pcp car deals

[IC1967]

Look. It's very simple. Most people on a PCP deal don't buy the car at the end of the deal. This being the case, leasing is almost certainly a better option. It is almost certainly cheaper.

I would wager that most car salesmen don't even mention leasing to you. They make more money from PCP and that is all they are bothered about.

Take my advice. If you are adamant that you want a new car every few years then leasing is almost certainly the cheaper option. The very least you should do is compare leasing with PCP before making your final decision. You'll probably have to do this yourself using the internet, as the salesman will be very keen to push you down the PCP route.

PCP should only be considered in the majority of cases if you intend to keep the car at the end of the deal.

Bear in mind that a car depreciates the most in the first 3 years. Financially it makes much better sense to buy a used car. By changing your car every 2 or 3 years you are paying a lot of depreciation on an ongoing basis.

The best way to think of a PCP deal is that your deposit and monthly payments are covering the depreciation of the car over the time period of the deal. Think about it that way and you can see just how much extra money you are paying for a new car compared to a perfectly good used car.

[BillyStubbsTears]

Hoola.

PM'd you mate. Bit of useful info.

[Dagenham Rover]

Hmmmm as you have brought leasing into the I argument I lease my work van and have the car personally on pcp I know which is the better value 😱

[IC1967]

Hmmmm as you have brought leasing into the I argument I lease my work van and have the car personally on pcp I know which is the better value 😱

You are comparing apples with pears. It is incontrovertible fact that leasing a car is cheaper than PCP in the vast majority of cases if you don't plan on owning the car at the end of the deal. Fact.

[Dagenham Rover]

erm I am comparing apples and pears?  you fetched leasing into the conversation so you are comparing apples and pears ,

[IC1967]

erm I am comparing apples and pears?  you fetched leasing into the conversation so you are comparing apples and pears ,

Van - apple. Car - pear. Got it, get it, good.

[hoolahoop]

Hoola.

PM'd you mate. Bit of useful info.

Got it fella and realised what was happening earlier hence the reason not to debate. Thanks fella he's being spamming and 'cutting and pasting ' for years...especially in political debates .

Mick pack it in , I'm trying to help folk cut through the jargon !!

[IC1967]

The voice of reason will not be silenced. I can't help it if I've got a photographic memory and can instantly recall information digested years ago. I sense silly Billy is very jealous of this ability of mine. He just makes stuff up instead.

More later.

[Dagenham Rover]

erm I am comparing apples and pears?  you fetched leasing into the conversation so you are comparing apples and pears ,

Van - apple. Car - pear. Got it, get it, good.

Pcp - apple. Lease- pear.  Got it, get it, good       

[Filo]

erm I am comparing apples and pears?  you fetched leasing into the conversation so you are comparing apples and pears ,

Van - apple. Car - pear. Got it, get it, good.

No you're talking rubish, everyone knows it's Van - pear. Car - apple

Trust me I'm an expert on the subject.

You've been comprehensively beaten again!

Now get that abject apology sorted and we'll say no more about it

[IC1967]

Right I think it's time for a pertinent example of the folly of PCP over buying outright. I'll do a lease v PCP later.

I bought a run around for the wife just over 3 years ago. I knew I was being stupid buying a brand new car but because I want her to be happy I thought it would be a nice little treat for her. The list price of the car was £22,000. The first thing I decided to do was buy it at a time of year when demand for a new car would be very sluggish. So I decided to buy it just after Christmas. The car in question was a 2 seater convertible sports car. Bit of advice for anyone thinking of buying a convertible. Always buy one in the depths of winter. This type of car is always more expensive the nearer to summer you get.

So my next step was to get this list price down by as much as possible. I knew I could get about £1000 off without too much trouble but I wanted a lot more than that. I decided to use the internet to find the cheapest price in the country. I used car brokers and Auto Trader. I found Auto Trader to be the best place to get the cheapest price. Now, the mileage the car is going to do is quite low (about 3000 per year) and we intended to keep the car for at least 5 years and probably longer.

So the next tactic I used was to compare the price of a pre-registered car to one that wasn't. I found I could get an non pre-registered car for £19,000. By getting a pre-registered car I could get that for £17,000. A whopping £5,000 reduction from the list price. For those of you that aren't as clued up as I am a pre-registered car is a new car but you will be the second owner of it. The garage will have bought it to meet sales targets and it will be registered to them. As we intended to keep the car for a good few years the fact that we would be the second owner wasn't an issue as we saved an extra £2,000.

I then compared a PCP deal to the deal I could get on the internet. I went to my local garage in Doncaster armed with proof of my best price off the internet. I was offered £1,500 manufacturer contribution, so that got the list price down to £20,500. The deal was over 42 months and the monthly payments with 0% finance were £350 per month (no deposit). The guaranteed minimum value was £5780.

So from an initial list price of £22,000 the value of the car would allegedly be only £5780 after 3 and a half years. That's depreciation of £16,220 or to put it another way around 75%!!! So I checked with Auto trader what a realistic price would be for the car after 3 and a half years. The figure I got was £11,000. So I got my calculator out and subtracted £11,000 from the cost price of £17,000. That meant over 3 and a half years the car had actually depreciated by £6,000. So next I divided £6,000 by 42 to get the monthly equivalent cost to the PCP deal. This figure came out at £142.86.

So there you have it a practical example of buying a new car for cash or on a PCP deal. For cash the monthly equivalent cost was £142.86. With PCP I'd have paid £350 per month. So I saved myself £207.14 per month or £8,700 over the 42 month period.

Now I know I could have sold the car on the PCP deal for more than the GMV so the figures wouldn't have looked quite as bad. However most of the suckers on these deals don't bother doing that and just accept the original GMV they've been offered and trade it in to get the next car.

I'm lucky. I'm wealthy. I can pay cash for cars. I know most people aren't in this position. If not then you should really be asking yourself the question should I really be buying a new car in the first place. If you insist on having a new car then you'd have to be on an extremely bad deal if you used a combination of a 0% credit card and a personal loan to still not come out way in front of a PCP deal.

[IC1967]

IC1967 just a point about being ripped off on your part exchange offers. There are a number of areas that perhaps you've never considered :-

1) Dealerships rarely if ever actively try to persuade customers to part exchange their car. In other words you aren't obliged to.

2) If they do it generally means they need your car for stocking purposes and will pay a premium rather than a 'rip off' price to get it. Yes it costs money to both purchase and refurbish cars for their used car pitch. If your car is one they want/need they will pay a premium.

3) You are NEVER obliged to part exchange a car as part of a deal even if it's included upto the collection date of your new car.

4) It is far easier to negotiate with you if the main area of contention i.e. the value of your existing car is removed from the equation. Dealerships won't treat you any differently.

5) Generally dealerships replenish their stocks of used cars wherever possible from existing customer's part exchanges i.e. cars they know the history of and serviced by them. This way they can prepare part exchanges far more quickly for sale. Time is money.

6) Sales managers with high or even positive trade car profits rarely keep their jobs for very long. It means they are very probably undervaluing cars and therefore allowing business to walk from their showrooms. Customers walking away mean wasted opportunities for sales and of course profit. Hmmm and hours of 'wasted' time by staff.

1) I never said dealers do act in this way. However there are a lot of customers that like to trade their car in because they can't be arsed to sell them privately. The part exchange is always a good way to lose money for the customer. It's obvious really. A dealer has got overheads to cover and has to charge 20% VAT. It's no wonder they offer a crap price compared to what could be got selling private. In my experience dealers don't actively dissuade people from part exchange by pointing out what I've just done.

2) Pay a premium? Are you having a laugh? Selling private is always going to get you the most money. If a premium is paid, then the dealer will offset this by not offering a discount on the new car.

3) Never said you were.

4) Maybe. However it is my experience that the car salesman will try and confuse the customer as much as possible to get the deal done. A part exchanged car adds another level of complexity that the salesman can use to his advantage. It is common to offer a premium on part exchange but then not to discount the new car as I've said above, conning the customer into thinking he's got a good deal.

5) Exactly. So the customer that does this loses out by not selling privately as you won't offer anywhere near what the car is really worth. This is understandable for the reasons pointed out earlier.

6) There is no such thing as a fair part exchange price. A part exchanged car is always under valued compared to the price that could be got privately.

So if salesmen were ethical, they would do their best not to do any part exchange deals. They would advise the customer that they were in most cases throwing away thousands of pounds if they were trading in a decent car. In my experience there aren't any ethical salesmen. If you were ethical you'd soon be out the door as your 'unethical' boss would not be very happy with you because your sales figures would not be as good as they could be because you weren't using all the tricks of the trade to dupe the customer into parting with as much money as possible.

[Filo]

IC1967 just a point about being ripped off on your part exchange offers. There are a number of areas that perhaps you've never considered :-

1) Dealerships rarely if ever actively try to persuade customers to part exchange their car. In other words you aren't obliged to.

2) If they do it generally means they need your car for stocking purposes and will pay a premium rather than a 'rip off' price to get it. Yes it costs money to both purchase and refurbish cars for their used car pitch. If your car is one they want/need they will pay a premium.

3) You are NEVER obliged to part exchange a car as part of a deal even if it's included upto the collection date of your new car.

4) It is far easier to negotiate with you if the main area of contention i.e. the value of your existing car is removed from the equation. Dealerships won't treat you any differently.

5) Generally dealerships replenish their stocks of used cars wherever possible from existing customer's part exchanges i.e. cars they know the history of and serviced by them. This way they can prepare part exchanges far more quickly for sale. Time is money.

6) Sales managers with high or even positive trade car profits rarely keep their jobs for very long. It means they are very probably undervaluing cars and therefore allowing business to walk from their showrooms. Customers walking away mean wasted opportunities for sales and of course profit. Hmmm and hours of 'wasted' time by staff.

1) I never said dealers do act in this way. However there are a lot of customers that like to trade their car in because they can't be arsed to sell them privately. The part exchange is always a good way to lose money for the customer. It's obvious really. A dealer has got overheads to cover and has to charge 20% VAT. It's no wonder they offer a crap price compared to what could be got selling private. In my experience dealers don't actively dissuade people from part exchange by pointing out what I've just done.

2) Pay a premium? Are you having a laugh? Selling private is always going to get you the most money. If a premium is paid, then the dealer will offset this by not offering a discount on the new car.

3) Never said you were.

4) Maybe. However it is my experience that the car salesman will try and confuse the customer as much as possible to get the deal done. A part exchanged car adds another level of complexity that the salesman can use to his advantage. It is common to offer a premium on part exchange but then not to discount the new car as I've said above, conning the customer into thinking he's got a good deal.

5) Exactly. So the customer that does this loses out by not selling privately as you won't offer anywhere near what the car is really worth. This is understandable for the reasons pointed out earlier.

6) There is no such thing as a fair part exchange price. A part exchanged car is always under valued compared to the price that could be got privately.

So if salesmen were ethical, they would do their best not to do any part exchange deals. They would advise the customer that they were in most cases throwing away thousands of pounds if they were trading in a decent car. In my experience there aren't any ethical salesmen. If you were ethical you'd soon be out the door as your 'unethical' boss would not be very happy with you because your sales figures would not be as good as they could be because you weren't using all the tricks of the trade to dupe the customer into parting with as much money as possible.

I'm not reading that, it's too long, but you're wrong anyway.

Comprehensivly beaten again, sort your abject apology out and we'll consider the matter over!

[BobG]

Surely one abject apology would be massively insufficient Filo? He's got sooo damn much to apologise for after all.

Being alive being one of them...

BobG

[hoolahoop]

IC1967 just a point about being ripped off on your part exchange offers. There are a number of areas that perhaps you've never considered :-

1) Dealerships rarely if ever actively try to persuade customers to part exchange their car. In other words you aren't obliged to.

2) If they do it generally means they need your car for stocking purposes and will pay a premium rather than a 'rip off' price to get it. Yes it costs money to both purchase and refurbish cars for their used car pitch. If your car is one they want/need they will pay a premium.

3) You are NEVER obliged to part exchange a car as part of a deal even if it's included upto the collection date of your new car.

4) It is far easier to negotiate with you if the main area of contention i.e. the value of your existing car is removed from the equation. Dealerships won't treat you any differently.

5) Generally dealerships replenish their stocks of used cars wherever possible from existing customer's part exchanges i.e. cars they know the history of and serviced by them. This way they can prepare part exchanges far more quickly for sale. Time is money.

6) Sales managers with high or even positive trade car profits rarely keep their jobs for very long. It means they are very probably undervaluing cars and therefore allowing business to walk from their showrooms. Customers walking away mean wasted opportunities for sales and of course profit. Hmmm and hours of 'wasted' time by staff.

1) I never said dealers do act in this way. However there are a lot of customers that like to trade their car in because they can't be arsed to sell them privately. The part exchange is always a good way to lose money for the customer. It's obvious really. A dealer has got overheads to cover and has to charge 20% VAT. It's no wonder they offer a crap price compared to what could be got selling private. In my experience dealers don't actively dissuade people from part exchange by pointing out what I've just done.

2) Pay a premium? Are you having a laugh? Selling private is always going to get you the most money. If a premium is paid, then the dealer will offset this by not offering a discount on the new car.

3) Never said you were.

4) Maybe. However it is my experience that the car salesman will try and confuse the customer as much as possible to get the deal done. A part exchanged car adds another level of complexity that the salesman can use to his advantage. It is common to offer a premium on part exchange but then not to discount the new car as I've said above, conning the customer into thinking he's got a good deal.

5) Exactly. So the customer that does this loses out by not selling privately as you won't offer anywhere near what the car is really worth. This is understandable for the reasons pointed out earlier.

6) There is no such thing as a fair part exchange price. A part exchanged car is always under valued compared to the price that could be got privately.

So if salesmen were ethical, they would do their best not to do any part exchange deals. They would advise the customer that they were in most cases throwing away thousands of pounds if they were trading in a decent car. In my experience there aren't any ethical salesmen. If you were ethical you'd soon be out the door as your 'unethical' boss would not be very happy with you because your sales figures would not be as good as they could be because you weren't using all the tricks of the trade to dupe the customer into parting with as much money as possible.

I too am not reading that sh8te either , where do you get all this nonsense from....don't answer I dread to think. BTW I'm still not rising to your ill-informed posts.

You need help and quickly .

[silent majority]

Somebody needs serious help!

[IC1967]

Somebody needs serious help!

You're right. Let's hope BobG gets it sooner rather than later.