PCP - Miles don't matter

motorguy

AdrianC wrote: »

Because it was the only bit I was replying to.


As far as the financier is concerned, there are only two things happening at the end of the contract.
The car goes back to them (excess mileage payable)
The car gets bought from them for the balloon (excess mileage not payable)

It's that simple.

Ah right, and is this a consumer site or is it a finance company site?

Because the consumer has three main options - return the car, pay the residual or trade the car in, its the finance company that only has two - get the car back or get paid.

The consumer doesnt have to pay the residual and to say they are restricted to either hand the car back or pay the residual would be wholly wrong. The third and most often chosen option is trade the car in, which is what happens probably 90% of the time.

No need for the consumer too worry about paying the residual themselves.

Really struggling to understand why you're literally attempting to create an argument out of nothing here?

motorguy

Heres a prime example from a Ford Main Dealer

https://www.premierford.co.uk/finance/ford-options-pcp/

Neatly summarised by them as Renew, Return, Repay.

Nowhere is it say "well theres only two options at the end, give them the car back or find the means to pay the residual"

ANDY597

I have a quick question on this subject, but its a little off topic from the OPs so apologies if I should have opened up a new thread.

Lets say that I wanted to buy a new car at 19K, and I intend to do 20K miles per annum. If you take the finance teh dealer is offering a 2K finance contribution with interest on the pcp is 5.9%.

Would I be best to initially take the finance, the pay it off with a lower APR loan after day 1?


I intend just to own the car after say 3 to 4 years and keep it until it dies a horrible death

EmmyLou30

Another option of course, as this is MSE.....buy a car that you can actually afford without the need for expensive PCP finance deals or take out a small personal loan at a much lower interest rate so you actually own the car albeit not a shiny new one. Avoids all the issues should the car get written off too of being in negative equity.


If £15 a month difference is a big deal then you can't afford the extravagance of a new car I would say. Just my opinion :-)

marlot

ANDY597 wrote: »

I have a quick question on this subject, but its a little off topic from the OPs so apologies if I should have opened up a new thread.

Lets say that I wanted to buy a new car at 19K, and I intend to do 20K miles per annum. If you take the finance teh dealer is offering a 2K finance contribution with interest on the pcp is 5.9%.

Would I be best to initially take the finance, the pay it off with a lower APR loan after day 1?


I intend just to own the car after say 3 to 4 years and keep it until it dies a horrible death

You can withdraw from the PCP within the first 14 days. Whenever I've done that, I've been allowed to keep the finance contribution. The only charge has been a tiny interest charge for the few days I've had the money.



I've then paid from savings, but you could use some other finance deal.

AdrianC

motorguy wrote: »

Ah right, and is this a consumer site or is it a finance company site?

Because the consumer has three main options - return the car, pay the residual or trade the car in

Two of those are the same thing. The car goes back.
What happens next is what differs - start a new contract, or don't start a new contract.

motorguy

AdrianC wrote: »

Two of those are the same thing. The car goes back.
What happens next is what differs - start a new contract, or don't start a new contract.

Not to the consumer they aren't.

Which is my point. Finance company has two options, consumer has at least three.

And we are talking from the consumers perspective aren't we?

AdrianC

The consumer can see things however they like. That doesn't affect the reality.

Either the car goes back to the financier - when excess mileage applies - or the financier gets paid the balloon - when it doesn't.

What the consumer then buys off somebody else, whether wrapped up as part of the same deal or not, doesn't affect the reality of the end of the contracted PCP.

lopsyfa

motorguy wrote: »

Really? So people dont ever

• Part exchange the car in advance of the final payment being due
• Part exchange the car when the final payment is due

Neither of which involve the person actually paying the balloon.

Which was my point.

At any of these two points, the mileage will be considered in the part exchange value offered. For example, when the final value is due, the dealer will not give you the GMV to settle the finance on the car if you have done 40k mileage more than contracted on the car. They will roll the negative equity (due to the mileage) into the next finance. That is why I said the OP will still be liable for the mileage whether directly or indirectly. Because the deal is done together, most people don't see that they are indirectly paying for the mileage.

lopsyfa

motorguy wrote: »

Not to the consumer they aren't.

Which is my point. Finance company has two options, consumer has at least three.

And we are talking from the consumers perspective aren't we?

But the third option comes with paying for the negative equity which is a penalty for the mileage - so the mileage matters.