Basic pre pcp info

Dandytf

Only re considering pcp lately.
179*48
3.3k Balloon type payment.
10k miles p.a.
My pre deposit concern.
What happens if for any reason I want to trade in year 3 -does the balloon payment need paid by myself.
Also the fgv -awaiting the details again -as this is 2015 car and upto 4years finance so car is going to be between 9 or 10 years old -is guaranteed values set this early actually accurate.

Edited as wanted 36 months changed to 48 months for the 179 payments.

motorguy

Whats the APR on the loan?

APRs are usually very high on used car PCP deals, so be careful of that.

When you trade in either at the end of term or even during the term the dealer will get a settlement figure from the finance company (or the residual value if at the end of the term) and then thats taken off the value of the car. So lets assume the car is worth £3.5K at trade in time, the residual value is £3,300 so you'd end up with £200 back. If the value was less than the residual you'd simply hand the car back.

APR is key here though, so find out what it is before doing / signing anything.

Also, how much is the car and how much deposit are you putting in, if any.

I would predict a personal loan would work out a lot cheaper in this case.

neilmcl

The balloon is only payable at the end of the agreement if you want to keep the car. If you want settle earlier, either by yourself or by trading in, in which case the dealer will settle your finance, the settlement figure will be based on what the current value of the car is at that time and the amount you still owe.

Finance companies are very adept at calculating what the future value of a car will be, they've been doing it for years don't forget, so yes, the GFV will be fairly accurate.

Personally I would never take out a PCP on a used car, it just doesn't make very good financial sense when there are other cheaper, or VFM, options available.

Dandytf

Thanks everyone for their reply's.
Apr I think is possibly 8%
Deposit 300 cash
I would be trading in my current 2014 car 36k miles finance would be settled year 2 of 4 years HP
The balloon payment info mentioned is very useful as my trade in car ir similar model with 36k miles is getting upto 4.5 k approx to clear finance.
I can only quote new used car I think GFV was in 5to5.5k range-mileage from 7k shouldn't be any more than 27-30k from year 3
I don't particularly like pcp either though it seems to me across two different dealerships tha HP payments have rocketed-my quoted new used car would have been over 200 per month which led me to consider pcp

Dandytf

Forgot to mention the cost of to be purchased car -it's since reserved online so no screen price today.
Maybe 7495 screen price.
I don't ave the pcp quote though did see it for a few seconds yesterday.
I since have e-mails advising the car has bee ordered and some gap insurance info -haven't taken this yet to be offered on collection as the garage is a few miles from home.
My understating is I should over next few days receive some garage website log in details when hopefully I can access the pcp info.

neilmcl

I'm struggling to make sense of this, why are you trading in your current car which is similar and only 1 year older and on finance for another used car on finance? Surely in the long run it'll be cheaper to continue to pay off the HP on your current car or get a cheap loan and settle it.

loskie

pcp a VERY bad idea for a used car, either take out a loan, pay outright or HP.

Dandytf

As the option of another car a few years later is why I'm considering pcp route.
+ .9 car is reviewed as slightly better than my 1.2,
Personal loan isn't a option-though agree it would make sense apr/cost wise.
Any particular reason why pcp is not a good idea is it deprecation or what their calling negative equity-I dislike that equity language.

jimjames

Dandytf wrote: »

As the option of another car a few years later is why I'm considering pcp route.
+ .9 car is reviewed as slightly better than my 1.2,
Personal loan isn't a option-though agree it would make sense apr/cost wise.
Any particular reason why pcp is not a good idea is it deprecation or what their calling negative equity-I dislike that equity language.

Is it really worth it for "slightly better"? 2014 to 2015 is not a few years, it's 1 year and your car is already 13 years newer than mine so it's got a lot of life left in it yet. If your sig is correct isn't that worth sorting before spending more?

Cornucopia

Dandytf wrote: »

Maybe 7495 screen price.

So... the car is priced at £7495, and you'll be paying £8592 over the 4 years, plus £300 deposit, and then potentially either walk away or pay a further £3300 balloon payment - for a total of £12192.

That sounds like a bad deal to me.

I don't have a problem with PCPs, though, and £179pm is brand new car territory.

Dandytf

Cornucopia wrote: »

So... the car is priced at £7495, and you'll be paying £8592 over the 4 years, plus £300 deposit, and then potentially either walk away or pay a further £3300 balloon payment - for a total of £12192.

That sounds like a bad deal to me.

I don't have a problem with PCPs, though, and £179pm is brand new car territory.

Agreed similar car is 14k brand new, my potential purchase had 7k miles so not new though not very far away in terms if miles used.
I'm mot in headline grabbing rates territory either t.b.h.
Next option could have been 27k miles @150 per month, though I thought lower mileage would be preffferable.