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Buying outright, bank loan or PCP
Comments
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Sorry, but most of this is simply wrong.
You wont owe the finance company the full value of the car if you crash it at some point down the line - you will simply (like any HP agreement) owe them the settlement figure for the car at that time.
GAP insurance is a simple and easy way to minimise risk - you can get GAP insurance cheaply that covers RTI (return to invoice price) so you'd effectively get your deposit back too. This is common practice.
If you're buying ANY new car with ANY funding method, GAP insurance cost should be factored in - unless of course you're happy to have an insurance company pay out market used value on something you bought new a few months previous.
Perhaps.
But in this thread:
https://forums.moneysavingexpert.com/discussion/6070654/car-on-finance-written-off
You did make the case that insurance should cover the value of the car at the time of the accident.
Until the OP in the linked thread confirms that he/she has been put in a financial position where their car was paid off and they got their deposit returned, then I am not going to consider PCP.0 -
I was told to budget for two addition monthly "payments" for any PCP or leasing deal, one at the front to pay for GAP insurance and one at the end to cover the cost of scratches / dents etc. Not sure how accurate the figures are but it would seem to make sense in terms of coming up with a truer cost?? Thoughts???"For every complicated problem, there is always a simple, wrong answer"0
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Why should they get that money returned? It's not a "security deposit", returnable on safe return of the vehicle. It's a part-payment for acquiring the vehicle.Until the OP in the linked thread confirms that he/she has been put in a financial position where their car was paid off and they got their deposit returned, then I am not going to consider PCP.
Illustrative numbers:
£20k car.
£5k initial payment/"deposit".
£15k financed
Written off. £8k value at time of incident, £10k finance.
£2k shortfall for gap insurance.
Why would they get that £5k back on top of the £8k + £2k paid to the insurance?
The cost of the vehicle being below acceptable wear and tear levels is entirely down to how well you keep it. The standards are published, and you agree to them when you take the contract on. If you return the car in worse condition, you pay for that. Hardly unreasonable...? But the question is whether you're the kind of person who thinks a 3yo car covered in parking dinks and scrapes and ciggy burns is normal or not...I was told to budget for two addition monthly "payments" for any PCP or leasing deal, one at the front to pay for GAP insurance and one at the end to cover the cost of scratches / dents etc. Not sure how accurate the figures are but it would seem to make sense in terms of coming up with a truer cost?? Thoughts???0 -
Why should they get that money returned? It's not a "security deposit", returnable on safe return of the vehicle. It's a part-payment for acquiring the vehicle.
They would if they had "Return to invoice" GAP
Illustrative numbers:
£20k car.
£5k initial payment/"deposit".
£15k financed
Written off. £8k value at time of incident, £10k finance.
£12k shortfall for gap insurance to return to £20k invoice
£10k to policyholder.
Even I have GAP insurance, I have 5 year Return to invoice/Vehicle replacement, which means I will be quids in if I manage to write it off in year 5
I'm a bit worried at the moment- it is worth about 2k more than the invoice, so would I owe them as the market value is above invoice price? I want to go back to The Olden Days, when every single thing that I can think of was better.....
(except air quality and Medical Science)0 -
Yes, that's the difference between the two flavours of gap.They would if they had "Return to invoice" GAP
It almost makes you wonder why the roads aren't littered with bent end-of-finance cars under RTI GAP...Even I have GAP insurance, I have 5 year Return to invoice/Vehicle replacement, which means I will be quids in if I manage to write it off in year 5
No, the excess would come to you...I'm a bit worried at the moment- it is worth about 2k more than the invoice, so would I owe them as the market value is above invoice price?
<plays with straight bat>0 -
It almost makes you wonder why the roads aren't littered with bent end-of-finance cars under RTI GAP...
I wonder this too, seems a no-brainer to me, am I missing something? I want to go back to The Olden Days, when every single thing that I can think of was better.....
(except air quality and Medical Science)0 -
Perhaps.
But in this thread:
https://forums.moneysavingexpert.com/discussion/6070654/car-on-finance-written-off
You did make the case that insurance should cover the value of the car at the time of the accident.
No. That is not what i said. Please re-read it. I said that the insurance company would pay out a lot more than the raw trade price and a lot closer to what the O/P owed.Until the OP in the linked thread confirms that he/she has been put in a financial position where their car was paid off and they got their deposit returned, then I am not going to consider PCP.
No. The O/P will never get their deposit back and the finance wont necessarily be paid off (in fact its unlikely it will be). Thats not how it works.
Can i suggest you dont offer advice and opinion on car finance matters as you clearly dont grasp how it works and thus you're confusing the matters and distracting from the matter in hand?0 -
Why should they get that money returned? It's not a "security deposit", returnable on safe return of the vehicle. It's a part-payment for acquiring the vehicle.
Illustrative numbers:
£20k car.
£5k initial payment/"deposit".
£15k financed
Written off. £8k value at time of incident, £10k finance.
£2k shortfall for gap insurance.
Why would they get that £5k back on top of the £8k + £2k paid to the insurance?
lr1277 isnt talking about this thread though, hes talking about in the linked thread where the o/p there didnt even have GAP.
Hes totally muddied the waters here on this thread with misinformation, misquoting and misunderstanding.0
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