PCP finance.

markad1 · 05-02-2016 02:08PM

I had to produce 3 months banks statements.
The statements had to have my name address and account number on it.
I had a print out from online account but it didn't have all the details on it so had to get it from the bank.

markad1 · 05-02-2016 02:08PM

Double post

Drummerboy08 · 05-02-2016 02:49PM

Kaiser84 wrote: »

Thanks for the reply.

For a car that's around 26/28k, how much couldI reasonably expect to get knocked off the price do you think?

If it's an ambition model then around 1250-1500 off.

No need for bank statements but we can be handy if they're easily available.

mickdw · 05-02-2016 03:23PM

For self employed looking to take dealer finance, what would generally be required in terms of getting approved. I would have a perfect credit history.

EDit · 05-02-2016 03:30PM

For anyone who has renewed their PCP (ie, got a second car after 3 yrs) how far in advance of the end date would you recommend talking with the dealership about next steps? Obviously, you don't want to be strolling in the weekend before the finance runs out as you may not find anything you want on the forecourt, but if you are likely to be ordering a brand new car, how early should you be going in and talking options (3 months, 6 months?)?

mickdw · 05-02-2016 03:33PM

I'd be in there 6 months early.

Stallingrad · 05-02-2016 03:42PM

I'm suspicious of anything that suits the car manufacturers and lenders so well. While interest rates are low now, what happens in three years if you want to roll onto another PCP contract and the interest rate gets hiked up to 6%?

I think PCP is a cheap credit scam to entice people into effectively renting new metal, it suits manufactures long term as people get hooked into 'renting' their cars, and customers short term, who in three years time may well have no car, no deposit, and will have no option but to use their GMV to continue with another contract.

EDit · 05-02-2016 04:06PM

mickdw wrote: »

I'd be in there 6 months early.

Thanks, good to know

05-02-2016 04:09PM

I'm 2 years early !

Nonoperational · 05-02-2016 04:09PM

Stallingrad wrote: »

I'm suspicious of anything that suits the car manufacturers and lenders so well. While interest rates are low now, what happens in three years if you want to roll onto another PCP contract and the interest rate gets hiked up to 6%?

I think PCP is a cheap credit scam to entice people into effectively renting new metal, it suits manufactures long term as people get hooked into 'renting' their cars, and customers short term, who in three years time may well have no car, no deposit, and will have no option but to use their GMV to continue with another contract.

Calling it a scam is ridiculous. It's all perfectly clear. It's really not a difficult concept. Whether you deem it suitable for you or not is a different matter, but it's not a scam.

Falcon L · 05-02-2016 04:15PM

Stallingrad wrote: »

I'm suspicious of anything that suits the car manufacturers and lenders so well. While interest rates are low now, what happens in three years if you want to roll onto another PCP contract and the interest rate gets hiked up to 6%?

I think PCP is a cheap credit scam to entice people into effectively renting new metal, it suits manufactures long term as people get hooked into 'renting' their cars, and customers short term, who in three years time may well have no car, no deposit, and will have no option but to use their GMV to continue with another contract.

There's nothing to stop you arranging your own finance at the end of the PCP term and using it to pay off the outstanding balance, keeping the car and ending your PCP experience.

Stallingrad · 05-02-2016 04:17PM

Nonoperational wrote: »

Calling it a scam is ridiculous. It's all perfectly clear. It's really not a difficult concept. Whether you deem it suitable for you or not is a different matter, but it's not a scam.

You are right of course, I was being bit colorful. Lets call it a 'device'.

Drummerboy08 · 05-02-2016 04:24PM

Stallingrad wrote: »

You are right of course, I was being bit colorful. Lets call it a 'device'.

It's not really any different to Hire Purchase really bar the GFV.

Somewhere along the line you have to pay for the full car, so it makes no odds.

Not quite sure you grasp the who working of a PCP agreement.

Stallingrad · 05-02-2016 04:25PM

Falcon L wrote: »

There's nothing to stop you arranging your own finance at the end of the PCP term and using it to pay off the outstanding balance, keeping the car and ending your PCP experience.

True, but realistically how many will do that? Payments on an 3 year old car, or payments on new car? Instead they will choose a new car, and to stay in hock to the lender, which is what all banks want. A steady supply of people hooked on paying them interest.

I also think the low rates we see now are designed to entice people into this process, rates will not stay this low.

The upside for people who are not fussed about that new car feeling is that the market will be awash with decent three year old cars.

Stallingrad · 05-02-2016 04:29PM

Drummerboy08 wrote: »

It's not really any different to Hire Purchase really bar the GFV.

Somewhere along the line you have to pay for the full car, so it makes no odds.

Not quite sure you grasp the who working of a PCP agreement.

Is they key difference not the process by which the lenders want to you stay on PCP, keep renewing keep buying their marque?

Whereas on HP once paid for you are out with your car, and they may not see you or your business again for years.

It's an enticing hook, no?

Falcon L · 05-02-2016 04:37PM

Stallingrad wrote: »

Is they key difference not the process by which the lenders want to you stay on PCP, keep renewing keep buying their marque?

Whereas on HP once paid for you are out with your car, and they may not see you or your business again for years.

It's an enticing hook, no?

Again, nothing stopping you bringing your 3 year old Ford to a Toyota dealer to use as deposit on one of their cars. The finance isn't with the dealer.

Stallingrad · 05-02-2016 04:50PM

Falcon L wrote: »

Again, nothing stopping you bringing your 3 year old Ford to a Toyota dealer to use as deposit on one of their cars. The finance isn't with the dealer.

Take a VW, is the finance not with their bank? So in that case you have to clear the loan with them before trying to trade in elsewhere?

05-02-2016 04:53PM

If you intend to change your car in 3 years time then PCP makes perfect sense, if you can't decide now what you want to do in 3 years then PCP makes sense because it gives you 3 years to think about whether you want to keep the car or not, as suggested above you always have the option to refinance the balance of the loan.

Some people are quiet happy to change after 3 years, it's my understanding that you can also get PCP on some 2nd hand cars.

05-02-2016 04:53PM

If you intend to change your car in 3 years time then PCP makes perfect sense, if you can't decide now what you want to do in 3 years then PCP makes sense because it gives you 3 years to think about whether you want to keep the car or not, as suggested above you always have the option to refinance the balance of the loan.

Some people are quiet happy to change after 3 years, it's my understanding that you can also get PCP on some 2nd hand cars.

Ron Burgundy II · 05-02-2016 04:54PM

Stallingrad wrote: »

Take a VW, is the finance not with their bank? So in that case you have to clear the loan with them before trying to trade in elsewhere?

Same as any car finance really. Get a loan from the Credit Union or Bank this most be cleared prior to shifting the car. No one is going to buy a car with outstanding finance attached to it. If you decide to trade in then the garage will take the value of the finance from the trade in value and pay off the outstanding finance balance.

zizou_ · 05-02-2016 06:53PM

Stallingrad wrote: »

Is they key difference not the process by which the lenders want to you stay on PCP, keep renewing keep buying their marque?

Whereas on HP once paid for you are out with your car, and they may not see you or your business again for years.

It's an enticing hook, no?

I'm not overly keen on the terminology used when describing PCP deals. In my eyes the final payment after 3 years is simply a balloon payment (a term most people understand) whereas most manufacturers and people here call it GMFV (a term specific to PCP). IMO this could mislead people not familiar with financial products if not adequately covered by the seller.

The second issue is talking about how much equity you have in the car after 3 years. In reality there is no way to release this equity after 3 years - the only way would be to offload your 3 year old car privately with finance owed which will be pretty hard. Obviously the car can be handed back but in this case the equity would not be realised.

A traditional HP arrangement is much more straightforward but people are attracted by the promise of low monthly payments with PCP.

Bigcheeze · 05-02-2016 10:04PM

The whole pcp thing is moving the market towards the U.S. car market. If you watch U.S. Television every second ad is either for prescription medicine(illegal to advertise in Ireland) or new cars. The purchase price of the car is never quoted in a U.S. car ad, just the monthly repayment.

EDit · 06-02-2016 10:01AM

I am 2 yrs into a PCP, but I would say that the way they are advertised (be it on TV or in papers, or even in the dealerships) is at best disingenuous. The example advertised is always with the max initial deposit and the minimum monthly payments, with the former usual well hidden in small print and the latter massively emphasised. Most people just see that, for example, you can have a 5 series for just €300 a month and get sucked in without realising they need something like 15 grand upfront to get that kind of monthly repayment plan.

In my case, we went for low deposit (<5% of car value) and higher monthly payments (but within a stress-tested personal budget)...ultimately, it's clearly not for everyone and is a personal choice based on your circumstances

06-02-2016 10:41AM

EDit wrote: »

The example advertised is always with the max initial deposit and the minimum monthly payments, with the former usual well hidden in small print and the latter massively emphasised. Most people just see that, for example, you can have a 5 series for just €300 a month and get sucked in without realising they need something like 15 grand upfront to get that kind of monthly repayment plan.

This is to get people into the showroom where they can be talked into a sale.

This is why I don't go to dealers and communicate only by E-mail, I know what I want so unless I want an actual test drive I don't bother going near the showroom.

digiman · 06-02-2016 11:34AM

Any thoughts to going with PCP when you already own your existing car which would be worth say 70% of the price of a new car when trading in. When I asked about this I was been given about €20k back as cash and then paying this back on low interest over the next 3 years. Affectively it is a low interest 3 year loan.

I would have better use for the €20k now to work on a house rather than have in the value of a car

vintagevrs · 06-02-2016 11:43AM

Sounds like a fair plan. You are effectively borrowing the 20k at a lower rate than you'll get else where. No issue doing what you are suggesting. Just make sure you are getting a fair price for your current car.

zizou_ · 06-02-2016 12:15PM

digiman wrote: »

Any thoughts to going with PCP when you already own your existing car which would be worth say 70% of the price of a new car when trading in. When I asked about this I was been given about €20k back as cash and then paying this back on low interest over the next 3 years. Affectively it is a low interest 3 year loan.

I would have better use for the €20k now to work on a house rather than have in the value of a car

What % deposit will you be placing on the new car once you've got the 20k back?

If you spent the 20k on your house you will still owe the finance company after 3 years for the car. Your realistic options are to pay them the balloon/GMFV payment or refinance for a further 3 years. Either way you're not getting a low interest loan for 3 years.

Lantus · 06-02-2016 03:49PM

If your car has a very high value then I'd run the numbers of traditional finance. You don't want to lose all your equity in your existing car. It may be best selling it privately. PCP works best I feel when the deposit matches the projected equity after three year.

digiman · 06-02-2016 05:33PM

zizou_ wrote: »

What % deposit will you be placing on the new car once you've got the 20k back?

If you spent the 20k on your house you will still owe the finance company after 3 years for the car. Your realistic options are to pay them the balloon/GMFV payment or refinance for a further 3 years. Either way you're not getting a low interest loan for 3 years.

I would probably put down 15k deposit, car is worth 35-40k and car I would buy it 50-55k

zizou_ · 06-02-2016 05:50PM

digiman wrote: »

I would probably put down 15k deposit, car is worth 35-40k and car I would buy it 50-55k

Thats a fairly big % deposit for PCP - close to 30%. This will reduce your monthly payments but at year 3 you will have to stump up a further €7.5k to keep the same monthly payments for the next 3 years if you go again.

Only you can decide if PCP is for you but it sounds like a big change from how you currently pay for your car.

PCP finance.

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