GolfGTIforum.co.uk
General => General discussion => Topic started by: jhunter_83 on 28 October 2013, 16:10
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What are the positives and negatives of the above.
I have been offered a deal which seems good but I've never used PCP before.
What are people's thoughts?
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I bought my ED30 via PCP. The plan was to change cars every three years and have the latest GTI. Wasn't a bad plan - put down a deposit (that you'll never see again), then pay monthly. At the end of three years, there's a balloon payment so you can either settle or use as deposit for the next car.
My problem was that I fell in love with the ED30 and hence paid the balloon payment. IIRC I ended up paying about £3000 more than if I'd bought the car via a loan instead.
Depends on what you're gonna do with the car. I have an aunt who changes her Polo every three years in this way.
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PCP's work for people that are happy paying £x each month to have a car in warranty to drive around in. They are seen as affordable way of getting into a car, with little up front outlay, however because you deffer a large amount of money to the end of the deal, it is overall more expensive as you take longer to pay the money back.
I wouldn't want to put down a deposit, pay lots of thousands to pounds for three years, then be faced with the decision of A- having to find a substantial amount of cash, which may mean more finance, B - hand the car back and have nothing to show for the last three years, or C- be forced into using what equity you have in the car as a deposit to start all over again with another deal on another car.
People will come on here and justify that buying a new car in this way can be cost effective over buying a used one with cash, but to me, I prefer to not be beholden to anyone. If my income goes to pot, I've not got to worry about finding the monthlies. If it gets even worse than that, I've got something that I own to sell.
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It's a really personal thing. Different ways for different circumstances.
My wife's Golf is bought with a substantial deposit, knowing we are likely to buy it out at the end of contract.
But, I run a 911 C2S on what was originally a company car opt out. I didn't want to affect the family finances with my choice of car, so a known monthly cost suits me well. I ran a BMW 335i before it and bought that and ran it for a fourth year. Bizarrely, the 911 is cheaper per month than the BMW was purely down to the residual strength. I could not have afforded to run either if they had been cash purchases.
I put little/zero deposit down which gives you the option of walking away with no further obligation at 50% of contract paid if the car is in negative equity under the consumer credit act.
Not the most cost effective way, but suits my circumstances.
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PCP gets you so high its unbelievable, you are indestructible and hallucinate like hell its pretty bad :laugh:
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thought you were going on about angel dust! :laugh:
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PCP gets you so high its unbelievable, you are indestructible and hallucinate like hell its pretty bad :laugh:
So it wasn't just me who wondered what this thread was about :laugh:
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PCP gets you so high its unbelievable, you are indestructible and hallucinate like hell its pretty bad :laugh:
So it wasn't just me who wondered what this thread was about :laugh:
Ref terminator clip :laugh:
https://www.youtube.com/watch?v=yqprKQRC_yg
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Ref terminator clip :laugh:
https://www.youtube.com/watch?v=yqprKQRC_yg
Guess what I'm off to watch :cool:
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PCP's work for people that are happy paying £x each month to have a car in warranty to drive around in. They are seen as affordable way of getting into a car, with little up front outlay, however because you deffer a large amount of money to the end of the deal, it is overall more expensive as you take longer to pay the money back.
I wouldn't want to put down a deposit, pay lots of thousands to pounds for three years, then be faced with the decision of A- having to find a substantial amount of cash, which may mean more finance, B - hand the car back and have nothing to show for the last three years, or C- be forced into using what equity you have in the car as a deposit to start all over again with another deal on another car.
People will come on here and justify that buying a new car in this way can be cost effective over buying a used one with cash, but to me, I prefer to not be beholden to anyone. If my income goes to pot, I've not got to worry about finding the monthlies. If it gets even worse than that, I've got something that I own to sell.
Depends on how you look at it, we have just done our first PCP on my wife's BMW and the numbers work well for us.
Firstly let's deal with new car depreciation, if you want a brand new car and all that goes with it you need to get your head around the fact after 3 years give or take you will have lost 50% of that money...
From there the numbers work well, the Apr rate the dealers offer is generally better than you'll get from high street lenders for an unsecured loan.
Then you get to negotiate a good chunk off the cars list price which in our case exceeded the finance costs and then some through the 3 year period.
Finally we are going to save the balloon payment through the 3 year deal so we don't have to pay any further interest on the money.
I am under no illusion that we could have bought an 18 month old car from a dealer with £10k off the new price but where's the fun in that, you only live once and you can't take it with you.
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My mates dad after loosing about 23k on a 5 series (bearing in mind he swaps his cars ever 2 years give or take 6 months) he does PCP now and saves a flipping fortune.
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My mates dad after loosing about 23k on a 5 series (bearing in mind he swaps his cars ever 2 years give or take 6 months) he does PCP now and saves a flipping fortune.
What new 5 series looses that sort of money in two years? A petrol one with every option ticked maybe?
If a car depreciates by x amount, it will depreciate by that amount whether you pay cash for it or have it on finance. So I don't understand why having a PCP deal would make it cheaper to drive round in. Surely having a PCP, you pay for the depreciation plus the interest on the borrowed money?
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People will come on here and justify that buying a new car in this way can be cost effective over buying a used one with cash, but to me, I prefer to not be beholden to anyone. If my income goes to pot, I've not got to worry about finding the monthlies. If it gets even worse than that, I've got something that I own to sell.
I agree. Call it old fashioned but I am not overly enthusiastic with the idea of owing anyone money for a car even if it's available be it PCP or Leasing etc.
But then I wouldn't spend £30k on a Golf as I don't believe the car is worth that.
I had a quick scan through a couple of leasing companies and looking at the 'offers' couldn't get a vehicle with what I wanted for less than £4-500/pcm going out which is some peoples mortgages! I've seen people with attractive leases but you can't be fussy about what you're driving.
I guess it comes down to whether you want to be in the latest car.
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My mates dad after loosing about 23k on a 5 series (bearing in mind he swaps his cars ever 2 years give or take 6 months) he does PCP now and saves a flipping fortune.
What new 5 series looses that sort of money in two years? A petrol one with every option ticked maybe?
If a car depreciates by x amount, it will depreciate by that amount whether you pay cash for it or have it on finance. So I don't understand why having a PCP deal would make it cheaper to drive round in. Surely having a PCP, you pay for the depreciation plus the interest on the borrowed money?
Maybe I've got it confused with leasing or whatever it is. Was a diesel how long he had that one for I dunno but the proceeding X5, MK6 and Tiguan all lasted 2 years a pop.
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The great thing about PCP is that you're only paying the depreciation.
The bad thing about PCP is that you're only paying the depreciation.
:grin:
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The great thing about PCP is that you're only paying the depreciation.
The bad thing about PCP is that you're only paying the depreciation.
:grin:
....and with minimal deposit you can get out after 50% repayment if the car is in negative equity with no financial penalties or loss of statutory rights :wink: