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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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MuddyDog

I'm finally getting around to getting a new car. I've got 2 different dealers to give me PCP deals on 2 very similar cars. One car was listed around 43k and the other around 45k but both dealers said they will do a straight sale for 40.5k. The monthly payments over 3 years are within 4 quid of each other but the GMFV differs greatly with one at 17k and the other at 14.5k. Ideally I'd like the GMFV as low as possible as I plan to pay for it all at the end of the 3 years. Any reason why there is such a difference here (seeing as they are both 40.5k sales) and is there room for talking them into a lower GMFV?

mickdw

MuddyDog wrote: »

I'm finally getting around to getting a new car. I've got 2 different dealers to give me PCP deals on 2 very similar cars. One car was listed around 43k and the other around 45k but both dealers said they will do a straight sale for 40.5k. The monthly payments over 3 years are within 4 quid of each other but the GMFV differs greatly with one at 17k and the other at 14.5k. Ideally I'd like the GMFV as low as possible as I plan to pay for it all at the end of the 3 years. Any reason why there is such a difference here (seeing as they are both 40.5k sales) and is there room for talking them into a lower GMFV?

If there is no trade in involved in your deal and assuming deposit you are offering is the same on both cars, one dealer must be charging far more interest on the deal.

MuddyDog

That's what I thought alright. Can obviously just play one against the other now.

With regards GMFV, can you haggle with this? I want it as low as possible. Do you know or have experience of trying to reduce this figure?

grogi

MuddyDog wrote: »

That's what I thought alright. Can obviously just play one against the other now.

With regards GMFV, can you haggle with this? I want it as low as possible. Do you know or have experience of trying to reduce this figure?

There should be no issue with it, but it is somehow unorthodox (the public usually wants to have less monthly costs now and don't bother about future). However the lower GMFV, the less interest you will pay - the less money the financial institution makes off you.

If they don't agree to have it lowered, just put the twenty aside every month - effect almost (but a few euros of interest) the same.

MIKEKC

MuddyDog wrote: »

I'm finally getting around to getting a new car. I've got 2 different dealers to give me PCP deals on 2 very similar cars. One car was listed around 43k and the other around 45k but both dealers said they will do a straight sale for 40.5k. The monthly payments over 3 years are within 4 quid of each other but the GMFV differs greatly with one at 17k and the other at 14.5k. Ideally I'd like the GMFV as low as possible as I plan to pay for it all at the end of the 3 years. Any reason why there is such a difference here (seeing as they are both 40.5k sales) and is there room for talking them into a lower GMFV?

Are you sure you can buy it for the GMFV?. I thought that this was the minimum that the car was worth. The car may be worth more than this at the end of the lease

MuddyDog

MIKEKC wrote: »

Are you sure you can buy it for the GMFV?. I thought that this was the minimum that the car was worth. The car may be worth more than this at the end of the lease

Yeah I will be able to buy it for the GMFV. If I was looking to trade in for a new car again after 3 years I'd wasnt a higehr GMFV obviously but I'll be keeping this for about 5/6 years all being well so I want the lowest possible GMFV so that after the 3 years paying monthly installments I'll have a lower number to pay. No real issue then getting the dealer to lower the GMFV by the sounds of it?

MIKEKC

MuddyDog wrote: »

Yeah I will be able to buy it for the GMFV. If I was looking to trade in for a new car again after 3 years I'd wasnt a higehr GMFV obviously but I'll be keeping this for about 5/6 years all being well so I want the lowest possible GMFV so that after the 3 years paying monthly installments I'll have a lower number to pay. No real issue then getting the dealer to lower the GMFV by the sounds of it?

Shouldn't be then

Drummerboy08

Depends on the supplier of the finance but in most cases the GFV isn't up for negotiation.

MuddyDog

What do I need to apply for PCP finance by the way? Am I meant to show up with bank statements or similar? Also, at the end of 3 years if the GMFV is 20k I can re-finance under HP. If I have 5k cash can I pay off 5k and re-finance the other 15k or would I have to re-finance the entire 20k?

sillysocks

MuddyDog wrote: »

What do I need to apply for PCP finance by the way? Am I meant to show up with bank statements or similar?

When I applied I only had to provide proof of address (recent bill) and passport/drivers license d as ID and that was it. They just asked what my income was but never asked for proof or bank statements. I was very surlrised, esp S I'd only been in my job 6 months!

MuddyDog

sillysocks wrote: »

When I applied I only had to provide proof of address (recent bill) and passport/drivers license d as ID and that was it. They just asked what my income was but never asked for proof or bank statements. I was very surlrised, esp S I'd only been in my job 6 months!

That seems almost too easy. No credit checks or need for bank statements or proof of earnings!

conzy

With VW Bank anyway they do a credit check. I was asked for bank statements and the credit was approved the following morning

Ryath

OSI wrote: »

Yeah VW bank are definitely thorough! Wanted bank statements, letter from employer, asked about rent etc. Took the best of a week for me :-/

Was way quicker for us with VW bank through Seat, wife just asked for id and proof of address. No financial details asked just if we were home owners who we banked with. None of the bills are in her name so she only her payslip that are posted out as proof of address. It was after 5 in the evening when we applied so she didn't get approval till next morning but salesman said during the day they often get back within an hour.

Gael23

If you decide to keep your car after the 3 years is up, does the APR stay the same and you just keep paying or would you need to get a CU Loan?

MuddyDog

Gael23 wrote: »

If you decide to keep your car after the 3 years is up, does the APR stay the same and you just keep paying or would you need to get a CU Loan?

I've been told you'd have to re-finance using Hire Purchase if you don't pay the GMFV.

Drummerboy08

OSI wrote: »

You can pay for the GMFV in whatever way you see fit. If you wish to acquire a credit union loan, go ahead, wanna pay in wads of fifties, why not. Of course the dealer will try and push you towards refinancing it with themselves through HP as they'll get yet another cut on that to.

Apr with vw bank is 6.9% to refinance the GFV at month 37. Probably cheaper than most credit unions can offer. Dealer probably makes €150 for facilitating the new loan.

djPSB

Going to consult with my local garage in relation to the costs associated with the purchase of a new VW Golf Trendline through PCP but would appreciate any feedback anyone has on costs.

Does anyone have any idea approximately how much a 162 VW Trendline Golf would cost through PCP net over a 3 year period. If at the end of the 3 years, I don't not want to keep the car and want to end the PCP. Any information on deposits and monthly repayment amounts appreciated.

SteelyDanJalapeno

djPSB wrote: »

Going to consult with my local garage in relation to the costs associated with the purchase of a new VW Golf Trendline through PCP but would appreciate any feedback anyone has on costs.

Does anyone have any idea approximately how much a 162 VW Trendline Golf would cost through PCP net over a 3 year period. If at the end of the 3 years, I don't not want to keep the car and want to end the PCP. Any information on deposits and monthly repayment amounts appreciated.

Roughly, based on a 6 - 7k deposit, I'd estimate 240 - 280 per month, with about 12k - 14k gmfv

SEPT 23 1989

sillysocks wrote: »

When I applied I only had to provide proof of address (recent bill) and passport/drivers license d as ID and that was it. They just asked what my income was but never asked for proof or bank statements. I was very surlrised, esp S I'd only been in my job 6 months!

Reminds me of mortgage approvals during the boom

djPSB

Approx figures I get over the phone were:
New 1.6 Trendline Golf would cost approx €27,000

20% deposit =€5400
36 monthly payments at €404 p/m=€14,555

Value at end of 36 months =€9500

So handing the car back at the end isn't really an option as I would have already spent >€20000 on the car.

SteelyDanJalapeno

APR must be quite high on that?

You should go in and talk to dealers, me and my partner both picked up motors with 0% APR recently, saved a nice bit overall.

Jasper79

djPSB wrote: »

Approx figures I get over the phone were:
New 1.6 Trendline Golf would cost approx €27,000

20% deposit =€5400
36 monthly payments at €404 p/m=€14,555

Value at end of 36 months =€9500

So handing the car back at the end isn't really an option as I would have already spent >€20000 on the car.

That seems quite high price, speced a 1.6 trendline with the tech pack and metalic paint at €23,322, what's the extra 4k for ? delivery ?

Casey78

Anyone know of any dealers doing PCP on second hand cars?

Drummerboy08

It's probably cheaper to pcp a Highline model with the lower APR.

Most dealers offer used PCP also.

jimmycrackcorm

djPSB wrote:

Value at end of 36 months =â‚¬9500

Can you buy a three year old golf for 9500 especially based on the original price spec you gave?

Seems a bit low.

djPSB wrote:

So handing the car back at the end isn't really an option as I would have already spent >â‚¬20000 on the car.

Like saying renting is dead money...

vandriver

Jasper79 wrote: »

That seems quite high price, speced a 1.6 trendline with the tech pack and metalic paint at €23,322, what's the extra 4k for ? delivery ?

2013 Golfs start at 15k on cars Ireland .It looks like they've priced in a full deposit for your next car in 3 years.

opinionated3

I've being following this thread for a while now and it seems to me that pcp is not something that will suit the typical average paid irish worker. I think the big problem is not the initial 3 years ...it's the decision time when the 3 years is up. I can't see there enough equity in most cars to see a person continue on with a new car again and keep the same repayments. I realise that the option is there to refinance the current car and pay it off over a longer term but obviously that won't suit someone who got into pcp on the basis of upgrading every three years.

Drummerboy08

It all depends on the initial deposit amount. If it's a 10/15% deposit then it should be ok but any higher and you're going to be topping your next deposit up to keep your payments the same.

opinionated3

I think you could be bang on with that assessment. A friend of mine enquired about pcp with a hyundai dealership and the salesman was dropping hints that he shouldn't put down a deposit higher than 20% of the cars worth. ....

digiman

My own view on how much deposit to put down is all based on the interest rate. The lower the interest rate the lower your deposit should be, and the higher the interest rate the higher your deposit should be. Your main concern is how much the car will cost you over the 3 years as the GFV will be the same no matter how much deposit you put down. The cost over 3 years is the deposit plus the 36 monthly payments.

E.g. Car is worth €33,000
Deposit is €10,000
GFV is €10,000

0.1% Interest, 36 payments at €362.50 Cost of car is €23050.00
5.9% Interest, 36 payments at €444.06 Cost of car is €25986.16

E.g. Car is worth €33,000
Deposit is €3,000
GFV is €10,000

0.1% Interest, 36 payments at €557.25 Cost of car is €23061.00
5.9% Interest, 36 payments at €656.70 Cost of car is €26641.20

So by putting down a smaller deposit you end up paying €700 extra in interest over the 3 years