New PCP

MataNui

As someone else mentioned its failed its inspection. Its not unusual for a car to get some damage in transit. Some of them come a very long way through multiple handlers. Shouldnt take more than a week for them to get it touched up. The fact they have gone dark for so long would make me think its had a bigger accident. Probably on site.after delivery to them.

I would be going round there asking to see it today.

Robby1988

Tarambor wrote: »

Other than at the end of the loan you actually have a fully paid off car to show for all that money you've spent whereas with a car on PCP you'll take out another and start the whole "paying for the largest chunk of depreciation there is" routine all over again.

And given the loan isn't secured on the car then unlike a PCP deal if you ever find yourself in trouble you won't lose the car if you don't make the loan payments or you can sell the car to pay the outstanding loan. With PCP you either lose the car or you're stuck making payments you can't afford with a massive penalty if you try to get out early. I wonder how many working people using foodbanks are there because they have a PCP deal.



But at the end of the loan you're not then having to go get another car on finance because you can't afford the balloon payment. PCP is a trap, a massive monumental trap which basically entraps people into monthly car payments forever. Most people don't pay the balloon payment but just finance another PCP deal because why get a loan to cover the balloon payment and pay £200 a month for a car you've had 4 years when you can pay £200 a month and have a new one on PCP?

And that is even before we get into the pitiful annual mileage limits with quite expensive penalties for exceeding them, the penalties they'll try to get out of you for dings and scratches, the fact you can't do any modifications to the car because it isn't yours.

Your absolutely spot on. I'm not necessarily accusing the OP, but so many people (especially young people) are getting lured into these PCP deals with no idea of what they are getting themselves sucked into long term.

I speak from experience. Aged 21 I got lured into a 36 month PCP deal at nearly £300 a month. I could afford it easily at the time, but of course 12-18 months in I wanted to start saving for a house deposit and go on some trips and the car finance became a big hindrance to me with no way out. The novelty of the new car had worn off. I struggled on to the end of the 36 months only to find myself with a £6500 final payment I couldn't afford, a £700 excess mileage fee plus penalties for scuffs to hand it back (I was told the low mileage limit doesn't matter when I got it....) or the option of a new car at a higher monthly payment because I had nearly £2k of negative equity. The only way out for me without losing a car was a personal loan to cover the final payment which took 3 years to pay off at nearly £200 a month. All in all, that great 3 year deal I took out turned into 6 years. Oh how I wished I just bought a second hand car outright at the start.

I don't buy the common argument about piece of mind over maintenance either. Unless you are doing big mileage and really hammering the car, if you make a careful second hand purchase the odds of the maintenance costing you anywhere near as much as a PCP deal in the long run are minimal. You can pick up warranties for £20-£30 a month if your really paranoid. Lets face it, the only real justification is the desire to have a shiny new car on the drive.

Cornucopia

Perhaps the OP can assure us that they know all the pros and cons of PCPs (or don't care) and then we can avoid going over the "PCPs - good or bad" territory yet again?

Robby1988 wrote: »

... I had nearly £2k of negative equity.

Negative equity at the end of the PCP term - that doesn't sound like a normal PCP.

bazzyb

Cornucopia wrote: »

Negative equity at the end of the PCP term - that doesn't sound like a normal PCP.

It sounds exactly like a normal PCP if you read the whole post rather than just quoting part of it out of context. The £2k neg eq and higher monthly payments was the only option to avoid the £700 excess mileage charges. It's a common occurrence when dealers tell customers not to worry about the mileage as they can trade the car in at the end of the agreement so they never have to pay the mileage charges... The negative equity gets carried over into the new agreement.

Robby1988

Cornucopia wrote: »

Perhaps the OP can assure us that they know all the pros and cons of PCPs (or don't care) and then we can avoid going over the "PCPs - good or bad" territory yet again?



Negative equity at the end of the PCP term - that doesn't sound like a normal PCP.

It was a normal PCP with Peugeot. £6500 GFV & when I took it around dealerships at near the end of the term (I didn't want another Peugeot) nobody would offer me even £5k for it and it was hardly in bad nick.

Maybe a Peugeot dealer would have offered up the full £6500, but then thats just another trap where your in tied to one dealer/marque.

Cornucopia

Robby1988 wrote: »

It was a normal PCP with Peugeot. £6500 GFV & when I took it around dealerships at near the end of the term (I didn't want another Peugeot) nobody would offer me even £5k for it and it was hardly in bad nick.

Maybe a Peugeot dealer would have offered up the full £6500, but then thats just another trap where your in tied to one dealer/marque.

Why didn't you just hand it back?

Cornucopia

bazzyb wrote: »

It sounds exactly like a normal PCP if you read the whole post rather than just quoting part of it out of context. The £2k neg eq and higher monthly payments was the only option to avoid the £700 excess mileage charges. It's a common occurrence when dealers tell customers not to worry about the mileage as they can trade the car in at the end of the agreement so they never have to pay the mileage charges... The negative equity gets carried over into the new agreement.

Are people really taking a £2k hit to avoid a £700 charge? Why?

bazzyb

Cornucopia wrote: »

Are people really taking a £2k hit to avoid a £700 charge? Why?

If the option is putting in £700 cash (which they may not have) to get rid of a car and walk away with nothing - or increase their monthly payments to cover the neg eq and take away a shiny new car, inevitably some people will take the latter option.

Some people may not even realise quite how much they are carrying over if the dealer simply quotes a new monthly payment for them (again on PCP).

This is one reason why so many people advise against PCP. For some people it works out as a good deal if they understand the package correctly. However many people are led into the PCP 'trap' without fully knowing the ins and outs and get stuck at the end of term, or even sooner - just look at the frequency of VT threads on here.

facade

Cornucopia wrote: »

Why didn't you just hand it back?

His choice I guess, but looking at his figures, he wanted a car, and if he handed his car back, and then bought it back from a dealer the next day it would have cost him £6500 and he'd have paid the damage & excess mileage on top. The dealers would buy it in for £5000, and punt it out at £6500 or thereabouts.

Financing the GFV with a bank loan would have been a lot cheaper than replacing like for like on dealer finance and terminating the pcp.

Robby1988

Cornucopia wrote: »

Why didn't you just hand it back?

As I would I have been forking out nearly a grand in penalties to walk away empty handed. Bit of a sickner when you have already paid out around £10k in payments already.

I didn't have lots of cash to hand & still needed a car. There wasn't anything else on the market I was crazy about at the time, thought what I had would be reliable so I took a low interest personal loan out with much lower monthly payments to cover the baloon.

3 years later I was free of car finance, debt & with ownership of an asset worth several thousand pounds. Was defiantly the right decision in the long run I think.

Anyway....

If the OP is happy with the PCP arrangement my only advice would be to make sure the mileage allowance is set properly. Do not buy into a dealers BS about it not being important as the GFV is partly based on the mileage your expected to do, if you go massively over it you just end up in negative equity at the end.