New Car Purchase - PCP

p1tst0p_2

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matthewn.green

Most finance companies will be a lot more accepting if there's some deposit, as they've got more security from day one.

With PCP, there's no point putting in a big deposit, as you won't gain the equity at the other end of the agreement, 10% is normally about right.

Why are you thinking PCP? Because another option would be 5 Year HP, normally lower APR, and due to rules of Halves and Thirds, after half the amount has been paid back you still have the option to hand the car back, part exchange, or continue the agreement to own the car.

apk1

p1tst0p wrote: »

without worrying about depreciation, as I have been hit badly in the past....

:T

Never understood this, surely the only way to avoid/reduce depreciation is to buy used and keep for a long term ? PCP you will surely just pay the depreciation on a monthly basis ?

DealDrivers_company_representative

Lenders have different rules on PCP...the accepted general rule is 10% of the car's price and most advertised deals use that formula for ease.

Most pcp's have max' deposit allowances...for instance the one we use will accept nil deposit if you simply don't have anything to put down (as long as you get credit approval of course) but the max deposit allowed is 40% of the car price, some manu'r schemes only accept a max' deposit of 30% (BMW for example) to 35% (Ford for example).

Clearly the more you put down means you are borrowing less...so your monthly payments come down.

One note:
On our nil deposit deal, you do have to give the dealer an ordering deposit (any dealer ordering a car for a customer without taking a deposit to protect themselves against cancellation - leaving the dealer stuck with the car -, is suicidal!) but when the car is ready the dealer invoices the funder and when the funder has paid the dealer the full amount required on your behalf to enable delivery to take place, the dealer refunds your ordering deposit so you end up 'all square' with a fully 100% financed deal.

matthewn.green

In response to Dealdrivers post, yes thats true, but you can miss the fact that if you put down 40%, your not going to get any more at the end of the term, therefore won't have as big a deposit for the next agreement.