PCP - would it be a huge mistake?

LittleWonder_2

Hi all,

I'm looking to buy a new car - not too bothered about it being a 'new' new car, but I've stumbled across PCP, which I had never heard of before. I

I've been offered a Qashqai nTec+ for £70 a month (36 months) with a guaranteed future value of about £10k in exchange for my 2012 Juke (33k miles), valued at £7,700. This includes a £2k dealer contribution.

On the surface, it looks like a good deal, but the risk of having no collateral to roll into my next purchase is, frankly, terrifying. I've said that I am not interested when they phoned with this latest offer, so I might have even missed the boat on this deal.

Any advice gratefully received - you could literally be a lifesaver as I think my partner is going to kill me if I procrastinate any longer!

Generali

There is no such thing as missing a deal unless you buy from a company being liquidated. If they can sell for £x today they can sell for £x tomorrow.

force_ten

LittleWonder wrote: »

Hi all,

I'm looking to buy a new car - not too bothered about it being a 'new' new car, but I've stumbled across PCP, which I had never heard of before. I

I've been offered a Qashqai nTec+ for £70 a month (36 months) with a guaranteed future value of about £10k in exchange for my 2012 Juke (33k miles), valued at £7,700. This includes a £2k dealer contribution.

On the surface, it looks like a good deal, but the risk of having no collateral to roll into my next purchase is, frankly, terrifying. I've said that I am not interested when they phoned with this latest offer, so I might have even missed the boat on this deal.

Any advice gratefully received - you could literally be a lifesaver as I think my partner is going to kill me if I procrastinate any longer!

the one thing you dont mention is what the balloon payment is at the end of the 36 months, this is the end of term payment that you would have to make to keep the car


it is probably close to the 10K guaranteed future value, at the end of term pay them 10K or hand the car back and walk away

LittleWonder_2

Sorry - the balloon payment is the same as the guaranteed future value. They have implied that there would probably be some collateral to roll forwards and research suggests that there probably will be.

I just don't know if this is a good deal? I've never bought new before and certainly don't want to make a big financial mistake. The other alternative is to get a loan, but that comes with a whole other set of issues!

molerat

Their cunning plan is not to sell you this car but the next and the next and so on. They rely on people not managing to save up the balloon payment at the end so they are left with only 3 options - hand car back and be left with no car, get a loan for the balloon payment (get a loan to buy an old car after you have had a nice shiny one for 3 years!) or taking up the dealer's offer of another brand new shiny piece of metal. What will the majority do, after all what is not to like about a brand new car for only £70 pm.;)

force_ten

do you own the juke outright?

£70.00 per month is very cheap for a new Nissan Qashqai N-Tec+

but with the juke you are putting a lot in at the start

LittleWonder_2

I do own it outright - which I guess is a good thing and a bad thing as it does mean that I could lose all of the value in it over the course of the 36 months.

It's that £70 a month that is real enticing but it's not good if I get nothing in the end...

force_ten

well unless you have 10K sitting about waiting to pay the balloon payment at the end of term then you will have to save £280.00 a month to make the 10k ready to put in as the final payment at the end of the pcp term

so if you are saving to make the money for final payment then it is realistically £350.00 a month

if you want to walk at the end of term then you may have a bit of equity in the car but it wont be anything llike you have put into it

mad_rich

Put your reg number for the Juke into something like http://www.autotrader.co.uk/car-valuation

to give you an idea of how good an offer the part ex is.

Think of it this way. What would your Juke be worth in 3 years time, and how much would it cost you in servicing, MoT, repairs during that time if you kept it?

Compare that to £70/ month (£840/ year) PCP for the new car. What else do you need to budget for (servicing, tyres, brakes, or are they included?)

At the end of three years, you either have a Juke worth a few grand, or a Qashqai with very little equity.

That's your cost to change.

motorguy

LittleWonder wrote: »

Hi all,

I'm looking to buy a new car - not too bothered about it being a 'new' new car, but I've stumbled across PCP, which I had never heard of before. I

I've been offered a Qashqai nTec+ for £70 a month (36 months) with a guaranteed future value of about £10k in exchange for my 2012 Juke (33k miles), valued at £7,700. This includes a £2k dealer contribution.

On the surface, it looks like a good deal, but the risk of having no collateral to roll into my next purchase is, frankly, terrifying. I've said that I am not interested when they phoned with this latest offer, so I might have even missed the boat on this deal.

Any advice gratefully received - you could literally be a lifesaver as I think my partner is going to kill me if I procrastinate any longer!

This is a bad idea.

You're putting in a massive deposit and at the end of the deal, technically you've nothing to show for your deposit and monthly payments except for a small amount of equity.

PCP deals work best with a smallish deposit and set affordable monthly payments.

Take out a personal loan for the amount instead.

LittleWonder_2

Hmmm. Some really interesting feedback. Thank you all for taking the time to comment.

I can't afford a personal loan for this (£293+ a month) so I'm thinking the best plan will be to run down the value in my Juke, save as much as I can in the meantime and take a PCP with a higher monthly payment but less upfront to lose and keep my savings for when this deal runs out.

Or does that sound equally insane? Argh!!!!