PCP: Have I been duped

marlot

Walshy252 wrote: »

...
Convinced by my dad to not buy new ("lost 30% as soon as you drive away") ...

My options were:
- £12900 cash
- £313 per month PCP on 14.9% APR Boomerang over 3 years. Guaranteed minimum future value of the car £5700

PCP can make sense on a new car, as the manufacturer often makes a contribution. I believe that is currently £1450 on a focus. They also tend to offer lower APRs. On the Kia I bought recently, it was 4.9%.

If I were in your position, I'd settle the finance within the 14 days. You may be charged a few days interest.

prowla

neilmcl wrote: »

That's a ridiculously bad deal for a £12K used Ford. You could easily get a brand new £30K BMW for that sort of monthly payment.

FYI, I am...
(The balloon after 4 years is £10k, though.)

bengalknights

If im honest that isnt exactly the best deal for a nearly new car, you will probably find you get betters deal through Contract Hire & Leasing

For example this is around £200 a month

http://www.contracthireandleasing.com/car-leasing-companies/independent-brokers/nationwide-vehicle-contracts-ltd/ford/focus/114491666/

AdrianC

Of course it's going to work out more expensive. You're borrowing £12,700 at nearly 15% per year interest. You're then repaying £7,000 of it over the next three years, leaving you owing £5,700 after three years - but, of course, you've been paying interest on the whole outstanding amount.

ratrace

Mate, if you you are looking in to buying a house in the next 2 years if i was you id stay away from any type of monthly commitments and build them savings up so i could get a better ltv rate on my mortgage

A cars job is to get you from a to b just buy a car for £2,000 and drive that for now, dont get me wrong i love my cars but if i was applying for a mortgage id stay away from expensive cars, buying a house is not only about a despoit you have a lot of other expenses so the more cash you have the better

good luck

foxy-stoat

Agree with Rat, but not sure if you can hand back the car now, only end the finance. The cooling off period is for the finance not the purchase of the car.

Maybe you should clear the finance now, drive it for a year and sell it to buy a car for £2-3000.

facade

Pay the finance off, and put the £313 a month back into your savings as suggested before.
Then if you are stuck for cash in 12 months time you could sell the car for not much short of your savings deficit.

At least you will have a fairly reliable car, when you start buying the £500-£1000 cars you end up spending £500 on things like tyres and service items, then the car could blow up after three months, and you have to buy another..

neilmcl

facade wrote: »

Pay the finance off, and put the £313 a month back into your savings as suggested before.
Then if you are stuck for cash in 12 months time you could sell the car for not much short of your savings deficit.

At least you will have a fairly reliable car, when you start buying the £500-£1000 cars you end up spending £500 on things like tyres and service items, then the car could blow up after three months, and you have to buy another..

If he pays the finance off he wont have £313 to put back into his savings (he's still have to pay nearly £13K for the car don't forget), at best he will have saved around £110 per month from not completing the finance agreement. Still better than nothing.

Personally I'd be trying everything to get out of the car purchase altogether and try and find a better deal.

facade

I thought he would settle the car out of savings, and would therefore not have to pay anything, so the whole of the £313 can just go back into the savings.
I read it that he had bought the car, but could still get out of the pcp (subject to astronomical fees no doubt)

Herzlos

Probably looks better on a mortgage application to not be tied into the 3 year PCP anyway, and by putting the £313 into savings should allow you to recoup the deposit in time. By year 3 you'd be about £6k ahead.