »

So basically your saying that your wife has spent 5k for privledge of leasing a car for two years, and still doesnt technically own a car?

That it now won't be used for commuting to work, and your monthly repayments have almost doubled because you needed a bigger car than the Ibiza?

The logic escapes me.

As said above they haven't doubled, our salaries have also increased in the mean time so it's well within our means. This thread is to give people an idea of what it costs to own a car on PCP not to bash people's reasons for buying a new car. Yes we could have spent 5k on an older car and owned it outright but maybe we prefer having a new warrantied car with all the top tech and safely features, especially when a new born is on the way?

I have a Golf R myself, which i bought through a traditional bank loan and some savings, i'll own it in three more years but it costs me more to repay so i don't know if that's a better option, pay interest on a loan to own a car or pay to "lease" a car through PCP. I plan on keeping it long term so that's why i bought it through a traditional loan.

650Ginge · 09-07-2020 10:40AM

J Mysterio wrote: »

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.

7k residual after 3 years...

hooch-85 · 09-07-2020 10:43AM

€7k is the minimum future value at the end of the term, my guess is he will have an extra €4-5k on top of that in a trade in to use as equity

650Ginge · 09-07-2020 10:50AM

hooch-85 wrote: »

€7k is the minimum future value at the end of the term, my guess is he will have an extra €4-5k on top of that in a trade in to use as equity

Yeah I understand that. But setting the gmfv at that rate increases the payments attributable to capital to provide a huge safeguard to the lender.

grayzer75 · 09-07-2020 10:51AM

I've been on VW PCP's for almost 18 years now and not a problem, change the car every 3 years or so and no worries about MOT, servicing (always include the service plan) or tax for the first year (every new car in the north must be taxed before it leaves the dealership).

You just have to get your head around the fact that you will never own the car you're driving unless you pay the balloon payment at the end of you're agreement.

If you are thinking of getting a car on PCP wait until the last quarter of the year when the dealerships are struggling for sales - this is when you pick up the best offers e.g. deposit contributions, interest rates, car specs / models, service plans, etc. Doing it in the last quarter won't matter if you are planning on changing every 3 or 4 years. It's also keeping an eye out for when a new model is coming out and get the last of the old models - you'll get serious deals on great spec motors.

bennyc · 09-07-2020 11:05AM

ELM327 wrote: »

Your monthlies have doubled though.

wouldn't agree with that statement as its pretty relative to the increase in the car.
22K is 61% of 36K the % increase of the monthly is 65%, the 4% offset would probably be the initial deposit for the cheaper car.

CoBo55 · 09-07-2020 11:25AM

650Ginge wrote: »

7k residual after 3 years...

7k owed after 3 years ...

Mickiemcfist · 09-07-2020 12:36PM

JCN12 wrote: »

So basically your saying that your wife has spent 5k for privledge of leasing a car for two years, and still doesnt technically own a car?

That it now won't be used for commuting to work, and your monthly repayments have almost doubled because you needed a bigger car than the Ibiza?

The logic escapes me.

You're in the motors forum not the investments forum, I have 3 cars & an annual combined road tax bill of just under 3 grand. You might think there's no logic but for me they're a worthwhile expense. This thread is to inform others of the real cost/experience of PCP, not to critique the choices of car.

Do you stand outside bars every night saying "you spent 100 tonight, you could have drank at home for 20, the logic escapes me"?

JCN12 · 09-07-2020 12:50PM

Mickiemcfist wrote: »

You're in the motors forum not the investments forum, I have 3 cars & an annual combined road tax bill of just under 3 grand. You might think there's no logic but for me they're a worthwhile expense. This thread is to inform others of the real cost/experience of PCP, not to critique the choices of car.

Do you stand outside bars every night saying "you spent 100 tonight, you could have drank at home for 20, the logic escapes me"?

This is getting childish. Most people don't finance their alcohol consumption over several years in a single financial product.

I didn't comment on particular choice of car. Brand preference is quite a personal decision.

I was proposing a healthy debate on the real cost implications of PCP's, and consequences of such.

DaveyDave · 09-07-2020 01:05PM

If you bought a car with a bank loan you're still paying for the privilege to use it...

Water2626262 · 09-07-2020 01:13PM

650Ginge wrote: »

Yeah I understand that. But setting the gmfv at that rate increases the payments attributable to capital to provide a huge safeguard to the lender.

Saves him from having to fork out thousands to go again on pcp and protects the dealer. Seems logical to me.

EndaHonesty · 09-07-2020 01:19PM

Dropping 20,000 savings on a secondhand car and keeping it for 3 years, is still 555 euro per month. (20000/36 = 555)

I have a brand new 42,000 car for 3 years, for 555 euros per month. And I still have my 20,000 in the bank.
It's my second PCP car and my only deposit was 4k on the first one.

Cars are expensive, no matter what way you finance them. Wanting to own an depreciating asset by depleting your savings is mad, IMO.

Lantus · 09-07-2020 05:42PM

Owning a car? Very few people would buy a car without some loan product. No one I know.

And by the time you actually own it it's value is heading into the gutter.

PCP has worked well for me. Its a super easy product to manage and approve. Manageable monthlys. I am keeping both cars for longer than 3 years. Almost paid off 1 and 2 years to go on other. May get a 2nd hand superb next.

Wildly Boaring · 09-07-2020 06:04PM

[Deleted User] wrote: »

wouldnt dare criticise your choice of car- each to their own and well done.

I’d definitely go the PCP route except for one thing- the sort of cars I like to drive cost a fortune when new so PCP is just out of the question for me. So I buy big luxury cars secondhand and yes, spend more on fuel tax, insurance and servicing. But I’m probably spending similar money annually to you as I’ve no car loan and my lump of merc only worth a few grand so no depreciation to speak of.
We’re both happy driving what we like. The one fear I have around PCP has just been highlighted by another poster- a crash. I know chances are low, given my clean enough record over many years but still, it would worry me,

We'll see how it goes and report back

Cannot see why we'll be any worse off with a write off whilst on PCP than a cash purchase.

Now if he car has serious damage and no write off then we'll be paying the lump after 3 and keeping it. But be stuck with it regardless of financing if that were the case.

steirishrover · 09-07-2020 06:23PM

Hi guys a quick question.. just about to go finance on a car.. everything has been approved but their asking for PPS number. Is this standard practice now or is it dodgy? Never heard of this before

Senature · 09-07-2020 06:43PM

EndaHonesty wrote: »

Dropping 20,000 savings on a secondhand car and keeping it for 3 years, is still 555 euro per month. (20000/36 = 555)

I have a brand new 42,000 car for 3 years, for 555 euros per month. And I still have my 20,000 in the bank.
It's my second PCP car and my only deposit was 4k on the first one.

Cars are expensive, no matter what way you finance them. Wanting to own an depreciating asset by depleting your savings is mad, IMO.

After 3 years the second hand car can be sold on for approx 12k give or take, so it has cost 8k over 3 years, which is €222 per month. Am I missing something? Not saying this to be negative about PCP, just trying to establish how the comparison stacks up here.

Bass Reeves · 09-07-2020 06:44PM

steirishrover wrote: »

Hi guys a quick question.. just about to go finance on a car.. everything has been approved but their asking for PPS number. Is this standard practice now or is it dodgy? Never heard of this before

Any banking products now need s pps

How did PCP work out in the end?

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