Pcp

jack_tyler

I am currently looking at getting a new car via PCP. I have never done PCP before on cars ive had in the past, and my current car, I paid for in full as at the time, I had the funds to do so and I wasn't planning on changing the car anytime soon. But I will have had my present car 2yrs next April, and although that doesn't sound a long time, I am aware that the car will not be worth as much, as it is now....so hence the reason I am thinking about changing it.


I have been offered a part exchange price for my car against the one im looking at of £24,000 (the car I am looking at is £51,480). I have asked the dealership to do me a quote based on a PCP deal. Apparently the deposit can't be anymore than 40% of the asking price of the new car, so this would be £20,592. Based over 3yrs, with an annual mileage of 8,000 the monthly payments would be £265.18, with a final balloon payment of £27,458.57. I would also get cash back of £4,000.



I can comfortably afford the monthly payments, but what I am struggling with is if the car isn't worth much more than the balloon payment at the end, I am not gonna have anything there to use as a deposit on my next vehicle, if I choose to change it. I have spoke with a few of my friends, and they tell me that with a PCP it is better to put down a very small deposit, but unfortunately if I do this my monthly payments jump up to nearly £900 per month!!!!



The car itself is lovely and I really like it, but im just not sure about doing it as a PCP, so I am asking on here to see what people think of the figures above, and as to whether you agree with my friend, in that its better to be as least a deposit as possible when doing a PCP.




Thanks

BoGoF

Why would you even consider this......keep your current car if you bought it outright.

James2k

jack_tyler wrote: »

But I will have had my present car 2yrs next April, and although that doesn't sound a long time, I am aware that the car will not be worth as much, as it is now....so hence the reason I am thinking about changing it.

...Is the most ridiculous reason ever

Your new one will depreciate a hell of a lot faster than your old one. which has already taken the largest hit.

But then again, its your money, if you want to change car every two years, have a look at leasing.

then again part 2: if it is a focus RS, your engine may be about to explode anyway, so who knows, may be a good idea!

verityboo

jack_tyler wrote: »

........

I have been offered a part exchange price for my car against the one im looking at of £24,000 (the car I am looking at is £51,480). I have asked the dealership to do me a quote based on a PCP deal. Apparently the deposit can't be anymore than 40% of the asking price of the new car, so this would be £20,592. Based over 3yrs, with an annual mileage of 8,000 the monthly payments would be £265.18, with a final balloon payment of £27,458.57. I would also get cash back of £4,000.



I can comfortably afford the monthly payments, but what I am struggling with is if the car isn't worth much more than the balloon payment at the end, I am not gonna have anything there to use as a deposit on my next vehicle, if I choose to change it. I have spoke with a few of my friends, and they tell me that with a PCP it is better to put down a very small deposit, but unfortunately if I do this my monthly payments jump up to nearly £900 per month!!!!

........

Thanks

With a Pcp what you are paying back over the 3 years is the depreciation. Whether that’s with a big deposit and small monthly payments, or a small deposit and large months payments they will amount to roughly the same (except the extra interest with a small deposit). Either way it looks like the car you want to buy is going to depreciate £30k over the 3 years (but then it will however you choose to pay)

motorguy

jack_tyler wrote: »

I am currently looking at getting a new car via PCP. I have never done PCP before on cars ive had in the past, and my current car, I paid for in full as at the time, I had the funds to do so and I wasn't planning on changing the car anytime soon. But I will have had my present car 2yrs next April, and although that doesn't sound a long time, I am aware that the car will not be worth as much, as it is now....so hence the reason I am thinking about changing it.


I have been offered a part exchange price for my car against the one im looking at of £24,000 (the car I am looking at is £51,480). I have asked the dealership to do me a quote based on a PCP deal. Apparently the deposit can't be anymore than 40% of the asking price of the new car, so this would be £20,592. Based over 3yrs, with an annual mileage of 8,000 the monthly payments would be £265.18, with a final balloon payment of £27,458.57. I would also get cash back of £4,000.



I can comfortably afford the monthly payments, but what I am struggling with is if the car isn't worth much more than the balloon payment at the end, I am not gonna have anything there to use as a deposit on my next vehicle, if I choose to change it. I have spoke with a few of my friends, and they tell me that with a PCP it is better to put down a very small deposit, but unfortunately if I do this my monthly payments jump up to nearly £900 per month!!!!



The car itself is lovely and I really like it, but im just not sure about doing it as a PCP, so I am asking on here to see what people think of the figures above, and as to whether you agree with my friend, in that its better to be as least a deposit as possible when doing a PCP.




Thanks

:eek:

I think this is a willfully bad idea.

Your massive deposit is skewing your monthly payments to make them look very palatable.

Including your deposit, you're going to pay £30,000+ to drive it for 3 years which translates to an amortised amount of £837.18 each month, every month.

To me, PCP deals are about small deposits and taking advantage of any manufacturer incentives and this deal just looks upside down from the start.

Whats the exact car you're looking at?

Whats the APR on the PCP deal?

Unless you're ridiculously rich, £837.18 sounds eye wateringly expensive to be losing every month.

F1F93

You'll be paying 9.5k in monthlies. Including the 4k or so you'll get back as cash, you will have paid about 5k. For a 51k car. Okay, yes, you gave up your car worth 24k. But still you haven't paid that much.

If you were to pay cash for the new car it would cost you 27k cash plus your part ex.

So if your car is not worth more than the balloon payment, be aware that you have handed over £22k less than you would have done had you paid cash.

motorguy

F1F93 wrote: »

You'll be paying 9.5k in monthlies. Including the 4k or so you'll get back as cash, you will have paid about 5k. For a 51k car. Okay, yes, you gave up your car worth 24k. But still you haven't paid that much.

No, he will also have paid out the £20,592 of a deposit, plus £256 * 36.

You cant include the £4K he'll get back in cash, because then you're just moving the amount about - in your method hes losing £20,592 + £4,000 + £5,216, but its still costing him £29,808 to drive the car for three years NOT £5,000. :eek:

Amortize that (£29,808/36) and its costing him £828 a month to drive that car and then potentially hand it back with nothing to show for it.

motorguy

F1F93 wrote: »

So if your car is not worth more than the balloon payment, be aware that you have handed over £22k less than you would have done had you paid cash.

:eek:

God no!

If he bought the car for cash / a bank loan at the end of the term he'd have the value of the car at that time - say £22K. This way hes paying out £30,000 with NOTHING to show for it. Hes now "saving £22,000" by doing this.

caprikid1

F1F93 wrote: »

You'll be paying 9.5k in monthlies. Including the 4k or so you'll get back as cash, you will have paid about 5k. For a 51k car. Okay, yes, you gave up your car worth 24k. But still you haven't paid that much.

If you were to pay cash for the new car it would cost you 27k cash plus your part ex.

So if your car is not worth more than the balloon payment, be aware that you have handed over £22k less than you would have done had you paid cash.

With such insane calculations you must work in the industry of PCP or car sales.


Sometimes it worrys me that people are unable to see that he is giving them over £30,000 to borrow a car !!. If you think that is £5,000 for a £51K car it truly worries me.

wgl2014

OP - as has been said above changing cars to save you current vehicle depreciating makes no sense.

Is there any other reason to change?

If not then stick with what you have.

System

So currently you have car that has a value of 24000 based on trade in and no finance against it, if you use that full value against a new car on PCP you will basically lose that money. New car 51k three years down the line will be worth 27k. You sell it on pay off finance you get 3k back.


why not just light a fire under the car as that amounts to the same thing