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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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[Deleted User]

noelf wrote: »

I got a E1800 discount along with my trade in on a pcp of 1.9 apr interest is E758 over 3 years on a golf highline metallic paint adaptive cruise control parking sensors front and back for E300 per month plus free servicing up to and including 45000 km

So that's 300 pm with a total mileage of 45000 Kms ?

15,000 per year.

Would cost me way more with 100,000 Kms , total, I think if you do low enough miles then pcp is attractive.

noelf

[Deleted User] wrote: »

So that's 300 pm with a total mileage of 45000 Kms ?

15,000 per year.

Would cost me way more with 100,000 Kms , total, I think if you do low enough miles then pcp is attractive.

There is no mileage limit Madlad .. three free services at 15k 30k and 45k

valdigre

How does car Insurance work with PCP?
I am trying to get a quote but essentially I am trying to insure a car which is not mine?

I will be insuring a car with me being the main driver but not being the owner? Do dealerships offer car insurance or how does it work?

[Deleted User]

noelf wrote: »

There is no mileage limit Madlad .. three free services at 15k 30k and 45k

Ah right now I get ye, but what's the limit on your mileage for the contract per year ?

noelf

[Deleted User] wrote: »

Ah right now I get ye, but what's the limit on your mileage for the contract per year ?

I have no mileage limit

mileage limit only comes into play if your handing car back after the 3 years ... and next to nobody does that

[Deleted User]

There is no limit if you're keeping it until it's paid off, it's yours, then what's the point in pcp ?

valdigre

[Deleted User] wrote: »

There is no limit if you're keeping it until it's paid off, it's yours, then what's the point in pcp ?

There must be a point, low monthly payments for you is one thing.

Anyway, PCP in Renault would result in cost od credit od around 1.6k and HP would be around 2k. Lower, than 3k for personal loan, especially PCP. Car value is 17k.

Best option AS it seems

[Deleted User]

Interest can be lower but you got to pay it off in 3 years, so you'll need a fair size deposit and the balloon at the end.

But at least you don't have a mileage limit and can opt for the lowest payment.

September1

Deleted User wrote: »

There is no limit if you're keeping it until it's paid off, it's yours, then what's the point in pcp ?

It creates an option for you to give it back so even if costs are same as loan you would be better. PCP works as a protection against unexpected depreciation, if for example we suddenly run out of oil and value of car drops to zero then Renault still has to take it. Of course they would not agree to PCP if risk was anything higher than nearly impossible, but still it is a free insurance.

marc1

Re. Insurance, it is just like any other car.

Re. Total cost of credit as mad lad said, make sure you compare this on an equal loan length... Otherwise they are unfair comparisons.

HP will nearly always be cheaper than a personal loan because the lender can seize the car if you default... They have a guarantee, making it less risky for them. I don't believe there is any point ever getting a personal loan for a car.

The point of PCP is definitely that you can (but don't have to) hand the car back at the end.

If you are offered a PCP deal that is more cost (lower total cost of credit) efficient than the HP deal, just save up the baloon payment over the term and then pay it off at the end. (You also get to keep the interst you earned :-)) needs a bit of discipline but often worth it.

BigEejit

There is a guy I work with in London who had a BMW 325d touring on PCP and they absolutely screwed him on marks on the car at the end of 3 years. It had two dings on front passenger side door and a couple of stone chips (on on bumper and one on bonnet) and a 6 inch light scratch (not through to undercoat) and they said that was 1600 pounds of damage .... There was no damage to alloys, windscreen, wing mirrors, bumpers (aside from the chip) or upholstery.

I bought my latest honda accord (2.2 idtec es gt with sat nav and some other toys) from cargiant in Feb. It had 43k miles and was 3 and 3/4 years old (last service/MOT was in August last year and the car had only done 1.5k miles more than what was on the service book/MOT so it had likely not been driven much since Sept last year). I got it for 10,200 pounds and on the Honda website it is showing new as 28,000. Thats fairly eye watering depreciation for an ordinary car (finance company probably sold it to cargiant for 8K)

noelf

Just noticed my local vw dealer is showing a finance rate of 1.32 apr for July reg plate no further details ...these deals don't last long

[Deleted User]

VW bank always has low interest, it's in their own (interest) haha, to do it, they can well afford it.

noelf

You can see why other car manufactures are not best pleased due to the huge profits their making in China their able to undercut everyone else

Slattsy

Great thread!

How many people have actually went for PCP with Audi?
Might have a slight interest in this shortly.
I'm split on whether I think it's value.

mickdw

Slattsy wrote: »

Great thread!

How many people have actually went for PCP with Audi?
Might have a slight interest in this shortly.
I'm split on whether I think it's value.

I'm waiting to hear of anb example of someone who bought through pcp in 2011 and have now upgraded to new car in 14. If someone comes here ands says they bought an A6 in 11 using typical Figures as advertised by audi with a monthly payment of 430 or so and have now managed to get into a new car with similar monthly payment WITHOUT having to boost the deposit from cash savings, well then it is great value, otherwise, I feel the figures as often advertised are aimed too much at getting people out of their fully owned car into a pcp using that fully owned cars value to make the payments artificially low on a one off deal but not repeatable at year 3.

Slattsy

mickdw wrote: »

I'm waiting to hear of anb example of someone who bought through pcp in 2011 and have now upgraded to new car in 14. If someone comes here ands says they bought an A6 in 11 using typical Figures as advertised by audi with a monthly payment of 430 or so and have now managed to get into a new car with similar monthly payment WITHOUT having to boost the deposit from cash savings, well then it is great value, otherwise, I feel the figures as often advertised are aimed too much at getting people out of their fully owned car into a pcp using that fully owned cars value to make the payments artificially low on a one off deal but not repeatable at year 3.

My thoughts exactly.
I like the idea of it, but it's what happens after 3 years where the catch lies.

jameshayes

This isn't a steadfast way of looking at it but...

If you were to buy an A6 D today, the price would be 44,790 with a GFV of 19707.60. Which means, you are hoping that the car holds its value and in 3 years it is worth more than 19,707+your initial deposit of 13,755 = 33,462.

Going by 2011 cars on carzone at the moment, they are ranging from 20-30k. Given that you would be a caerful owner and you would be contracted to maintain low milage you would hope to be on the top end of that scale. So, (for examples sake) say the garage give you 29K for the car, that means you will have 29-19707=€9,293 for the deposit for your next car.

You will lose, but no matter what, when buying a car you will always lose. A good way of not losing as much is to negotiate the price of the car, if you save 1-2K on the sale price, you will be in a much better scenario.

noelf

Slattsy wrote: »

Great thread!

How many people have actually went for PCP with Audi?
Might have a slight interest in this shortly.
I'm split on whether I think it's value.

Last time i looked Audi was more expensive on apr rates

Slattsy

noelf wrote: »

Last time i looked Audi was more expensive on apr rates

5.9% i think, last time i checked.

noelf

Slattsy wrote: »

5.9% i think, last time i checked.

Had a test drive of the new A3 hatchback last year in Audi North Dublin really nice car

Slattsy

noelf wrote: »

Had a test drive of the new A3 hatchback last year in Audi North Dublin really nice car

Actually nicer in person (:cool:) than i thought tbh.

[Deleted User]

I think I like the idea of the PCP but my 20K miles a year makes it very expensive either way, but I do like the idea of PCP, opt for the lowest mileage to keep the payments low and then pay off the balloon at the end and own it, then it doesn't matter if I have 30K miles or 200K, there'll be no penalty as I'll own it.

Another way to do it would be pay the minimum deposit you can in order to have the balloon at the end and.

Nissan have pretty high interest rates, this is where the Vw and Audi benefit as the can set their own interest rates.

Perhaps an E-Golf would work around the same as a leaf even though the Golf is more expensive.

Slattsy

I do very little miles myself and would be looking at a petrol A4.

PCP has its strong points and will suit a lot of people.

valdigre

AS I said, in case anyone is wondering, I masę a comparison for cost od credit for 17k Worth of Clio and with PCP the total payment including the deposit would cost you around 18.5k, HP would be around 19k and BOI personal loan would cost you 20k in total...

No contest really, if for example you are interested in keeping the car, I don't mind setting aside the sum for balloon at the end.

[Deleted User]

noelf wrote: »

You can see why other car manufactures are not best pleased due to the huge profits their making in China their able to undercut everyone else

Car makers are able to sell cars with substantial discounts in the U.S so if they can do it there to sell cars why not in Europe ?

Or are we having to cover the losses they make in the U.S ?

blingrhino

Should I pcp a new 318d or buy a 2011 520d with a normal car loan .

I have sold my car , so I have 13k to play with .

Option on 318 is approx 9k deposit with monthly payments (4k to play with so first year paid for )

Option on 520 is pay my 13k and then normal loan payments .

Plus points that I can see are : new 318d low ish monthly payments .

Minus points : I own nothing . In 3 years I have to find another 8k-9k . 3 yo car.

Am my missing anything or is this correct .

mickdw

blingrhino wrote: »

Should I pcp a new 318d or buy a 2011 520d with a normal car loan .

I have sold my car , so I have 13k to play with .

Option on 318 is approx 9k deposit with monthly payments (4k to play with so first year paid for )

Option on 520 is pay my 13k and then normal loan payments .

Plus points that I can see are : new 318d low ish monthly payments .

Minus points : I own nothing . In 3 years I have to find another 8k-9k . 3 yo car.

Am my missing anything or is this correct .

You would have to find some cash at year 3 or take on higher payments unless the 3 series at year 3 will be worth the gfv plus 9k.

I would go for an 11 5 series if the choice was between the 2. Your 13k will buy a large chunk of that outright and with small payments over 3 years you will own it. It will likely leave you in a similar position to now should you wish to sell again in 3 years.

noelf

noelf wrote: »

Just noticed my local vw dealer is showing a finance rate of 1.32 apr for July reg plate no further details ...these deals don't last long

Out of date information on their web page .. just a year !!

Scottie99

Deleted User wrote: »

VW bank always has low interest, it's in their own (interest) haha, to do it, they can well afford it.

Just wait till the new VW EV comes out..:)