Understanding PCP

Car_54

forgotmyname wrote: »

Memory rather Vague but....I seem remember an article with what were allegedly figures from the Ford Options scheme.

Business bought x number of Ford cars at a great discount and handed them back with low mileages and less than a year old? Ford knocked a few quid off the list price and convinced customers its an almost new car at a great saving.

Customer still paying more than the business paid in the first place (allegedly of course).

Probably true, but did anyone suffer as a result?

A large well-known driving school used to get thousands of new cars every year, effectively for free. They paid heavily discounted prices, and the manufacturer bought them back after 6 months for the original price and sold them on through the dealer network as nearly-new.

All it cost the driving school was the interest on the purchase. The manufacturer sold cars it wouldn't have otherwise, and influenced thousands of learners.

motorguy

forgotmyname wrote: »

Memory rather Vague but....I seem remember an article with what were allegedly figures from the Ford Options scheme.

Business bought x number of Ford cars at a great discount and handed them back with low mileages and less than a year old? Ford knocked a few quid off the list price and convinced customers its an almost new car at a great saving.

Customer still paying more than the business paid in the first place (allegedly of course).

It happens all the time. I dont see the issue?

It generates another sales stream to people who want to make a "saving" with pre-reg or nearly new cars.

Transformers

Buying a new car is just a personal decision based on what someone feels is best for them.

No need to assume it's vanity, stupidity or anything else. I get really fed up with reading all the inverted snobbery on here.

Nobody is forced to take out a PCP - and profit for car manufacturers and dealers should not be a dirty word.

The motor industry employs thousands of workers and generates millions for the UK economy and there's nothing wrong with that.

motorguy

Transformers wrote: »

Buying a new car is just a personal decision based on what someone feels is best for them.

No need to assume it's vanity, stupidity or anything else. I get really fed up with reading all the inverted snobbery on here.

Nobody is forced to take out a PCP - and profit for car manufacturers and dealers should not be a dirty word.

The motor industry employs thousands of workers and generates millions for the UK economy and there's nothing wrong with that.

+1

Well summarised. :T

knightstyle

We buy 3 year old cars and save a fortune, usually ex PCP or ex Motability, always from a good dealer, except once we bought from EH, and insist on guarantee, breakdown cover etc. for a year.

Mobeer

Mr_Singleton wrote: »

...The law of supply and demand says if they dump these cars on the secondhand market the value will crash....

It's really no different to customers buying new cars outright, keeping them 4 years and then trading them in. Either way there are 4 year old used cars on the market and second hand prices aren't much affected.

boliston

I think the main benefit with PCP is only having to finance the depreciation.

With traditional HP you are financing the capital element as well but with PCP there is nothing to stop you putting some cash aside to finance the final PCP balloon payment.

Nasqueron

I got my new one on 0% finance PCP. I knew the cost of the monthly payment and the cost to buy at the end. For people like me depreciation is a complete and overblown scare story, as with my previous car (bought 1 year old as I didn't have the money I had when I got this one) I intend to run it for 9-10 years (last was going to be replaced at 10 years old but ab icy road brought that forward a few months) so the fact it's GMV is pretty much 33% of the new price after 42 months is utterely irrelevant, it'll be worth maybe £500 when I get rid of it having had 10 years of use and having earned a nice sum on the interest while the funds were in my bank rather than in a dealer's pocket

motorguy

boliston wrote: »

I think the main benefit with PCP is only having to finance the depreciation.

With traditional HP you are financing the capital element as well but with PCP there is nothing to stop you putting some cash aside to finance the final PCP balloon payment.

You're financing the full capital amount and paying interest on it, not just on the repayment part.

motorguy

knightstyle wrote: »

We buy 3 year old cars and save a fortune

Technically, you're not saving a fortune - you're paying the worth of a 3 year old car.

You're neither buying a new car nor getting the benefits of a new car.

If i buy a 3 year old Focus with 36,000 miles on it, i havent saved a fortune - i've bought a cheaper used car.