PCP Advice

badaz52

Hi,

I'm thinking of purchasing a new car a toyota yaris to be exact as they are currently offering 0% on all of the range until the end of the month.

Unfortunately I am having some difficulty understanding how PCP can do what it is actually intended for. It is my understanding that the reason for the scheme is to keep monthly repayments lower and therefore make it more affordable to buy a new car.

It starts to get confusing as to what happens after the contract period is up for example the gfv for the model I am looking at is 6k and based on depreciation figures this is what it will be worth after 3 years meaning little or no deposit on a new one.

My question to everyone is how can the dealership retain your business or be able to upgrade to a better spec after 3 years if I have none of my original deposit left? Surely they don't expect that people will have saved some money during the 3 years to afford another deposit? I like many rely on the value in my cars to be able to trade up although from a pcp offer it looks like there is never any value left in the vehicle come the end of the contract?

If I have got this wrong or there is a better way please let me know what do the dealers actually do after 3 years to keep your business?

Cheers
Adam.

CTcelt1988

badaz52 wrote: »

Hi,

I'm thinking of purchasing a new car a toyota yaris to be exact as they are currently offering 0% on all of the range until the end of the month.

Unfortunately I am having some difficulty understanding how PCP can do what it is actually intended for. It is my understanding that the reason for the scheme is to keep monthly repayments lower and therefore make it more affordable to buy a new car.

It starts to get confusing as to what happens after the contract period is up for example the gfv for the model I am looking at is 6k and based on depreciation figures this is what it will be worth after 3 years meaning little or no deposit on a new one.

My question to everyone is how can the dealership retain your business or be able to upgrade to a better spec after 3 years if I have none of my original deposit left? Surely they don't expect that people will have saved some money during the 3 years to afford another deposit? I like many rely on the value in my cars to be able to trade up although from a pcp offer it looks like there is never any value left in the vehicle come the end of the contract?

If I have got this wrong or there is a better way please let me know what do the dealers actually do after 3 years to keep your business?

Cheers
Adam.

Yes, I do agree with you. If say the deposit was £4,000, and the monthly repayments were £185 for 36 months, then how would you be able to get another £4,000 to get another PCP after that one finishes? I certainly couldn't keep paying a deposit every 3 years.

badaz52

I just wanted to check that it wasn't just me who felt this way lol.

bluesnake

they use your old deposit, plus possibly a top up amount will be need. In a perfect world, when you leave, you get the whole deposit back.

Is your employment, or future, or health, or finances secure and plentiful so that you can envisage 4 years into the future, without any case of need so you are not left paying for a number of years left of the term with no immediate income and no asset to sell?

I'm sure these plans do benefit some, but there have been quite a few people on here wishing to ditch their plan. Also many people in the time period end up with a scratches and dents in their cars/rims, and this will also often cost you extra. Also the end purchase option is usually way over the market price.

Er, how can you tell in 3 years how much a new one will cost, from which you can calculate the deposit? Do you pick lottery no's successfully too?;)

rs65

According to Toyota website:-

You choose the amount of deposit that you want to pay and your payment term.

Don't pay any deposit. Just pay a monthly amount and hand it back after 3 years. If there is any equity in it, use this as a deposit for your next car. If no equity, just start a new deal with no deposit.