Pcp

motorguy

Simonr66 wrote: »

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

+1

O/P - for a similar effect, spend the afternoon flushing £20 notes down the toilet then extrapolate that feeling out for three years....

F1F93

motorguy wrote: »

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.

I just want to make my point clearer as I realised that the point I was actually trying to make obviously didn't come through.

I was talking about only the cash handed over in my post. Nothing to do with total amount paid. OP will hand his car over, get 4k back, then pay out 9k, so a net outflow of cash of about 5k.

So, given that the OP was cautious about the fact that he might not have much equity at the end to pay off the finance, I was trying to emphasise that he hasn't paid much cash over. If it was a choice of cash vs pcp, OP hasn't paid out the initial 27k so should have this (less the monthlies) available for a deposit next time.


To put it differently, OP wants to move from a 24k car to a 51k car. He needs to pay 27k cash - with the PCP he won't really do this until the end.


Hopefully this makes my point clearer - apologies for any confusion caused with my previous post.

F1F93

caprikid1 wrote: »

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.

As mentioned above, I fear that my point wasn't clear enough and I apologise for that.

It is not 5k for a 51k car. It is 5k CASH, plus a 24k car in exchange for a 51k car for 3 years and 27k debt left over at the end.

As said above, my point was that OP will be handing over very little CASH compared to buying outright so can use some of this as the deposit for his next one, if he wished.

Brummie85

Hello Jack,

You've already had some good advice here. Don't do it!

The trade-in price is probably a notable amount below market value. They are making money from you here as well, but selling privately can be a hassle.

The balloon figure makes almost no difference to them and is tipped in their favour overall. If you hand the car back, they've made money from you for 3 years and get to make more money reselling the vehicle. If you come to the end of the term and the car is worth less then the balloon, unless you buy it outright your £30k is gone. You lose - they don't.

If the car you have is worth £24k as a trade in, it can't be old or low spec at all. I'd urge you to keep it and then keep your money. It's better to lose money on something you own and don't owe for, instead of losing money on something that you don't own but do owe for.

If we can't talk you out of it. Look at your options. Use a service like Carwow to get 5 dealers to compete on the spec of the car you want. But don't take the figure given here as the best deal. They get a lot of time wasters and dreamers, so often won't give out their best offers because they can't tell who is serious, especially when the cars get more expensive.

In many cases dealer finance packages aren't even close to the best deals. Shop around. You won[t have to look very far to get something you can use to negotiate a better offer with.

Maybe look at the car you want 'nearly new'. I bought my car at 1 year old with under 6000 miles and in that time it lost at least 50% from the new list price. But some cars fare better then others over 12 months, meaning that 2nd hand deals are less attractive. The Porsche Macan is one such example. It holds it's value so well intially. I know someone who bought one whilst waiting for a Cayman to be built. When his car was ready 6 months later he sold the Macan and I think he was only down £200. By then most cars are losing £££££.