PCP question
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So am I right in assuming that if going for a PCP, you would be best putting down a large a deposit as you can and going for the shortest possible repayment term to minimise the interest. Then buy it outright at the end by paying the balloon. And then selling the car?0
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So any PCP with APR above bank loan is pointless? Although isn’t it that with a bank loan, there’s more risk of you losing a lot from depreciation?
There are also finance contributions, for example with PCP:
List Price £39,425 OTR
Dealer contribution £4975 <<< can get about this with cash as a discount
Manufacturer contribution £3000 <<< can only get this with a PCP deal
Customer balance £31,450
Customer deposit £3200 then 47 x £399. plus GFV £13,517
Fee? £1
Total payable from PCP = 35471
Cash price = 39425 - 4975 = 34450
So PCP finance cost = 35471 - 34450 = £1,021
Using Money Supermarket, if paying cash (price 34450) with same 3200 deposit and then using a 4 Year loan at say 3.9% APR with total repayments = 33,756
So loan finance cost = 3200 + 33756 - 34450 = £ 2,506
So just for this example:
- PCP is cheaper
- PCP delays more payments for longer
- PCP gives option to return car, loan does not0 -
So just for this example:
- PCP is cheaper- PCP gives option to return car, loan does not0 -
As long as you don't exceed the pitiful mileage allowance or have any damage above reasonable wear and tear when you return it.
....but only without penalty when you've repaid 50% of the total price including balloon payment typically only reaching that point in the last 6-12 months of the PCP deal. A loan gives you a car you can sell which will leave you with money in your pocket to buy something cheap to run around in, something you won't have if you return a car on PCP.
Mine was 0% APR and the mileage allowance was agreed between me and the dealer based on my average mileage from my old car.
I bought the car at the end though so didn't need to worry about wear and tear0 -
There are also finance contributions, for example with PCP:
List Price £39,425 OTR
Dealer contribution £4975 <<< can get about this with cash as a discount
Manufacturer contribution £3000 <<< can only get this with a PCP deal
Customer balance £31,450
Customer deposit £3200 then 47 x £399. plus GFV £13,517
Fee? £1
Total payable from PCP = 35471
Cash price = 39425 - 4975 = 34450
So PCP finance cost = 35471 - 34450 = £1,021
Using Money Supermarket, if paying cash (price 34450) with same 3200 deposit and then using a 4 Year loan at say 3.9% APR with total repayments = 33,756
So loan finance cost = 3200 + 33756 - 34450 = £ 2,506
So just for this example:
- PCP is cheaper
- PCP delays more payments for longer
- PCP gives option to return car, loan does not0 -
With PCP, you can still buy then sell if market value is above GMFV though can’t you? Also, I’ve noticed that a 66 car is worth a lot less than a 17 car even if they were registered only a few months apart. Why is this?0
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