Ford Options

Amme

Hi,

I am thinking about buying a car on the Ford Options Finance but I'm not quite understanding how it works???

Say I put down a £9000 deposit on a £24000 car, make payments over 2 years, what happens to my deposit if I deside to hand the car back after 2 years & not switch it for another?

Thanks

danielanthony

You have the option to buy the car or hand it back, your deposit is eaten by the depreciation.

CLAPTON

it's gone to the car junk yard in the sky.

Amme

Does not sound like a good deal after all,

Thanks. :eek:

pheonixrising21

in my opinion, PCPs are the best way to finance a new car if you plan on swapping at the end of the term, as it reduces the monthly payments.

PCP's offer you a guaranteed minimum future value which the company believe the car will be worth at the end of the term with the agreed amount of miles on the clock. They are usually pretty conservative with the estimates as they want you come back in 2/3 years and buy a new one. if they over estimate the GMFV, you can just walk away and they are left with a car worth less than the remaining balloon, so they take the loss. They don't want that!

They should have told you that in 2 years, your car will have a GMFV of (lets say £10000). In 2 years time when the plan is over, you have the three options.

1) You pay (or re-finance) the balloon payment (£10000 in this case) and the car is yours.
2) you trade in for a new one. They value your car and any equity is put in a full or part deposit for the new one
3) you walk away. If the car is worth more than the GMFV, they should give you the equity in cash. In this option, they will also charge you if you go over the mileage you agree to at the start, anywhere between 4 an 19p per mile.

You will NOT lose the deposit through the scheme itself. You will lose it in the depreciation of the car, but this is the same for ALL car deals. It doesn't matter if its a new car, a used car, a HP plan or a PCP plan, they all depreciate in value.

Just out of interest, why would you walk away after the two years? Do you plan on not needing a car in two years time? I assume you know that PCP's are transferable between dealers and brands i.e. if you dont want another Ford in two years, you can take the car to Citroen and ask for a part-ex valuation , just like a HirePurchase plan?

If you plan on not having a car at all after two years, HP is probably better. That way once the plan is over, the car is yours and you can sell it if you want. Your monthly payments will be higher.

If you plan on having a car (any brand) after the two years, PCP is better IMO as the monthly payments are lower.

RDG

If you only want a car over 2 years the cheapest option maybe to lease one as you will only need a very small deposit 3 - 6months payments depending on the deal and the monthly repayments may be a little more than PCP but you have most of your deposit left.

EDIT: Having a quick look on the ford website and options plans (online at least) will only allow more than 30% deposit so you could only put down 7200 anyway.

A £23500 mondeo gives the following

24 monthly payments of £344.69
Cash price £23,500.00
Deposit allowance £1,500.00
Customer deposit £6,725.00
Total deposit £8,225.00
Amount of credit £15,275.00
Charge for credit £1,150.56
Purchase fee * £10.00
Total charge for credit £1,160.56
Total amount payable by customer £23,160.56
GMFV (optional final payment) £8,153.00
Mileage per annum 9000
Excess mileage charge (pence per mile) 9.6
4.8 % APR typical


A quick look on a lease site gives a deposit of 3 months and a monthly cost of £435.54

rosbox

I have just bought a car using the option plan and the path I have chosen is to buy a pre registered car from Ford. You can find them on Fords web site under locate your vehicle, play with the menus on selection you will get a list of cars of which a lot at the moment have 4 - 9 miles on the clock but have been reg in May onwards this year and the prices are a lot lower as Fords have registered them already, so they are clased as used not new. You can still use the options plan but you will have to go to your local dealer. I traded my old car in for £8400 used £5500 as deposit £2900 cash back and pay £256 a month for 24 months GMFV £8200.
The point being the car new was the same as the plan above but buying the same car used it was £17850 & yes it is a Mondeo as well

Amme

pheonixrising21 wrote: »

in my opinion, PCPs are the best way to finance a new car if you plan on swapping at the end of the term, as it reduces the monthly payments.

PCP's offer you a guaranteed minimum future value which the company believe the car will be worth at the end of the term with the agreed amount of miles on the clock. They are usually pretty conservative with the estimates as they want you come back in 2/3 years and buy a new one. if they over estimate the GMFV, you can just walk away and they are left with a car worth less than the remaining balloon, so they take the loss. They don't want that!

They should have told you that in 2 years, your car will have a GMFV of (lets say £10000). In 2 years time when the plan is over, you have the three options.

1) You pay (or re-finance) the balloon payment (£10000 in this case) and the car is yours.
2) you trade in for a new one. They value your car and any equity is put in a full or part deposit for the new one
3) you walk away. If the car is worth more than the GMFV, they should give you the equity in cash. In this option, they will also charge you if you go over the mileage you agree to at the start, anywhere between 4 an 19p per mile.

You will NOT lose the deposit through the scheme itself. You will lose it in the depreciation of the car, but this is the same for ALL car deals. It doesn't matter if its a new car, a used car, a HP plan or a PCP plan, they all depreciate in value.

Just out of interest, why would you walk away after the two years? Do you plan on not needing a car in two years time? I assume you know that PCP's are transferable between dealers and brands i.e. if you dont want another Ford in two years, you can take the car to Citroen and ask for a part-ex valuation , just like a HirePurchase plan?

If you plan on not having a car at all after two years, HP is probably better. That way once the plan is over, the car is yours and you can sell it if you want. Your monthly payments will be higher.

If you plan on having a car (any brand) after the two years, PCP is better IMO as the monthly payments are lower.

Hi,

Yes I would be needing a car in 2 years, I did not know you could transfer from brand to brand so that sheds a different light on the matter. I was worried that at the end of the contract I would end up with nothing after podding out all that money if I decided not to keep the car.

Thanks for that

Barmybuckle

Sorry to hijack this thread with another query but I think the response will probably help the original poster.

I'm considering getting a BMW 1 series on their PCP. This is their example plan on their website below. My query is about the GMFV, is it the same as the optional final payment? So if I trade in and get a new one, my deposit would be £9676? And I could then in turn have lower monthly payments or a more valuable car?

Monthly payments of £209.00
Term of agreement 36
On the road cash price* £19,760.00
Annual mileage 10000
Customer deposit £3,650.00
Dealer deposit contribution £899.52
Total deposit £4,549.52
Amount of credit £15,210.48
Credit arrangement fee £0.00
Option to purchase fee** £10.00
Optional final payment £9,676.82
Excess mileage charge 6.5 pence per mile
Total amount payable £21,551.34
Rate of interest 4.86% Fixed
APR 4.9% Representative APR

Barmybuckle

Now that I've posted that I think I've found the answer.

The deposit for the new car would be the trade in price minus the balloon payment (gfv).

So in the above example, if I trade it in and it's still worth £14000, the deposit I'd get from that would be £14000 - £9676.83?

Is that correct?

pheonixrising21

Barmybuckle wrote: »

Now that I've posted that I think I've found the answer.

The deposit for the new car would be the trade in price minus the balloon payment (gfv).

So in the above example, if I trade it in and it's still worth £14000, the deposit I'd get from that would be £14000 - £9676.83?

Is that correct?

Thats correct. At the end of the deal, you either pay £9676.83 and keep the car, walk away, or trade in. If you trade in, they value the car, take away the GFV and thats your deposit for the next one (and the next one can be another brand if you want)