PCP finance.

GavMan · 26-02-2016 10:16AM

sheff the ref wrote: »

Would be very interested in seeing how that would stand up in the future. At 7cent a km, that equates to 700 euro for every 10,000 km.

30,000 km over budget would be €2100 of a penalty which does not seem excessively harsh considering the probably devaluation of a car with 30,000 more km on the clock

If you weren't looking to roll into a new PCP, you could always sell it yourself privately and clear the GMFV yourself, thus avoiding the penalty.

Falcon L · 26-02-2016 10:19AM

GavMan wrote: »

If you weren't looking to roll into a new PCP, you could always sell it yourself privately and clear the GMFV yourself, thus avoiding the penalty.

The problem is that you have to do it the other way round. Clear the finance and then sell the car. A short term loan may be needed.

guylikeme · 26-02-2016 10:52AM

GavMan wrote: »

If you weren't looking to roll into a new PCP, you could always sell it yourself privately and clear the GMFV yourself, thus avoiding the penalty.

Thoughts on clearing the finance, them reselling it to garage as part exchange for a new car?

Would imagine this would put one up money wise

mickdw · 26-02-2016 11:05AM

guylikeme wrote: »

Thoughts on clearing the finance, them reselling it to garage as part exchange for a new car?

Would imagine this would put one up money wise

That is pretty much what you do anyway. You get a trade in value when looking to change cars. If you dont think it's a fair price, go somewhere else. The garages can all handle clearing finance etc so it's not an issue.
You could walk into toyota with a vw on pcp, have your settlement figure from vw bank to hand and the toyota dealer will happily work out a deal.

carsfan · 26-02-2016 11:38AM

Agree with mick
Any garage will clear the finance and what is left over is yours towards the car they are hoping to sell you. You don't have to pay it off or anything first yourself.
Re bmw I was surprised at penalties for paying off early.
Finance guy said bmw want 60 per cent plus of finance on pcp as they reckon it is the best way of retaining customers.

mickdw · 26-02-2016 11:45AM

I think you are looking at the bmw interest issue wrongly.

With an early settlement, you will be paying less interest than you would have been if you finished out the deal.
So if the entire deal had a cost of credit of €3000, paying off early, you might only be paying 2000 interest for example plus a further 3 months interest penalty.
My point is that it is not a penalty on top of agreed interest amount, it is a penalty for escaping with reduced interest.

Drummerboy08 · 26-02-2016 11:50AM

A lot of loans are like that, it's not just bmw's pcp.

carsfan · 26-02-2016 02:37PM

I understand your view mick. I'm not complaining as I understand a lot of loans are like this. I do wonder why VW bank don't charge this when paying off early however.

mickdw · 26-02-2016 02:39PM

carsfan wrote: »

I understand your view mick. I'm not complaining as I understand a lot of loans are like this. I do wonder why VW bank don't charge this when paying off early however.

Are you sure they don't.
If you go back early with a vw, you will get a settlement letter with a figure. Have you worked out how they arrive at this figure. It will be less than if you had run the entire term but how exactly is it calculated?

carsfan · 26-02-2016 03:05PM

Another poster, vintage vrs reckons they don't. I haven't actually asked VW.
The bmw figures were for the 330e. Did they ever come back up you about it?

mickdw · 26-02-2016 03:25PM

carsfan wrote: »

Another poster, vintage vrs reckons they don't. I haven't actually asked VW.
The bmw figures were for the 330e. Did they ever come back up you about it?

I got the figures for the 330e and posted them here. At their second attempt they got it right in terms of applying grants.
The figures are good tbh but I just think it's the wrong car at the minute for me and would favour the c class in that bracket. They are letting me know when they get one in anyway as they have a car ordered for a customer he told me.
Can't see test drives being offered on that though.

sheff the ref · 26-02-2016 07:44PM

Got a quote on a Seat Ibiza 1.4 diesel 75bhp Sport today.

Cost after my trade in: 12,859.84
GMFV: €7300 (also amount of money owed on the car)
Mileage Limit: 20,000 to 30,000 km
Monthly Payment is: €154.44

Discussed changing after 2 years as opposed to 3 years. Advantages would be that mileage is obviously lower making it a more attractive car to sell on and I would have a fresh car after 2 years. Lets say I do 40,000km, over 2 years it is 80,000km which doesnt seem as bad as the 120,000 over 3 years which looks a lot on a clock. Obviously it is the exact same thing but perception is everything.

Basically to change after two years, it would mean obviously that I wouldnt be making the payments in Year 3 so €154.44 x 12 = €1853.28. That money would be added to the €7300 giving a total amount of finance owed on the car of €9153.28

To start a new PCP realistically I would need to be looking at perhaps a value of €14,500 after 2 years. Is that achievable???

.G. · 27-02-2016 12:21AM

141 Ibiza's today on carzone ranging from just under 15k to just over 13k. That would give you an idea of what a dealer will sell it for in 2 years but not what they'll give you for it.

sheff the ref · 27-02-2016 12:27AM

They appear to be 1.2 diesels, how much of a difference that would make to price compared to 1.4 diesel, I don't know. Dealer wont lose anyway. I guess it is a gamble. The only thing I will say is that my own car has 200+ km on the clock. Wear and tear expense will start to kick in from now on and I may as well be paying for a new car in lieu of future amounts spent.

superg wrote: »

141 Ibiza's today on carzone ranging from just under 15k to just over 13k. That would give you an idea of what a dealer will sell it for in 2 years but not what they'll give you for it.

seb102 · 01-03-2016 10:59AM

I've been reading this thread to try and decide if I should go for PCP or HP. I got this quote for a second hand Golf from a VW dealer:

Cost: 21000 (after trade-in)
GMV: 6900
Monthly payment: 470

So if I'm not mistaken, that means I'd end up paying 2800 in interest. Seems a bit high to me, are they ripping me off or am I missing something? I forgot what the APR was on this, but it's definitely much higher than what they offer for new cars (0% or 3.9% depending on model) and also seems higher than for HP.

On the other hand, if I bough it with an HP plan, I could have similar monthly payments over 4 years but still end up paying less in total.

So in this case I don't see any advantage at all choosing PCP, other than paying less over the first 3 years, but ending up paying more at the end (or losing money if I trade in for another car).

pd: Seems like to take advantage of PCP I might do better buying a new car for say 30k. If it is really 0% APR I wouldn't be paying much more than for the 2nd hand one, although I imagine a new car will depreciate a lot more over 3 years than a 2nd hand.

sheff the ref · 01-03-2016 01:38PM

I am not saying I am correct but I am leaning towards the view that 0% PCP is probably better for smaller cars (Roughly €20,000 or less) in that predicting the value of the car in 3 years time is a gamble and with a smaller car there is less risk and less of a final payment.

With a bigger car (€30,000+) you have pumped in more money over the three years even at 0%, have a bigger final payment and have far more scope for depreciation

It all depends on what you like to drive, and what status you wish to portray I guess

737max · 01-03-2016 02:13PM

Problem with PCP is dealers are unwilling to negotiate and distributors want to make super-normal profits.
This is where this type product from SIXT would be very useful if it were available in Ireland.

http://www.sixt-neuwagen.de/

SIXT have purchasing/negotiating power which private buyers do not have.

They offer PCP and lease deals at ridiculously low rates and are very flexible.
For example no down-payment and 85 euro a month for a Hyundai i10 over 4 years is very attractive.

There is also more flexibility with regard to term duration, maintenance packages and included insurance.

A Colleague of mine is considering using this firm while waiting to qualify for a company car in 2.5 years time.
His best options are either this or run a banger car until eligible for a company car.

sheff the ref · 01-03-2016 02:23PM

737max wrote: »

Problem with PCP is dealers are unwilling to negotiate and distributors want to make super-normal profits.
This is where this type product from SIXT would be very useful if it were available in Ireland.

http://www.sixt-neuwagen.de/

SIXT have purchasing/negotiating power which private buyers do not have.

They offer PCP and lease deals at ridiculously low rates and are very flexible.
For example no down-payment and 85 euro a month for a Hyundai i10 over 4 years is very attractive.

There is also more flexibility with regard to term duration, maintenance packages and included insurance.

A Colleague of mine is considering using this firm while waiting to qualify for a company car in 2.5 years time.
His best options are either this or run a banger car until eligible for a company car.

How do they make money at those prices?? There appear to be phenomenal deals there

737max · 01-03-2016 02:28PM

cars are cheaper to buy new in Germany and resale prices are higher thanks to in-exhaustible demand from Eastern Europe.
For example, in my company car leasing scheme which is operated by SIXT leasing, the discount on new Opel Insignias "to order" not in stock is 38% off retail price.

737max · 01-03-2016 02:33PM

You know you are in a competitive market when the % discount available is stated differently dependent upon whether you are buying with flat or metallic paint.

seb102 · 01-03-2016 02:54PM

sheff the ref wrote: »

I am not saying I am correct but I am leaning towards the view that 0% PCP is probably better for smaller cars (Roughly €20,000 or less) in that predicting the value of the car in 3 years time is a gamble and with a smaller car there is less risk and less of a final payment.

With a bigger car (€30,000+) you have pumped in more money over the three years even at 0%, have a bigger final payment and have far more scope for depreciation

It all depends on what you like to drive, and what status you wish to portray I guess

It's still better than standard finance isn't it? Especially if you intend to keep the car. A big car is going to lose value regardless of how you pay for it. It's just a matter of saving up for that final payment over 3 years.

Drummerboy08 · 01-03-2016 03:22PM

737max wrote: »

Problem with PCP is dealers are unwilling to negotiate and distributors want to make super-normal profits.
This is where this type product from SIXT would be very useful if it were available in Ireland.

http://www.sixt-neuwagen.de/

SIXT have purchasing/negotiating power which private buyers do not have.

They offer PCP and lease deals at ridiculously low rates and are very flexible.
For example no down-payment and 85 euro a month for a Hyundai i10 over 4 years is very attractive.

There is also more flexibility with regard to term duration, maintenance packages and included insurance.

A Colleague of mine is considering using this firm while waiting to qualify for a company car in 2.5 years time.
His best options are either this or run a banger car until eligible for a company car.

There is no problem negotiating prices when buying a car on pcp.

737max · 01-03-2016 03:29PM

Drummerboy08 wrote: »

There is no problem negotiating prices when buying a car on pcp.

I would dispute this. negotiating with a dealer is like dancing with a devil.

dloob · 01-03-2016 03:47PM

So I've moved onto my second PCP recently and I guess there would be some interest in how that went.

On the first PCP I got a 131 Audi A3 Sportback 1.6 TDI.
It was 29.5K, it was the last of the old model so it got the S Line upgrade cheap along with some other bits like tinted windows and bigger alloys.
Deposit 6K
Cost 29.5K
Repayments 345
Settlement 12K
Mileage 20K a year

So almost 3 years later it's time to finish the deal.
No cheap S Line upgrades on offer this time and I want moar power too so I'm expecting it to cost more.
Audi offer a trade in of 18600 against a S Line A3 Sportback 1.4 TFSI 150.
Deposit 131 Audi + 800
Cost 36K
Repayments 476
Settlement 14K
Mileage 20K a year

Other dealers offered better trade ins but the best was BMW
BMW offered 21500 on a 120i sport (cost of about 38.5K)
Deposit 131 Audi
Cost 38.5K
Repayments 417
Settlement 16K
Mileage 15K a year

So I have a 120i now, Audi did later increase the trade in to 19K when informed of the better offers
They still seemed surprised when I told them I wouldn't be buying their car.

So in my case the monthly is up by over 50 on the original deal but then I did switch to a car costing near to 10K more up front.

I handed the Audi to BMW when I picked up the 120i and they sent a cheque to Audi Finance clearing the remaining finance.
Audi Finance still took another months payment out of my bank a week later mind you but it was no hassle getting it back from them.

guylikeme · 01-03-2016 03:48PM

737max wrote: »

I would dispute this. negotiating with a dealer is like dancing with a devil.

Simple idea - ask him for alot of extras and if (WHEN) he says "i cant", say "Ah c'mon, your not even meeting me half-way. Tell you what, fill it with fuel and ill take it"

€70 odd is better than a kick up the arsz (in my experience)

Drummerboy08 · 01-03-2016 03:53PM

737max wrote: »

I would dispute this. negotiating with a dealer is like dancing with a devil.

You're either dealing with a clown or your negotiation skills are quite poor.

Dealers are tripping over themselves to sell cars at the moment so getting some discount off a car on a pcp shouldn't be too hard.

sheff the ref · 01-03-2016 03:59PM

seb102 wrote: »

It's still better than standard finance isn't it? Especially if you intend to keep the car. A big car is going to lose value regardless of how you pay for it. It's just a matter of saving up for that final payment over 3 years.

Definitely Big Car on 0% PCP is better than a Big Car with interest

However I feel that a Small car on 0% PCP is less of a gamble than a Big car on 0% PCP

yop · 01-03-2016 04:49PM

737max wrote: »

I would dispute this. negotiating with a dealer is like dancing with a devil.

I've negotiated on the last 2 cars I have bought and "won"

Both were 0% PCP

mickdw · 01-03-2016 07:52PM

dloob wrote: »

So I've moved onto my second PCP recently and I guess there would be some interest in how that went.

On the first PCP I got a 131 Audi A3 Sportback 1.6 TDI.
It was 29.5K, it was the last of the old model so it got the S Line upgrade cheap along with some other bits like tinted windows and bigger alloys.
Deposit 6K
Cost 29.5K
Repayments 345
Settlement 12K
Mileage 20K a year

So almost 3 years later it's time to finish the deal.
No cheap S Line upgrades on offer this time and I want moar power too so I'm expecting it to cost more.
Audi offer a trade in of 18600 against a S Line A3 Sportback 1.4 TFSI 150.
Deposit 131 Audi + 800
Cost 36K
Repayments 476
Settlement 14K
Mileage 20K a year

Other dealers offered better trade ins but the best was BMW
BMW offered 21500 on a 120i sport (cost of about 38.5K)
Deposit 131 Audi
Cost 38.5K
Repayments 417
Settlement 16K
Mileage 15K a year

So I have a 120i now, Audi did later increase the trade in to 19K when informed of the better offers
They still seemed surprised when I told them I wouldn't be buying their car.

So in my case the monthly is up by over 50 on the original deal but then I did switch to a car costing near to 10K more up front.

I handed the Audi to BMW when I picked up the 120i and they sent a cheque to Audi Finance clearing the remaining finance.
Audi Finance still took another months payment out of my bank a week later mind you but it was no hassle getting it back from them.

Interesting. We need more examples like this to see how gfv are working versus trade in.
Worked out reasonably in this case to be fair.

dloob · 01-03-2016 08:20PM

mickdw wrote: »

Interesting. We need more examples like this to see how gfv are working versus trade in.
Worked out reasonably in this case to be fair.

It's probably a little bit of special case as the A3 was higher spec than normal to shift the last of the old models.
Although I suppose the fact that there is a newer model in the same year would decrease it's value too and balance that out a bit.

Anyway I'll let you know how I get on in three years!
It looks to me that BMW are being maybe a bit more aggressive on the GFV to reduce the monthly payments.

PCP finance.

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