PCP Financing Advice

bpk101

Hi,

I'm looking to finance a brand new Nissan Qashqai Tekna and visited a local Nissan approved car dealership at the weekend. I'm based in London.

For the car i want i was offered a PCP deal (i prefer the flexibilty of a PCP over a lease but realise it can work out a little bit more) for 48 months at £360 per month, i was told however that the price could come down once we were 'ready to make a deal'. The salesman was reluctant to issue a complete offer including Ts&Cs etc. with this reduced deal as he argued too many people take that deal away and use it to get more competitive deals elsewhere. To find out the reduced price i'd need to go back in store and sit down with finance with a view to signing something. :huh:

Today i read a good tip that if you live in the south it's worth calling a few dealers in the north as you can often get a better deal. I picked a couple at random from the official Nissan website, called up and was offered the exact same car over 48 months for £300 per month, they are offering to deliver the car to London for £500 (or i can of course pop up on the train and collect for the price of a train ticket and the return petrol). I would however need to drop into a London based dealership to sign the finance agreement as it can't be done via email.

I'm looking to move fairly quickly on a deal as i want the car before Christmas. This will be my first car purchase and i need a bit of advice...

1. Does this deal sound too good to be true? Should i be wary of anything or are all authorised Nissan dealers (or any car manufacturer for that matter) listed on the official manufacturers website deemed legit?

2. What should i expect the dealer based in the north to supply me with via email before i go in and sign any finance agreement in London, am i looking for any sort of deal in principle that covers any particular terms etc?

3. Technically what does 'brand new' mean on a PCP deal. Straight out of the factory with 0 miles on the clock or can it still be classed as new if it was a used and returned car but still a 2019 model?

4. Should i take this offer and use it to shop round for a better deal at the risk of leaving it too late to take delivery before Christmas or is this likely as good a deal as i'd get?

5. Any other good tips or words of advice?

Thanks.

daveyjp

A PCP is a complicated calculation which dealers use to bamboozle the buyer.

The £360 and £300 mean absolutely nothing without details of all the other figures used to get to the monthly payment.

Price of the car
Deposit
Term
Trade in
APR
GFV
Mileage limit

£300 may well be less, but if you need twice as much deposit and can only do 2,000 miles a year before being charged 15p a mile it may not be.

4 years is also a long time to be 'renting' a car. After three years it will have no warranty and repairs will be required. Tyres, brakes, major service etc etc. Factor these costs in at dealer prices so you get a true idea of costs.

bpk101

Just to reiterate, the deal is for the exact same car model and specification so I’d presume the sale price would also be roughly the same?

Likewise the offer is based on the same financing plan, so same deposit amount (£4K), same annual mileage (10,000), same term (48months).

GFV, APR and trade in I wasn’t given with this initial cost but is something I can ask for to compare with the London deal. What should I consider when I get these details?

ratrace

bpk101 wrote: »

Just to reiterate, the deal is for the exact same car model and specification so I’d presume the sale price would also be roughly the same?

Likewise the offer is based on the same financing plan, so same deposit amount (£4K), same annual mileage (10,000), same term (48months).

GFV, APR and trade in I wasn’t given with this initial cost but is something I can ask for to compare with the London deal. What should I consider when I get these details?

Its a very expensive deal and pcp is a very expensive way to rent a car your deal is £300x48+£4000 deposit =£18,400

why not just go for a car like this one below and save yourself a load of cash its low miles plus nearly new

https://www.ebay.co.uk/itm/2018-68-Nissan-Qashqai-1-5-dCi-Acenta-Premium-5dr-White/254393943010?hash=item3b3b0f83e2:g:Np8AAOSwxFVdrPSJ


https://www.ebay.co.uk/itm/2018-NISSAN-QASHQAI/383205987076?hash=item5938db5304:g:SegAAOSw-KJdqZ5j


maybe not this car but somthing similar op, if i was you i would not buy a car on pcp well i would not go into debt for a carfull stop

if you went for the pcp in 4 years time you would have paid £18k with nothing to show for it how many days at work it take you to save 18k after tax my guess a lot, just take a small loan out for 5k from the bank and buy a small car that you will own if you really want to buy i always save and pay cash just thought i would give you another view point this is mse afterall

AdrianC

bpk101 wrote: »

I'm looking to move fairly quickly on a deal as i want the car before Christmas.

So it's just whatever they have in stock, not a factory order to your spec (colour, options).

1. Does this deal sound too good to be true? Should i be wary of anything or are all authorised Nissan dealers (or any car manufacturer for that matter) listed on the official manufacturers website deemed legit?

Every Nissan dealer is an independent company who have a franchise agreement with Nissan UK. They're selling the same basic product.

2. What should i expect the dealer based in the north to supply me with via email before i go in and sign any finance agreement in London, am i looking for any sort of deal in principle that covers any particular terms etc?

Assuming it's a Nissan-backed finance deal (which, from a dealer, it almost certainly will be), then it's the same finance product.

3. Technically what does 'brand new' mean on a PCP deal. Straight out of the factory with 0 miles on the clock or can it still be classed as new if it was a used and returned car but still a 2019 model?

It means a car that hasn't been registered to anybody before it's registered to you.
A used/"pre-owned"/"delivery-mileage"/"near-new" car would be one with 0 miles on that's been registered to somebody else - the dealer or Nissan UK - but hasn't actually been in the hands of a punter. They won't actually have 0.00 miles on the clock - they get driven about yards and onto and off transporters and trains en route to the dealer, as well as a test-drive as part of the PDI, to make sure the car doesn't have any obvious issues.

Obviously, a "delivery mileage" used car will be cheaper. Since you're picking from what's in stock anyway, the only real difference is that the warranty will be a bit shorter, because it started on the date the car was registered.

Then there's actual used cars - 6-12mo, maybe ~10k on the clock. Most will be ex-hire cars. They will be cheaper still.

4. Should i take this offer and use it to shop round for a better deal at the risk of leaving it too late to take delivery before Christmas or is this likely as good a deal as i'd get?

Only legwork will tell you that.

5. Any other good tips or words of advice?

Gap insurance, but not from the dealer. And don't get suckered into the paint protection etc add-ons.
Make sure you don't get suckered into a lower-than-expected mileage to try to chisel a couple of quid a month.

k6chris

£18,400 to borrow a bog standard car for 4 years is.......suboptimal! You can buy any number of nearly new for a fraction of that price, and you would be buying, not borrowing the car. Here is one car supermarket that has over 200 for sale (which should tell you something in itself). None are as expensive to buy as your deal is to borrow.



https://www.motorpoint.co.uk/used-cars/nissan/qashqai

facade

A new tekna is £27,145 OTR.


£18,400 is 68% of that, so it seems reasonable to me, You'd expect to lose about 70% in depreciation over 4 years if you bought it outright for cash (but you wouldn't be paying £27,145 I expect)


Go back to your local dealer for this "better deal", now you know they have to at least match it.

The APR and the GFV are irrelevant if you are determined to hand it back at the end of term.


If you might keep it, or would trade it in on another car, you want the lowest GFV possible, as any value over that left in the car would be yours.

AdrianC

facade wrote: »

A new tekna is £27,145 OTR.

List, yes. But I'd be very surprised if there weren't substantial discounts available.
A two-second google finds <£20k available to purchase. Brand new, no previous reg.

('course, that depends on precise spec.)

bpk101

Theres a number of reasons PCP appeals to me more than buying (unless I’m completely missing something)...

1. I get to change vehicles for another new vehicle at any time during the contract i.e. if I need to size up due to an additional family member for instance.

2. The car offered includes all the specifications i’m looking for (petrol, automatic transmission, heated seats, preferred colour etc). Finding a second hand car that ticks all these boxes might be tricky.

3. This is my first car (I’m 40+ but living in London never needed one!) so the thought of becoming a second hand car expert and trapsing round the country looking at used cars before Xmas is just a non-starter.

Leasing would be the other option and slightly cheaper but then i’m stuck in the deal with no chance of changing the car. Also from what I understand leasing deals are a lot more costly to end early.

tonyh66

bpk101 wrote: »

Theres a number of reasons PCP appeals to me more than buying (unless I’m completely missing something)...

1. I get to change vehicles for another new vehicle at any time during the contract i.e. if I need to size up due to an additional family member for instance.

2. The car offered includes all the specifications i’m looking for (petrol, automatic transmission, heated seats, preferred colour etc). Finding a second hand car that ticks all these boxes might be tricky.

3. This is my first car (I’m 40+ but living in London never needed one!) so the thought of becoming a second hand car expert and trapsing round the country looking at used cars before Xmas is just a non-starter.

Leasing would be the other option and slightly cheaper but then i’m stuck in the deal with no chance of changing the car. Also from what I understand leasing deals are a lot more costly to end early.

ending a PCP anytime before a couple of months near the end of the term would see you in negative equity, this also applies for changing the car part way through the term, you will owe money on the car you are getting rid of and need to find a new deposit (which applies anyhow because generally the balloon and equity balance at the end of the term, you might end up with a couple of hundred quid if you are lucky).
BTW £300-360 p/m for a Qashqai is rank! there are better cars for less.

DrEskimo

bpk101 wrote: »

Theres a number of reasons PCP appeals to me more than buying (unless I’m completely missing something)...

1. I get to change vehicles for another new vehicle at any time during the contract i.e. if I need to size up due to an additional family member for instance.

There is nothing unique about PCP and changing cars. It's important to realise that PCP is just a finance agreement. It is a way to borrow money to buy a car. It would be exactly the same process whether you buy with cash, buy with a bank loan or use PCP. The only difference is the amount you pay in interest charges. PCP will typically represent the highest in interest charges, due to the way the finance is repaid (deferred payment means the capital is repaid slower, so interest accrued over the term is higher).

2. The car offered includes all the specifications i’m looking for (petrol, automatic transmission, heated seats, preferred colour etc). Finding a second hand car that ticks all these boxes might be tricky.

Why not just a used version of the same car?

3. This is my first car (I’m 40+ but living in London never needed one!) so the thought of becoming a second hand car expert and trapsing round the country looking at used cars before Xmas is just a non-starter.

Again, why not just a used version of the same car...?

Leasing would be the other option and slightly cheaper but then i’m stuck in the deal with no chance of changing the car. Also from what I understand leasing deals are a lot more costly to end early.

Some comments in red. PCP is one of the most misunderstood finance packages I can think of.

It's a loan. No more, no less. Look at how much it will cost to borrow the money in terms of actual interest paid, and compare that with other methods of financing. The other cost is depreciation. That is less to do with how you finance the car, and more to do with buying a new vs used car.