Overpay 99% of PCP but not settle

uglistix

Hi,

I'm looking at buying a Tesla and whilst I could buy cash I'm interested in their PCP deal because it has a very high GFV. My question is whether it's possible to take out the PCP deal and then immediately overpay everything except some nominal amount (eg £10) so that my monthly payments essentially go to zero (as the 5.9% interest will now be applied to the remaining £10). As I haven't settled the PCP I would still have the GFV right?

I haven't seen the T&C's for the PCP deal yet, but I've been reliably informed that there's no charge for overpaying. Have I missed something? Or is this a common trick for PCPs when the GFV is so high?

As a side note one of the reasons I personally think the GFV is high is that this GFV option is triggered at 37 months - which is going to be after the new model 3 has started to deliver. I reckon the resale price of model s or X could take a hit from this cheaper model becoming available.

Thanks!
John

gzoom

I'm in the same boat, but still 6 months away from comitting. Halifax car PCP product is worth looking at, on a £60-70K car with a £20k deposit your looking at 3.3% APR.

I woudlnt worry about residues on a Tesla. They are very 'controlled', Tesla will buy back at 50% base price + 47% options at 3 years if you go with their PCP plan, so essentially you know the MaX your loss over 3 years in deprecation will be around 50% of list price. This is less than what your loss on any equivalent large premium saloon.....But clearly 50% of £60-70-80k (If your going for a X) is still ALOT of money to throw away on a car!!

Used Model S are around now. I woudlnt touch one without a Tesla warranty, which essentially means buying direct from Tesla. Prices aren't too bad, and offer a decent saving compared to new.

Finally if you haven't pre-ordered a 3, I woudlnt bother now. They have collected 320K worth of pre-orders already, that's pretty much the entire production quota for the first 18-24 months sold already. Pre-order now, and I don't think your see the car till 2020 at the earliest.

bigjl

Mmmmmm

If you had actually looked into this properly you would have been told about the guaranteed buy back of used Tesla's.

So surely needing a PCP for the GFV is pointless.

I am surprised somebody of your obvious "means" would not have already known that.

Did you mean the Audi electric model or the Yaris Hybrid????

The buy back has been in position since the Tesla started to be sold in the UK as far as I am aware.

uglistix

Thanks. Yes, the depreciation hit on ANY 50-60k car is a lot to throw away. so let's assume I've come to terms with that. So my options are by a used (agree this would be from Tesla with warranty,etc) so that some depreciation has been taken by the first owner (actually not much looking at current models on inventory) and then "hope" that depreciation is controlled. Option 2 is buy brand new PCP and as I said above immediately pay down all but £10.00 of the PCP so that I lock in a known deprecation point. If it ultimately ends up above that then great - I have equity in the car. If the resale price ends up below then also good for me as I can hand it back.

If I use parkers depreciation curve (which I know is dubious given the controls tesla is trying to put on residuals and also that unlike a ICE car there is a limit to mileage before the battery needs replacing) then it actually works out that I "throw away" less with PCP on a new car than buying used.... Assuming I overpay most of the PCP straight away that is. Plus the rest of the cash (recall I have the cash to buy upfront) is sat earning some small interest with the PCP method.

bigjl

What is the point?

Tesla will guarantee the purchase price of the car.

And if you actually do have £50/60k cash to spend on a car why would depreciation bother you?

You are independently wealthy.

Or a troll or course.....

uglistix

Thanks - I have only just started to look into it. However I had a long chat with a Tesla rep and as far as she was aware there were only two ways to be eligible for the guaranteed buy back. Either with the PCP or the HP finance.

So first of all you have to take finance with them to get the buy back. However there is one very crucial difference between the two buy back schemes. The HP is 50% of the BASE model plus 43% of options. Whereas the PCP doesn't limit to the base model.... So if you're buying the top model (eg P90D) then the buy back scheme is vastly different between the two.

uglistix

I guess the point is that I want to be as efficient as possible - hence the question. I see now that I've muddied the water by mentioning brands and therefore inferring monetary amounts.

My main question was generic to PCP and GFV and whether paying most of the PCP early just to keep the optional its that a GVF provides is a good idea. Independent of whether we're talking about a 10k car or a 100k car.

Apologies if you think I'm trolling. It was a genuine question, but happy to take it elsewhere is MSE isn't the right forum.

motorguy

bigjl wrote: »

Mmmmmm

If you had actually looked into this properly you would have been told about the guaranteed buy back of used Tesla's.

So surely needing a PCP for the GFV is pointless.

There could still be a need...

If i have £40K right now but want to buy an £80K car, then a PCP deal could be used to facilitate that - with a view to buying the car outright at the end of the PCP

motorguy

Uglistix wrote: »

I guess the point is that I want to be as efficient as possible - hence the question. I see now that I've muddied the water by mentioning brands and therefore inferring monetary amounts.

My main question was generic to PCP and GFV and whether paying most of the PCP early just to keep the optional its that a GVF provides is a good idea. Independent of whether we're talking about a 10k car or a 100k car.

Apologies if you think I'm trolling. It was a genuine question, but happy to take it elsewhere is MSE isn't the right forum.

I'm honestly not sure if the finance company would agree to that - you could ring and check?

Having said that, if they didnt, surely it would just be a matter of putting the money into an account and letting the payments come out for the duration?

uglistix

Just got hold of the PCP terms and conditions. Overpayments, if large enough, will ultimately serve to reduce the term of the agreement, not maintain the length with near 0 payments. The guy on the phone wasn't 100% sure (and is checking), but suspects that this will mean the GFV option is pulled nearer to today as the term reduces as it forms part of the "Agreement".

motorguy

Uglistix wrote: »

Just got hold of the PCP terms and conditions. Overpayments, if large enough, will ultimately serve to reduce the term of the agreement, not maintain the length with near 0 payments. The guy on the phone wasn't 100% sure (and is checking), but suspects that this will mean the GFV option is pulled nearer to today as the term reduces as it forms part of the "Agreement".

I'd stick the money in an account then and pay the monthly payment from that.