PCP Question

istabraq

mjoneseyjones wrote: »

Its not that simple though is it?

The dealer/finance company have more of an interest in the car than just the cost of the PCP over the 3 years.

I don't know why we're still talking about it, you'll not find a dealer in the world who'll let you hand over 3 grand to drive off wih a brand new car with no finance package attached to it.

Don't talk about it if you don't want to - i'm sure others will.Why would i not find a dealer that would do it? They get their money either way.

3k from me in monthly instalments and hand the car back after two years or 3k from me up front with no finance package. In theory they get the EXACT same amount of money just via two different routes so why would they bother?

mjoneseyjones

No you're right, im convinced now.

Go and call your local dealers, offer to pay the cost of PCP payments for 3 years up front in return for driving off in their 9 grand asset with no further financial package attached to it or you.

Let us know how you get on though mate, yeah?

istabraq

mjoneseyjones wrote: »

No you're right, im convinced now.

Go and call your local dealers, offer to pay the cost of PCP payments for 3 years up front in return for driving off in their 9 grand asset with no further financial package attached to it or you.

Let us know how you get on though mate, yeah?

I don't think you're reading it properly. I'm sure i'd contract with them. Anyway, i'll bow out as i get enough tetchy sarcasm from the children :hello:

laidbackgjr

The difference between a finance deal and what you are proposing is that legally the garage / finance company still own the car and therefore effectively have security they will get the car or £6k back at the end of the two years. With what you are proposing there is no standard legal way for the garage to ensure that the end of two years they get the car back or £6k. It should be possible to get a solicitor to draft a legal watertight agreement - but that would be a cost you would have to pay and would probably run into £ 000's anyway.

Why not take the finance package if you want a £9k car when you only have £3k available - that's what they are there for?

Cornucopia

First off, a PCP is a finance package. In fact, it's generally a more expensive finance package (rate-for-rate) than basic finance where you pay off the entire capital over a period of time. That's because you pay interest for the entire balloon payment amount (GMFV) and never repay any of it during the term.

So... no, you can't have PCP without borrowing at least the balloon payment and paying interest on that. Every retailer and finance company will have their own rules, and I had a PCP on a new car where I paid the largest deposit possible and ended up with repayments of 27 x £88 - this was basically the interest cost of the GMFV.

It's a pity that the car industry hasn't understood that one of the features buyers find attractive about PCPs is the GMFV, at least the G, and offered some kind of insurance against a future value for people who buy cars for cash.

BeenThroughItAll

istabraq wrote: »

I can't buy the car though cause i don't have enough money

Car cost = 9k

PCP over two years = 3k

I have the 3k but want to know if i absolutely have to take finance or if i can just hand over the 3k for a two year pcp deal (at which point i will hand the car back)

istabraq wrote: »

The dealer would get the cost of the PCP deal if i'm giving them the 3k

istabraq wrote: »

Don't talk about it if you don't want to - i'm sure others will.Why would i not find a dealer that would do it? They get their money either way.

3k from me in monthly instalments and hand the car back after two years or 3k from me up front with no finance package. In theory they get the EXACT same amount of money just via two different routes so why would they bother?

Is this a wind-up, or are you genuinely that naïve?


Or are you just insane/this week's Darkmatter101 AE?

Cornucopia

The OP might get some sort of a result from a Lease rather than a PCP.

Put the money in the bank. Make the lease payments. Give the car back at the end. Job done.

istabraq

BeenThroughItAll wrote: »

Is this a wind-up, or are you genuinely that naïve?


Or are you just insane/this week's Darkmatter101 AE?

I'm not being naive at all. It was a simple question of if I owe the garage £3k would they mind if they got that straight from me or if they got it from me via a finance company. I actually thought they'd be more secure if they had already got the money from me.

It's a completely legitimate question and no on has yet explained why it's ridiculous other than the usual "are you dumb" crap.

neilmcl

forgotmyname wrote: »

Why bother with loans and PCP's if your going to buy it outright?

Just tell them its a cash sale and know what the best deal is elsewhere and say you can buy it now today...

A salesman wont want you to go away and think about it. Often the buyer finds a better deal and goes with it or decides not to.

Because you can quite often get much better discounts and dealer/manufacturer contributions by taking out their finance package. Then all you do is cancel within 14 days without penalty.

laidbackgjr

istabraq wrote: »

I'm not being naive at all. It was a simple question of if I owe the garage £3k would they mind if they got that straight from me or if they got it from me via a finance company. I actually thought they'd be more secure if they had already got the money from me.

It's a completely legitimate question and no on has yet explained why it's ridiculous other than the usual "are you dumb" crap.

This is simplified, but what normally happens with a PCP deal is the garage gets £9k from the Finance company, the finance company then own the car, the finance company then let you use the car in return for £3k over 2 years and you then hand it back to the finance company who have a car worth £6k they can sell.

The above values take no account of finance company profits - so realistically what happens is this.

Garage owns a car worth £7.5k

Garage sells the car for £9k - Garage makes £1.5k profit, as finance company pays them £9k.

Finance company charge you £3k to use the car for 2 years, you then hand the car back. Car is worth £7k - Finance company sells it and makes 1k profit!