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  • FIRST POST
    • t45
    • By t45 12th Oct 16, 11:08 AM
    • 50Posts
    • 4Thanks
    t45
    PCP plan
    • #1
    • 12th Oct 16, 11:08 AM
    PCP plan 12th Oct 16 at 11:08 AM
    Hello,
    Looking to buy a new car - went to dealer and like a car priced 6800.
    Tey have offered a PCP deal (I have no idea about these - ive never financed a car) and have said to me this would be good.
    Car is priced 6800.
    I have put down 500 deposit
    Have arranged to go back and put down another 1000k as the payment
    So I put down a total of 1500
    They have asked that I pay 36 mthly payments of 120 followed by a balloon payment of, If I remember, about 3600 at the end of the 3 years
    I am covered for alloys, paintwork, MOT for 3 years
    After the 3 years I can return the car, keep the car (I assume buy it outright) or trade it in for a new car....
    I said I could pay for the car outright and or put down a bigger payment and they kept saying this package would be best - think they could see I had no idea about PCP.
    My question: would I be best for me to put down more money and lower my monthly payments or balloon payment?
    I understand that the salesman is on commission.
    Also, even though I have signed some draft paperwork and filled in a finance form that asked employment and residency questions - can I still go back to them and ask to put down more money? I feel that for some reason they are pushing me into this plan when I have said I would like
    to put down more....
Page 1
    • Oakdene
    • By Oakdene 12th Oct 16, 11:12 AM
    • 502 Posts
    • 678 Thanks
    Oakdene
    • #2
    • 12th Oct 16, 11:12 AM
    • #2
    • 12th Oct 16, 11:12 AM
    What are they offering you as extra with the PCP, sometimes you get a years insurance, 2 years free servicing etc... if they haven't offered anything then say you'll pay cash as its not worth the hassle,
    • missile
    • By missile 12th Oct 16, 11:14 AM
    • 8,319 Posts
    • 3,948 Thanks
    missile
    • #3
    • 12th Oct 16, 11:14 AM
    • #3
    • 12th Oct 16, 11:14 AM
    The dealer makes money selling you finance.
    For some it can be advantageous, for many it is not.
    From your figures it would appear that you will pay a total of £9,420 for a car with a sticker price of £6800? That seems a very expensive "deal"
    You seem unsure of these figures, you should ask for confirmation in writing.
    What is the car?
    MOT is not required until the car is 3 years old.
    Last edited by missile; 12-10-2016 at 11:18 AM.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home
    • t45
    • By t45 12th Oct 16, 11:21 AM
    • 50 Posts
    • 4 Thanks
    t45
    • #4
    • 12th Oct 16, 11:21 AM
    • #4
    • 12th Oct 16, 11:21 AM
    thank you all so much.
    as far as I can see they are
    The car is a 2015 Fiat 500
    They are offering the wheel/alloy cover, a 'gap cover' and MOT and servicing for 3 years
    It all seemed very complicated to me and I have signed one set of papers and have a receipt for 500 that I paid a couple of days ago - can they hold me to this or can I:
    a) pull out of the sale
    b) as to pay more cash up front or buy the car outright
    I will ask for confirmation in writing - thank you for flaggin that up - all I have is a receipt and I have only put down a deposit
    • Oakdene
    • By Oakdene 12th Oct 16, 11:27 AM
    • 502 Posts
    • 678 Thanks
    Oakdene
    • #5
    • 12th Oct 16, 11:27 AM
    • #5
    • 12th Oct 16, 11:27 AM
    Servicing will cost around £450-£500 for two services...

    Its your choice but if you've got enough to buy the car outright I'd take the PCP & pay it off the next day by bank transfer to the finance that way you keep the servicing & GAP but you wont incur a silly amount of interest
    • neilmcl
    • By neilmcl 12th Oct 16, 11:41 AM
    • 8,603 Posts
    • 5,618 Thanks
    neilmcl
    • #6
    • 12th Oct 16, 11:41 AM
    • #6
    • 12th Oct 16, 11:41 AM
    thank you all so much.
    as far as I can see they are
    The car is a 2015 Fiat 500
    They are offering the wheel/alloy cover, a 'gap cover' and MOT and servicing for 3 years
    It all seemed very complicated to me and I have signed one set of papers and have a receipt for 500 that I paid a couple of days ago - can they hold me to this or can I:
    a) pull out of the sale
    b) as to pay more cash up front or buy the car outright
    I will ask for confirmation in writing - thank you for flaggin that up - all I have is a receipt and I have only put down a deposit
    Originally posted by t45
    What's the quoted APR?

    I'd reckon you likely be better off with a bank loan for that car.

    I've taken out PCP finance in the past, on new cars only, but I never consider one unless I was getting somewhere between 18%-20% off the retail.
    Last edited by neilmcl; 12-10-2016 at 11:43 AM.
    • t45
    • By t45 12th Oct 16, 11:44 AM
    • 50 Posts
    • 4 Thanks
    t45
    • #7
    • 12th Oct 16, 11:44 AM
    • #7
    • 12th Oct 16, 11:44 AM
    Thank you Oakdene - very helpful - im not very good at these things and do not understand the pros and pitfalls of pcps - ...
    so how does this work:
    I purchase the package that they have offered at 36 x 120 payments with all of the covers and then the next day do I pay off with the balloon payment?
    Would it be best to wait a month and then pay it off?
    So in effect I sign up to the PCP package and then pay it off but keep the covers etc....
    So I would keep the servicing and GAP?
    With these packages, am I right to think you can actually pay them off within the 3 year period? But what about the balloon payment?
    • t45
    • By t45 12th Oct 16, 11:46 AM
    • 50 Posts
    • 4 Thanks
    t45
    • #8
    • 12th Oct 16, 11:46 AM
    • #8
    • 12th Oct 16, 11:46 AM
    thanks you neil - I think APR is 11% or thereabout - im really not good at any of this - the saleperson just said it's a good deal!
    The car is 2015 - small fiat, had 17,000 miles
    I can purchase the car outright - I kept saying this to the salesman
    I have signed a paper and have a receipt for my 500 deposit and Im supposed to be going back today to put down the extra 1k
    It's not a new car -
    they aid that I am getting an almost brand new car at second hand price!
    • Oakdene
    • By Oakdene 12th Oct 16, 11:53 AM
    • 502 Posts
    • 678 Thanks
    Oakdene
    • #9
    • 12th Oct 16, 11:53 AM
    • #9
    • 12th Oct 16, 11:53 AM
    Thank you Oakdene - very helpful - im not very good at these things and do not understand the pros and pitfalls of pcps - ...
    so how does this work:
    I purchase the package that they have offered at 36 x 120 payments with all of the covers and then the next day do I pay off with the balloon payment?
    Would it be best to wait a month and then pay it off?
    So in effect I sign up to the PCP package and then pay it off but keep the covers etc....
    So I would keep the servicing and GAP?
    With these packages, am I right to think you can actually pay them off within the 3 year period? But what about the balloon payment?
    Originally posted by t45
    No, you phone up & you will pay the contract amount, which I assume will be the amount borrowed, don't wait a month as you will be paying interest but yes you do pay it off & keep the covers, The only negative to this is that the sales exec will have the commission clawed backed from them.

    You can pay the balance off at any time in the 3 years but it's best to do it as soon as you can if you can afford to.
    • neilmcl
    • By neilmcl 12th Oct 16, 11:54 AM
    • 8,603 Posts
    • 5,618 Thanks
    neilmcl
    Thank you Oakdene - very helpful - im not very good at these things and do not understand the pros and pitfalls of pcps - ...
    so how does this work:
    I purchase the package that they have offered at 36 x 120 payments with all of the covers and then the next day do I pay off with the balloon payment?
    Would it be best to wait a month and then pay it off?
    So in effect I sign up to the PCP package and then pay it off but keep the covers etc....
    So I would keep the servicing and GAP?
    With these packages, am I right to think you can actually pay them off within the 3 year period? But what about the balloon payment?
    Originally posted by t45
    No, you don't pay of the balloon, you pay of what's owed, which in this case would be the rest of the invoice, plus potentially a small bit of interest.

    The longer you wait to "settle" the finance the more interest you'll have to pay. Legally you cancel the finance altogether within 14 days and just pay off the rest of the car.
    Last edited by neilmcl; 12-10-2016 at 11:57 AM.
    • t45
    • By t45 12th Oct 16, 11:58 AM
    • 50 Posts
    • 4 Thanks
    t45
    thank you - youre so helpful but im a bit of a dim wit - i can see that its best not to go down the full 3 year term an dthen pay thr 3.5ish balloon at the end.
    Do I:
    1. go for PCP and then next day call them up and pay - thank you oakdene for this idea and get the perks - the Gap Cover etc but no tthe long term interest acrued and the slaesman gets little commission
    2. just go in and buy the car
    I have signed something an d filled out sinance forms so im not sure if they can hold me to this - there was 3 salespeople standing around the desk, practically hovering when I was signing - i was by myself and it felt awful - quite pressurising - the car is lovely but Im concerned that this i snot the right package for me given that i could buy the car outright
    • t45
    • By t45 12th Oct 16, 12:00 PM
    • 50 Posts
    • 4 Thanks
    t45
    ..so the quicker one pays it off the better!...ie within a day as oakdene has suggested....but i sign up for the pcp package and drive the car away this week an dthen call the next day after Ive driven it away - i guess that's when my transcation woul dbe complete???
    • BeenThroughItAll
    • By BeenThroughItAll 12th Oct 16, 12:12 PM
    • 3,463 Posts
    • 2,773 Thanks
    BeenThroughItAll
    It's only worth taking it and paying it off if you're actually getting something out of it. Read the paperwork and I bet you're not getting any of these pointless insurances actually thrown in. They'll simply be adding the price of them to the screen price and financing the whole lot.
    • t45
    • By t45 12th Oct 16, 12:27 PM
    • 50 Posts
    • 4 Thanks
    t45
    ...I assume that is I did sign for the PCP and then pay it off the next day, I assume that I would have to pay an extra fee for settling
    • t45
    • By t45 12th Oct 16, 12:28 PM
    • 50 Posts
    • 4 Thanks
    t45
    I assume I can pull out of this pcp even though I have put down a deposit? I wonder if this is refundable?
    • tykesi
    • By tykesi 12th Oct 16, 12:36 PM
    • 1,405 Posts
    • 1,767 Thanks
    tykesi
    Seriously? You didn't think to ask these questions BEFORE leaving a deposit? I appreciate you keep saying you're a dimwit but the only way to avoid being one is by learning about these things before committing to buy.

    Your deposit might be refundable, you'll need to check the T&Cs you agreed to when you paid it. And stop believing every word a car salesman says. They are not your friend, they are not there to help you and they certainly don't want to give the best deal for YOU, they want the best deal for THEM.
    • t45
    • By t45 12th Oct 16, 12:36 PM
    • 50 Posts
    • 4 Thanks
    t45
    The APR on this vehicle is:


    APR 11.9%
    rate of interest (fixed) 11.23%


    Is it just going to be better and easier with no hassle to just buy the car upfront?
    They have 500 deposit and I am supposed to be going back to put down another 1K
    • dannyrst
    • By dannyrst 12th Oct 16, 1:07 PM
    • 1,228 Posts
    • 587 Thanks
    dannyrst
    Am I missing something here?

    You went to buy a car for cash at £6800.

    You ended up buying a car on finance with a £1,500 deposit, 36 payments of £120, and a balloon payment of £3600? That makes £9,420!
    • t45
    • By t45 12th Oct 16, 1:09 PM
    • 50 Posts
    • 4 Thanks
    t45
    i have only put down a deposit
    I feel really stupid
    I had no idea but it's not good
    I am goiung to see what I can ref this deposit and purchase the car on cash
    • Oakdene
    • By Oakdene 12th Oct 16, 1:12 PM
    • 502 Posts
    • 678 Thanks
    Oakdene
    i have only put down a deposit
    I feel really stupid
    I had no idea but it's not good
    I am goiung to see what I can ref this deposit and purchase the car on cash
    Originally posted by t45
    If you sign up for the PCP & cancel quickly, i.e. within a couple of days you will pay near the screen price for the car (just a tiny bit of interest added) but you will still get the free services included & have the cover of GAP insurance.
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