PCP Deposit Head Scratcher

Cornucopia

Like a lot of retail offers, 0% Finance may be costed in other ways (typically by decreasing the maximum discount on a vehicle) however, that doesn't mean that the customer could ever access that cost by conducting the transaction in a different way.

Technoholic

Cornucopia wrote: »

Like a lot of retail offers, 0% Finance may be costed in other ways (typically by decreasing the maximum discount on a vehicle) however, that doesn't mean that the customer could ever access that cost by conducting the transaction in a different way.

I see what you mean but I can't see how in this situation where I'm getting more discount that with other methods, that I'm losing out. However either way, it still works as a good deal for me and much better than financing it another way, and even if I pay off the PCP after month 1, I've benefitted from a massive discount not otherwise available.

Cornucopia

Indeed, and I think that buying a car is such a minefield, that that is probably the best attitude to have: go and find the best deal on the car you want/need that makes sense for you financially and which provides a level of VFM that is acceptable to you.

Personally, I like 0%, and for many people, going into the dealership and asking for the 0% deal they have seen advertised is way, way easier than asking for and securing the equivalent discount required to offset the cost of the interest on their finance package.

ed67812

A mate of mine was a salesman and I discussed a similar scenario with him.
He tells me that some bonus payments are nonsensical and so getting a customer on a 0pc deal can pay more than taking cash. Also once you are on pcp (statistically) it is much easier for them to contact you 6 months before the end of the agreement and offer a "contract review" or in plain terms, try to sell you another car.

dcweather

Technoholic said:

Tarambor wrote: »

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No PCP deal is truly interest free, they get their money out of you in other ways.

You say this but don't give an example of what that actually means.

If I pay for the car cash upfront, or I get a hypothetical 0% loan, or I take the PCP and pay it all including the balloon payment, how are they getting any more from me by going the 0% PCP route? Granted I could get some money on the capital in a bank but they are not getting what I am losing, Im just "losing" it myself. If anything by paying PCP, I'm getting a bigger discount due to the contributions available which I wouldn't get by paying cash. I agree that PCP is not for everyone but I can't see how they are getting more from me in this scenario
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From so many current and old threads it is still clear people are entering into these plans without understanding them. In your case you are right. They will get some commission from the finance Company and maybe a sales target bonus from the manufacturer. These type of deals can be good for the consumer because you are getting a bigger discount than you would as a cash buyer (probably) and at 0% interest you are paying the same as you would cash so you are not paying more. For some reason people don't seem to get that they will have to either pay the rest of the asking price (the balloon payment) at the end to keep the car or just give it back and have no car. But the good thing is you know what that final payment is going to be at the beginning. I don't understand these people saying boo hoo I have lost my deposit and have no equity. Of course they have because it was part of the payment towards the car and why their monthly payments seemed so low. They have had a brand new car for three years and only paid for its depreciation, not the whole value. The finance companies are good at estimating its final value. But even they can't predict the future so you will usually end up with either a small positive or negative equity depending on how well they did, or break even if you give it back. The worst thing is you don't realise how fussy they are when you give it back and you could also be asked for maybe a thousand pounds for a minor dent and a few bumper and alloy wheel scratches or scrapes which can make you a very nervous driver for three years, believe me!

AnotherJoe

Check out a Tesla Model S before you spend on this dinosaur.

At least the Beemer is on PCP so you wont be lumbered with a massive depreciation bill, seems like the dealer or BMW already has bitten the bullet on that.

Writing is on the wall for fossil fuel cars, this is a portend.

Clive_Woody

AnotherJoe said:

Check out a Tesla Model S before you spend on this dinosaur.

At least the Beemer is on PCP so you wont be lumbered with a massive depreciation bill, seems like the dealer or BMW already has bitten the bullet on that.

Writing is on the wall for fossil fuel cars, this is a portend.

The OP started this thread 2 years ago, so I suspect he's made his mind up by now.