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  • FIRST POST
    • rjwr
    • By rjwr 25th Jun 17, 9:45 AM
    • 282Posts
    • 186Thanks
    rjwr
    Paying off PCP or keeping the vehicle
    • #1
    • 25th Jun 17, 9:45 AM
    Paying off PCP or keeping the vehicle 25th Jun 17 at 9:45 AM
    Hi all,

    another pcp question. Our local mini dealer sent me a marketing letter asking to buy our car. This is a letter which would have gone out to many mini owners, so not just my particular car.

    I've called with curiosity and im left with a decision as follows:

    Mini dealer has offered £8000 for the mini
    I would need to pay £1500 to clear the agreement

    £1500 is roughly 6 months payments including insurance and tax

    My wife mainly uses the car as i have a fully expensed company car. She doesn't need a vehicle so when i say uses it, its very infrequent.

    Selling the car back to the dealer if you will, means i have reduced my debt to just a mortgage, but in return my wife loses the use of a car.

    £220/month plus fuel is a lot of taxi/bus fare.

    At the end of the agreement we will be giving the car back anyway, we have two years left, so 24 x £220.

    Any advice welcome
    But never spend money you don't have to buy things you don't want to impress people you don't like.
    .
    Originally posted by kidmugsy
Page 1
    • Tarambor
    • By Tarambor 25th Jun 17, 11:10 AM
    • 1,148 Posts
    • 796 Thanks
    Tarambor
    • #2
    • 25th Jun 17, 11:10 AM
    • #2
    • 25th Jun 17, 11:10 AM
    OK so you say your wife only uses it infrequently. What is the mileage it does a year? I ask as unless she sits in the house all day when you're at work she's likely to be using it.

    Would your wife accept having an older cheaper car as a runaround? Could you fund buying one outright?

    Does the £1500 "ending the agreement" leave you owning the car or is there a "buy" payment at the end?

    £8000 offered without seeing the vehicle is likely to end up being a lot less when you actually turn up.
    • rjwr
    • By rjwr 25th Jun 17, 3:15 PM
    • 282 Posts
    • 186 Thanks
    rjwr
    • #3
    • 25th Jun 17, 3:15 PM
    • #3
    • 25th Jun 17, 3:15 PM
    nope, its £1500 to the dealer plus the car. We get nothing other than not having any debt.

    Two years from now, we still get nothing, but have £7000 left on the car.... pcp for you.

    They have seen the vehicle, so its not an offer without seeing it.

    my wife doesn't need a car. she didnt want the car in the first place, i wanted her to have freedom, but in reality she has less freedom now, as she feels pressure to drive and doesnt want too.
    But never spend money you don't have to buy things you don't want to impress people you don't like.
    .
    Originally posted by kidmugsy
    • AnotherJoe
    • By AnotherJoe 25th Jun 17, 6:54 PM
    • 7,228 Posts
    • 7,740 Thanks
    AnotherJoe
    • #4
    • 25th Jun 17, 6:54 PM
    • #4
    • 25th Jun 17, 6:54 PM
    So you can either pay £1500 now to get rid of a car you don't want, or £5,280 (£220 x 24) ( plus tax, insurance, petrol?)

    If that's the choice I'm not sure why you are even thinking about it. Did I misunderstand something ?
    • Mutton Geoff
    • By Mutton Geoff 25th Jun 17, 8:52 PM
    • 865 Posts
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    Mutton Geoff
    • #5
    • 25th Jun 17, 8:52 PM
    • #5
    • 25th Jun 17, 8:52 PM
    Any details on the mini so our car pricing experts can give an idea. Chopping a car into a dealer without buying anything from them is usually the worst way of selling a car regardless of the fact this is packaged to you as a way out.


    Is the PCP closure incentivised or can you just pay them off anyway? Could you sell the car for (much) more privately and be, say, £1,000-£1,500 better off thus saving yourself more.
    Compensations/Refunds from Banks & Institutions - £4,165 | Stooz Profits - £7,636 | Quidco - £3,963

    All with a big thank you to Martin and MSE.com from Mutton Geoff!
    • robber2
    • By robber2 25th Jun 17, 11:13 PM
    • 255 Posts
    • 203 Thanks
    robber2
    • #6
    • 25th Jun 17, 11:13 PM
    • #6
    • 25th Jun 17, 11:13 PM
    I'd take the offer from the dealer and buy a banger for £500 for the occaasional trip that your wife makes. Im guessing she can drive your company car if she has a significant journey to make?
    • AnotherJoe
    • By AnotherJoe 26th Jun 17, 11:57 AM
    • 7,228 Posts
    • 7,740 Thanks
    AnotherJoe
    • #7
    • 26th Jun 17, 11:57 AM
    • #7
    • 26th Jun 17, 11:57 AM
    I'd take the offer from the dealer and buy a banger for £500 for the occaasional trip that your wife makes. Im guessing she can drive your company car if she has a significant journey to make?
    Originally posted by robber2
    It would be cheaper and less hassle to rent or get trains/taxis.

    A "£500 banger "will still cost a grand in the first year and probably £500 ongoing a year. That's a lot of trains and taxis.
    Last edited by AnotherJoe; 26-06-2017 at 1:02 PM.
    • rjwr
    • By rjwr 29th Jun 17, 7:30 PM
    • 282 Posts
    • 186 Thanks
    rjwr
    • #8
    • 29th Jun 17, 7:30 PM
    • #8
    • 29th Jun 17, 7:30 PM
    it might sound odd but my wife does not need a car. she only took her test through family pressure. absolutely hates driving, is physically frightened. any long journeys i drive, fuel is free for me.

    ive gone with selling the car back to the dealer. despite costing me £1500, im now out of debt apart from the mortgage.
    thanks for your help
    But never spend money you don't have to buy things you don't want to impress people you don't like.
    .
    Originally posted by kidmugsy
    • rjwr
    • By rjwr 10th Jul 17, 7:37 PM
    • 282 Posts
    • 186 Thanks
    rjwr
    • #9
    • 10th Jul 17, 7:37 PM
    • #9
    • 10th Jul 17, 7:37 PM
    ok, so car went today. Thats £9000 weve spent in two years with insurance and tax and nothing to show for for it!!

    thank you for your help
    But never spend money you don't have to buy things you don't want to impress people you don't like.
    .
    Originally posted by kidmugsy
    • MataNui
    • By MataNui 12th Jul 17, 10:03 AM
    • 807 Posts
    • 407 Thanks
    MataNui
    Normally it annoys me a bit when people get all high and mighty about whether you 'need' a car or not or what sort of car you 'need', but in this case not only does your wife not 'need' the car but she didn't even want it in the first place.

    That would be a bit frustrating. Your right about PCP too. Its rarely the most suitable finance option yet its becoming the most common by a long way. Looking around on autotrader and the number of traders who are only offering PCP type finance is unbelievable. It really seems like financial suicide, particularly on used cars.
    • rjwr
    • By rjwr 24th Jul 17, 10:00 PM
    • 282 Posts
    • 186 Thanks
    rjwr
    yep thats correct. Weve been managing more than ok since the car has gone.

    Agree with the PCP comment, hence us paying to get out of it.
    But never spend money you don't have to buy things you don't want to impress people you don't like.
    .
    Originally posted by kidmugsy
    • chanz4
    • By chanz4 25th Jul 17, 10:11 PM
    • 9,876 Posts
    • 2,871 Thanks
    chanz4
    its going to be the next missold I think, its not explained well at all
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
    • pmartin86
    • By pmartin86 25th Jul 17, 11:52 PM
    • 441 Posts
    • 230 Thanks
    pmartin86
    [QUOTE=MataNui;72826455]
    That would be a bit frustrating. Your right about PCP too. Its rarely the most suitable finance option yet its becoming the most common by a long way. Looking around on autotrader and the number of traders who are only offering PCP type finance is unbelievable. It really seems like financial suicide, particularly on used cars.[/]

    I dont want to argue unneccassarily, and you entitled to your opinion, but that sweeping statment, is in my opinion, !!!!!!!!.

    I personaly would say that for a large proprtion of people, PCP is an entire suitable option if all the pros and cons are considered, as opposed to the "Ohh shiny car, i want!" Attitude. I personaly beleive the main issue with PCP is the fact its heavily incetived for the salesmen and heavily weighed to be "one low payment" for people who can't see the big picture.

    I use myself as an example, I have a reasonable disposable income a month, I drive aproxx 40,000 miles a year (work and business) yes I have got a deal thats costs me less than £200 a month plus a one off "£350 for 3 years service" fee. I know that having a relible car Ive got a guranteed handin price for in 3 years which will effectivly be a deposit on the next car is great.

    While I understand that my situation is unique, im sure there are several examples of where PCP is mutualy beneficial.
    • phillw
    • By phillw 26th Jul 17, 12:28 AM
    • 801 Posts
    • 400 Thanks
    phillw
    Your right about PCP too. Its rarely the most suitable finance option yet its becoming the most common by a long way.
    Originally posted by MataNui
    PCP itself isn't a problem. Most of the time they are 0%, so your payment is just the depreciation of the car. If anything the problem is that they have made buying new cars too affordable, like interest only mortgages.

    Most new car owners don't need a new car, they just want it.
    • rjwr
    • By rjwr 26th Jul 17, 6:58 AM
    • 282 Posts
    • 186 Thanks
    rjwr
    [QUOTE=pmartin86;72891299]
    That would be a bit frustrating. Your right about PCP too. Its rarely the most suitable finance option yet its becoming the most common by a long way. Looking around on autotrader and the number of traders who are only offering PCP type finance is unbelievable. It really seems like financial suicide, particularly on used cars.[/]

    I dont want to argue unneccassarily, and you entitled to your opinion, but that sweeping statment, is in my opinion, !!!!!!!!.

    I personaly would say that for a large proprtion of people, PCP is an entire suitable option if all the pros and cons are considered, as opposed to the "Ohh shiny car, i want!" Attitude. I personaly beleive the main issue with PCP is the fact its heavily incetived for the salesmen and heavily weighed to be "one low payment" for people who can't see the big picture.

    I use myself as an example, I have a reasonable disposable income a month, I drive aproxx 40,000 miles a year (work and business) yes I have got a deal thats costs me less than £200 a month plus a one off "£350 for 3 years service" fee. I know that having a relible car Ive got a guranteed handin price for in 3 years which will effectivly be a deposit on the next car is great.

    While I understand that my situation is unique, im sure there are several examples of where PCP is mutualy beneficial.
    Originally posted by MataNui

    I wouldn't hold out for any equity left in the car you have. I wouldn't be surprised between now and then if it wipes it out completely. Look at the bank of England and their comments regarding pcp.
    But never spend money you don't have to buy things you don't want to impress people you don't like.
    .
    Originally posted by kidmugsy
    • MataNui
    • By MataNui 26th Jul 17, 8:17 AM
    • 807 Posts
    • 407 Thanks
    MataNui
    We need to make a distinction here. There is PCP commonly offered on new cars which is nothing new. Then there is PCP being offered as a means to purchase used cars which is a rapidly growing trend. PCP rates on new cars can indeed by 0% (if you are lucky and i wouldnt suggest anyone turns down 0%). PCP deals on used cars though (even from franchised dealers) are typically around the 9-10.5% mark and i saw one this weekend at 24%. This seems nuts to me.

    Also have a look at how these things are marketed. Look around autotrader and you wonder what some of these places are actually selling. The photos (meant to be of the car) are every other image being an advert 'Low rate finance', 'Guaranteed finance' etc.
    • spikyone
    • By spikyone 26th Jul 17, 8:32 AM
    • 404 Posts
    • 567 Thanks
    spikyone
    I wouldn't hold out for any equity left in the car you have. I wouldn't be surprised between now and then if it wipes it out completely. Look at the bank of England and their comments regarding pcp.
    Originally posted by rjwr
    Not necessarily, it all depends on the car. Whilst some manufacturers (VW, BMW) use cheap monthlies to hook the unwary, leaving them with a balloon payment worth more than the car and perpetuating the PCP trap, I will have about £3-£4k of equity at the end of my PCP. Although if you look on Pistonheads you'll find plenty of whining that my car is "too expensive" because the monthlies on a Golf R are less, even though the VW is far more expensive overall. Which sort of proves that people really don't understand car financing because those people will have a balloon payment costing more than the car is worth when their PCP ends.
    Of course, in my case, it's bad for the dealer because I'll be paying off the balloon before deciding whether to keep my car or trade it for an interesting used car that looks like it's finished depreciating.

    As to your earlier comment, I rather take issue with this:

    ok, so car went today. Thats £9000 weve spent in two years with insurance and tax and nothing to show for for it!!
    Originally posted by rjwr
    "Nothing to show for it" is rather disingenuous. Your £9000 has paid for you/OH to have exclusive use of a brand new car for two years, plus the tax and insurance which would've likely cost even more had the car been older - not to mention the amount that you would've been spending on repairs, MOTs, and consumables. In two years you didn't need to replace tyres or brakes and it probably needed minimal maintenance. So you had plenty to show for it - it just wasn't what you wanted. Nowt wrong with that, but it doesn't make buying & owning a car some kind of a scam.
    • jimbo747
    • By jimbo747 26th Jul 17, 10:23 AM
    • 219 Posts
    • 588 Thanks
    jimbo747
    PCPs are great imo. Take out for 3 years, and then VT in last few months as the payments will be greater than depreciation by that point.

    Saying that, I'll be leasing next time come December, some cracking deals around.

    I'm not ashamed to admit I like new shiny things, and then get rid when it starts going wrong. If you can comfortably afford it, why not. Some people spend £50 a month just on a phone, or blow £100 on a night out each week. That £450 a month can buy and run a pretty decent car.
    • rjwr
    • By rjwr 30th Jul 17, 7:33 PM
    • 282 Posts
    • 186 Thanks
    rjwr
    Not necessarily, it all depends on the car. Whilst some manufacturers (VW, BMW) use cheap monthlies to hook the unwary, leaving them with a balloon payment worth more than the car and perpetuating the PCP trap, I will have about £3-£4k of equity at the end of my PCP. Although if you look on Pistonheads you'll find plenty of whining that my car is "too expensive" because the monthlies on a Golf R are less, even though the VW is far more expensive overall. Which sort of proves that people really don't understand car financing because those people will have a balloon payment costing more than the car is worth when their PCP ends.
    Of course, in my case, it's bad for the dealer because I'll be paying off the balloon before deciding whether to keep my car or trade it for an interesting used car that looks like it's finished depreciating.

    As to your earlier comment, I rather take issue with this:



    "Nothing to show for it" is rather disingenuous. Your £9000 has paid for you/OH to have exclusive use of a brand new car for two years, plus the tax and insurance which would've likely cost even more had the car been older - not to mention the amount that you would've been spending on repairs, MOTs, and consumables. In two years you didn't need to replace tyres or brakes and it probably needed minimal maintenance. So you had plenty to show for it - it just wasn't what you wanted. Nowt wrong with that, but it doesn't make buying & owning a car some kind of a scam.
    Originally posted by spikyone

    it wasn't new. I disagree, but you seem like the sort of person I could spend the next five weeks arguing with so ill take your comments and leave it there.

    But never spend money you don't have to buy things you don't want to impress people you don't like.
    .
    Originally posted by kidmugsy
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