pcp car deals

[redbrez]

What's people thoughts on them? Good or bad experiences?

Just looking at them cos I fancy changing my car every 3 years
And with my job change will be doing more miles 15,000 a year.

What I don't get is on , my first deal my p/k will pay a bit of debt of and count for a deposit , but at the end of the deal, when I renew I would have to keep finding
A couple of grand for a deposit, or risk higher monthly payments ?

Any advice , never had pcp before .

[Filo]

As I understand it, a pcp deal involves a cash payment at the end of the term to buy the car outright, the deal is you pay that balance or give the car back. The other option is to trade the car in for a newer car, the problem with that is the amount the dealership will give you for the car, ideally you need to recieve the outstanding balance plus a bit more for your deposit on the new car, a pcp deal usually involves an anual milage limit, if you exceed that limit the dealership knocks a certain amount per mile excedded of the price they are prepared to pay for the car. Go through the finer details of the deal before you commit to buy would be my advice

[IC1967]

PCP is a good deal - for the dealer. Let me know what the car is and annual mileage and I'll suss out the best way for you to get what you want. I'll give you the best options and the costs. It is another field in which I'm an expert.

My initial reaction though is that PCP is not the way forward from a financial perspective.

[redbrez]

PM you

[Rios]

Filo's pretty accurate in his summary.  Dealers love PCP, hate cash buyers.  Getting someone on a PCP and fully up with extras like Gap is a salesman's wet dream.  It will get you into a car which looks cheap to start with, that you will realistically never own because of the balloon payment at the the end and you need to be really careful on mileage restrictions especially if you're doing more than the average.

[NickDRFC]

If cars on pcp bear any resemblance to certain people on pcp c.1975 I would not recommend driving them.

[idler]

Filo's pretty accurate in his summary.  Dealers love PCP, hate cash buyers.  Getting someone on a PCP and fully up with extras like Gap is a salesman's wet dream.  It will get you into a car which looks cheap to start with, that you will realistically never own because of the balloon payment at the the end and you need to be really careful on mileage restrictions especially if you're doing more than the average.

I was talking to the Vauxhall salesman at JCT600 today and he was saying that they are discounting a new Astra by £5,000 meaning a new one is (elite 1.6) £13,500 and an ex demo is only 1k less. They must be vastly over priced or desperate to knock that off.

[afro goal machine]

Filo's pretty accurate in his summary.  Dealers love PCP, hate cash buyers.  Getting someone on a PCP and fully up with extras like Gap is a salesman's wet dream.  It will get you into a car which looks cheap to start with, that you will realistically never own because of the balloon payment at the the end and you need to be really careful on mileage restrictions especially if you're doing more than the average.

I was talking to the Vauxhall salesman at JCT600 today and he was saying that they are discounting a new Astra by £5,000 meaning a new one is (elite 1.6) £13,500 and an ex demo is only 1k less. They must be vastly over priced or desperate to knock that off.

I think the new model comes out soon

[idler]

I thought that there must be more to it.

[Dagenham Rover]

However it depends on what you want.
 I've had the last couple on pcp and it suits me I've never had to pay anything up front or when handing back (or initially thanks Hoola) its always covered the pcp and deposit and I actually still pay the same as the original pcp and with mine it always seems to tie in with 0% finance deals  I get a new car every three years at no initial cost and so far no increase in my monthly payment from when I originally started on pcp,  when I get to the stage I don't want to carry on I know Toyota (oops) will either accept the final payment or will refinance the outstanding amount over say 3 years to fully purchase, yes the dealers love it but it happens to suit me, it perhaps depends on brand loyalty as well.

As all things it suits some and not others, I am at the stage where I am debating whether to keep this one or go once more and keep the next

[redbrez]

Daggers
After you 3 years and you change how have you found the gmfv ? Has it always been bang on or have you had a better offer, hence being able to put a deposit down on another car .? Like the idea of pcp but not sure what happens at the end, surely if you have no value left in the car you must get a higher monthly charge ?

[Dagenham Rover]

Never needed to put a deposit down on the new one, its always covered the final payment and any deposit required, lets face it they want another new car out of the showroom   look after the car and it works out ok.  Obviously look carefully at any mileage limitations do you pay for servicing etc etc  but it's worked out great for me, last time I was swopping a Toyota yaris petrol for a hybrid Toyota yaris it was actually all done over the phone, I literally turned up on the day signed a new 3 year deal (0% ) handed back the 3 year old one and drove out with a brand new more expensive version  no money passed hands at all and my monthly payments stayed the same, they did try it on a bit but didn't get away with it but all in all I can't complain and got a good deal.

[Sprotyrover]

I have a PCP car and I think it is far better than buying,I always buy VW from Hayseldens and therefore get looked after.
I would be wary about going to a new dealer though.

[Dagenham Rover]

I think thats the answer Sproty go reputable 

[IC1967]

PCP is not a good way of financing a car. It is only any good for someone that has money to burn and is too lazy to put some effort into buying a car.

If you part exchange your car which is what most people do then you have already lost out. You'd get much more for your car selling privately than you ever would in part exchange.

The upfront cost of a car will be higher than it would be if you paid cash or used a 0% credit card and larger deposit or combination of these options.

You will normally pay interest on one of these deals. Typically about 5% APR. This will typically add more than £1000 to the cost of the car.

The price you will get at the end of the deal will be typically be at the very lowest end. You'd get much more selling privately.

To summarise. You pay more for the car at the start of the deal than if you bought it outright. You pay interest. You get a crap part exchange deal. You're tied into having that car for 3 years or there are financial penalties. At the end of the deal they offer you a crap price for the car.

Typically you then get another overpriced car using the one you've just had as deposit that they've given you a crap price on!

However the best advice would be to get a nearly new car. Buying brand new is also not very sensible financially due to the huge depreciation as soon as you drive away from the dealer's forecourt.

Typical example:

Car £14,600 list price.
Deposit £4,400
3 years finance £6768
Dealer value of car after 3 years £4,400
Loss, accepting a crap price to renew the deal £4000

So after 3 years with what you've paid out and what you've lost on the crap price given at the end of the deal to carry on you're actual monthly cost is £421.33 per month. That totals out at £15,168.

So in effect you've paid more than the list price and have no value left in the car.

If you bought cash you'd probably get at least a 10% discount. So £13,140 cost of car. You'd probably be able to sell the car privately for about £8,400. So if you take 8,400 from 13,140 you get 4,740. This is the actual cost of the car over 3 years. Divide £4,740 by 36 and the monthly equivalent cost is £131.66 per month.

As you can see, it is a no-brainer to avoid PCP deals like the plague.

[IC1967]

I think thats the answer Sproty go reputable 

There is no such thing as a reputable garage. They are all out to get as much money out of you as possible using every trick in the book.

[The Mighty Brian Rowe]

I think thats the answer Sproty go reputable 

There is no such thing as a reputable garage. They are all out to get as much money out of you as possible using every trick in the book.

Just like the tories then... 

[Dagenham Rover]

PCP is not a good way of financing a car. It is only any good for someone that has money to burn and is too lazy to put some effort into buying a car.

If you part exchange your car which is what most people do then you have already lost out. You'd get much more for your car selling privately than you ever would in part exchange.

The upfront cost of a car will be higher than it would be if you paid cash or used a 0% credit card and larger deposit or combination of these options.

You will normally pay interest on one of these deals. Typically about 5% APR. This will typically add more than £1000 to the cost of the car.

The price you will get at the end of the deal will be typically be at the very lowest end. You'd get much more selling privately.

To summarise. You pay more for the car at the start of the deal than if you bought it outright. You pay interest. You get a crap part exchange deal. You're tied into having that car for 3 years or there are financial penalties. At the end of the deal they offer you a crap price for the car.

Typically you then get another overpriced car using the one you've just had as deposit that they've given you a crap price on!

However the best advice would be to get a nearly new car. Buying brand new is also not very sensible financially due to the huge depreciation as soon as you drive away from the dealer's forecourt.

Typical example:

Car £14,600 list price.
Deposit £4,400
3 years finance £6768
Dealer value of car after 3 years £4,400
Loss, accepting a crap price to renew the deal £4000

So after 3 years with what you've paid out and what you've lost on the crap price given at the end of the deal to carry on you're actual monthly cost is £421.33 per month. That totals out at £15,168.

So in effect you've paid more than the list price and have no value left in the car.

If you bought cash you'd probably get at least a 10% discount. So £13,140 cost of car. You'd probably be able to sell the car privately for about £8,400. So if you take 8,400 from 13,140 you get 4,740. This is the actual cost of the car over 3 years. Divide £4,740 by 36 and the monthly equivalent cost is £131.66 per month.

As you can see, it is a no-brainer to avoid PCP deals like the plague.

you obviously read posts properly then 

[IC1967]

I think thats the answer Sproty go reputable 

There is no such thing as a reputable garage. They are all out to get as much money out of you as possible using every trick in the book.

Just like the tories then... 

I think you'll you'll find over history it is Labour that like to tax to the hilt.

[IC1967]

What have I not read properly? You think you've got a good deal. I doubt that very much. You may be happy with it. That's up to you. I'm sure if you did a bit of number crunching you'd get a shock at just how much it's costing you compared to the alternatives.

The fact that you sorted it all out over the phone is a big sign that you've been ripped off.

However if you're happy and can afford it then good luck to you.

I just don't want people falling for the spin that PCP is a good way to finance a car. It most definitely isn't. It's very costly and there are better ways with a bit of effort as I've proved.

[bobjimwilly]

There is no such thing as a reputable garage. They are all out to get as much money out of you as possible using every trick in the book.

another post that proves you talk a load of shite 

[IC1967]

There is no such thing as a reputable garage. They are all out to get as much money out of you as possible using every trick in the book.

another post that proves you talk a load of shite 

Oh dear. Sounds like someone's been the victim of a PCP miss selling scandal and has only just realised it. I bet the car salesmen love it when they see you approaching. I tend to have the opposite effect on salesmen. You can see the colour draining from their faces as I approach as they know if a deal is done they will have been screwed into the ground.

Challenge. Anyone on a PCP deal put your details on this thread and I will demonstrate how much of a mug you've been taken for. On the other hand it would also give you the opportunity to prove to everyone you've got a cracking deal and I'm speaking cobblers.

Over to you (but I'm not holding my breath there will be any takers).

[Dagenham Rover]

What have I not read properly? You think you've got a good deal. I doubt that very much. You may be happy with it. That's up to you. I'm sure if you did a bit of number crunching you'd get a shock at just how much it's costing you compared to the alternatives.

The fact that you sorted it all out over the phone is a big sign that you've been ripped off.

However if you're happy and can afford it then good luck to you.

I just don't want people falling for the spin that PCP is a good way to finance a car. It most definitely isn't. It's very costly and there are better ways with a bit of effort as I've proved.

I'm not going to sit here argueing with you, however twice I have said both my recent ones have been 0% for me its worked out cheaper and better value so you could number crunch all you want i.e car retails at 15000 thats what I end up paying,  so I pay say 10 grand over three years interest free and at the end I pay the other 5 grand = £15000 the initial retail price. However the dealer wants to shift another motor if possible so he would say allow 7,500 on the old which equates to a £2500 deposit on a new motor, yes I know all about discounts for cash etc etc

Its not for everyone but
Do your homework and time it right to take advantage of any 0% deals etc it can work in your favour

[GazLaz]

Nothing is really 0% finance. You just pay over the odds in the first place.

[bobjimwilly]

Oh dear. Sounds like someone's been the victim of a PCP miss selling scandal and has only just realised it. I bet the car salesmen love it when they see you approaching. I tend to have the opposite effect on salesmen. You can see the colour draining from their faces as I approach as they know if a deal is done they will have been screwed into the ground.

Challenge. Anyone on a PCP deal put your details on this thread and I will demonstrate how much of a mug you've been taken for. On the other hand it would also give you the opportunity to prove to everyone you've got a cracking deal and I'm speaking cobblers.

Over to you (but I'm not holding my breath there will be any takers).

Wrong again. Never personally had a car on PCP, or hire purchase, or even via a loan. But keep telling people you know everything if it makes you feel better...

[Dagenham Rover]

Nothing is really 0% finance. You just pay over the odds in the first place.

Not necessarily, as I say do your homework!

Its not for everybody but it can work

[Mr1Croft]

It all depends on the person really. If your looking to own the car at the end of it then hire purchase is usually the best finance option, you could also look at a bank loan as the chances are you'll get a much better interest rate.

PCPs are usually more beneficial towards people who are looking to change their car more regularly. Its much lower payments than Hire Purchase and in 3 years (dependant on the specific deal) you can change the car.

I would advise to do your research though, people can often assume that the GFV (Guaranteed Future Value) is more than what the car would br worth so they have equity available for a new car deposit, which may or may not be the case depending on the specific deal you get. Depreciation for new cars is astonishing, only agree if your happy with what your offered.

There is always the milage to consider, usually around 5-8000 per annum and a hefty 10-15p per Mile which exceeds it. Again, take time to work out a realistic milage to see whether PCP is for you.

Read everything your given and ask questions if you don't understand. The Motor Trade is often given a bad name for car sales but a lot of the time people believe they were ripped off because they misunderstood and never asked.

[IC1967]

Nothing is really 0% finance. You just pay over the odds in the first place.

Absolutely right. For example a typical family car, say a Mazda 3 is currently £17,955 list price. If you take out a PCP deal on 0% finance you will get the car at £17,455 as Mazda give you £500 deposit contribution. Great you think. That's a cracking deal. But guess what. If you bought the car outright there are dealers out there that will sell you one for cash at £15,445 (that's before you do any haggling, I'd get at least another £500 off that). So realistically that car is available for £14,955.

Now if you were truly getting 0% finance you should be able to say to the dealer can I have the PCP deal at £14,955 as that's what I can get the car for elsewhere. No way will they do this. They'll only let you have the PCP deal at a buying price of £17,455. So even though you are supposedly getting 0% finance you're not as you are paying £2,500 more than you need to just to get the PCP deal. So in effect you are paying £2,500 'interest'. That's at a rate of 14.3% not 0%.

Unfortunately the vast bulk of new car sales are now done on PCP. My advice would be steer clear. However if you still go ahead then at least do one thing. Do not under any circumstances trade your old car in. You will make much more money selling it privately. At least then you will be limiting the damage to your finances.

[hoolahoop]

PCP is a good deal - for the dealer. Let me know what the car is and annual mileage and I'll suss out the best way for you to get what you want. I'll give you the best options and the costs. It is another field in which I'm an expert.

My initial reaction though is that PCP is not the way forward from a financial perspective.

Spouting crap again I see.

I have been in the Motor Industry for over 20 years and believe me it IS the most commercially viable way to buy a car whether you have the cash for an outright purchase or not.

I and many fellow colleagues as well as friends, family and mates from this forum purchase this way every time.

Whenever an industry is trying to maximise their sales by using their loyal customer basis ....they pay for the privilege. It's basic common sense, there are less marketing costs involved so a little taken of each customer on a regular basis is far better than the fortunes spent advertising to rip customers away from rival brands. The customer simply trots in after presumably being satisfied with their previous purchase and drives away in their new car .
Financing a car is generally far less cheaper than conventional HP  because the customer is deemed more reliable and a more frequent purchaser of their product . If you like the HP or cash customer is considered a higher risk in that they tend to be more nomadic n.b please remember that you don't have to go back to that franchise and that you still have the option to outright purchase the vehicle at any stage. There will be penalties of course should you walk away and then settle up having received a deposit allowance to take up the product.

It's a win-win for both parties and more so for the customer who has taken advantage of the presumed future loyalty bonuses of lower interest rates and/or deposit allowances who can still play the "open" market .

Only fools would deem this system of purchase in any way not viable but they ,.....,.........are soon parted from their money. I notice we have one such fella above. Pmsl.

[hoolahoop]

Filo's pretty accurate in his summary.  Dealers love PCP, hate cash buyers.  Getting someone on a PCP and fully up with extras like Gap is a salesman's wet dream.  It will get you into a car which looks cheap to start with, that you will realistically never own because of the balloon payment at the the end and you need to be really careful on mileage restrictions especially if you're doing more than the average.

Rios you are entirely wrong and that,'s the reason why inscrutable or at best very dodgy small garages or chains for that matter will do their best to swerve their customers well away from them.

I'm a car salesman and I take exception to the way you cast my industry in such a bad light   BTW you are just plain wrong and you were probably told that by a salesman who neither understands the product or thought he could make some money out of you peddling such crap.

As a final word , the customer has the right to set their own mileage restrictions at the outset. It is obvious that if the dealer assumes that you will do 30k over 3 years and you bring the car back to him with 50k on the clock then it has a lower value !!