PCP Financing Advice

Penelopa.Pitstop

bpk101 wrote: »

We can then pay the optional balloon payment / GFV of £10,392 and own the car for a total amount paid of £28.888.

This is only £973 more than had we bought it cash at the very start. With regards to depreciation the car will still be worth the same amount at the end of the 4 years had we bought it new or financed it.

Except, you wouldn't want to pay full price, you would want to pay discounted price, let say quoted £23K and suddenly there's £5K difference in total cost.

I suggest going to the websites mentioned earlier and do the quotes for specific car you want. On Carwow you will get 5-6 offers, possibly even from the same dealership you already visited if it's local one. Other companies will send you quotes. As you noticed, the dealerships from North are usually more competitive and in some cases will be happy to deliver the car.

To give you example, I acquired new cars from following locations: Coventry, Stoke on Trent, Leeds, Dundee, Liverpool, some of them delivered, some of them collected. I live in London.

bpk101

Penelopa.Pitstop wrote: »

Except, you wouldn't want to pay full price, you would want to pay discounted price,

I have actually had a few offers for the same new model via Carwow for £23k this morning. But the question is, is the maths sill right with regards to the previous £27k car. Am i just paying £973 more after 4 years than if i had bought the car outright to start with?

Obviously i'm not going with the £27k deal but i just want to establish if the maths is correct.

DrEskimo

bpk101 wrote: »

I have actually had a few offers for the same new model via Carwow for £23k this morning. But the question is, is the maths sill right with regards to the previous £27k car. Am i just paying £973 more after 4 years than if i had bought the car outright to start with?

Obviously i'm not going with the £27k deal but i just want to establish if the maths is correct.

Yes, but as AdrianC states, this is due to the deposit finance contribution.

If you were a cash buyer, you would simple take it on PCP then settle the next day, thereby still taking advantage of the deposit contribution discount as well. So the saving £3,223, not £973.

As you will see from your CarWow quotes (and others online), it's not unusual for dealers to offer similar levels of discounts for cash buyers, or even better discounts. I have had this on a few cars I have looked at.

So, your maths is right, but in real life the cash buyer would take advantage of that deposit contribution as well, so the saving is much greater.

bpk101

DrEskimo wrote: »

If you were a cash buyer, you would simple take it on PCP then settle the next day

Yes i've heard of this tip before, unfortunately i wouldn't be in a position to settle the next day. I suppose i could shop around for another financing option (i.e. with a bank) with a better APR to settle up but things get quite complicated then.

So given the maths are right, and i'm now getting more competitive deals through Carwow for the same new car (£23k vs. £29k) ... i can't see much argument against a PCP deal other than it might cost me around £1k extra over 4 years which for the convenience factor alone i think is reasonable.

Again, unless i'm missing something completely?

What other risk factors are there apart from going over the agreed milage? At 8p a mile even if i did 2000 miles extra that's only £160 right?

k6chris

bpk101 wrote: »

What other risk factors are there apart from going over the agreed milage? At 8p a mile even if i did 2000 miles extra that's only £160 right?

The 'risk' that keeps on appearing here is that a lot can change in 4 years and you are making a mjor financial commitment. So if your job is likely to change, or you are going to get board etc, just double think the commitment you are making. You might want to think about GAP insurance too, in case you write off the car, as your insurance will not pay what you owe to the leasing company.

bigadaj

bpk101 wrote: »

Yes i've heard of this tip before, unfortunately i wouldn't be in a position to settle the next day. I suppose i could shop around for another financing option (i.e. with a bank) with a better APR to settle up but things get quite complicated then.

So given the maths are right, and i'm now getting more competitive deals through Carwow for the same new car (£23k vs. £29k) ... i can't see much argument against a PCP deal other than it might cost me around £1k extra over 4 years which for the convenience factor alone i think is reasonable.

Again, unless i'm missing something completely?

What other risk factors are there apart from going over the agreed milage? At 8p a mile even if i did 2000 miles extra that's only £160 right?

Your getting a fairly low finance rate due to the manufacturer subsiding it for sales, we've obviously been through the issues around incentives above so it is costing you several thousand more in reality, whether you can get cheaper as a loan will depend on your situation.

Risks could be damage to the car which you'd have to pay to get fixed or get charged for if you hand it back. Writing off the car could be a risk as well addressed by gap insurance.

An extra 2k miles isn't really a lot, we've seen cases on here of people going much more over and getting charged, if you went ten thousand over then that's an extra £800.

Have you looked at leasing as well for comparison, also see what pre reg offers are like, sometimes they offers a big saving, or maybe one year old cars that probably come ex rental but could be pushing half list price and still have the remainder of the manufacturers warranty.

AdrianC

bpk101 wrote: »

So given the maths are right, and i'm now getting more competitive deals through Carwow for the same new car (£23k vs. £29k) ... i can't see much argument against a PCP deal other than it might cost me around £1k extra over 4 years which for the convenience factor alone i think is reasonable.

£3k+.

Are you really getting the £2,250 on top of the £6k discounted price? (And is it really PCP-only?)

bpk101

AdrianC wrote: »

£3k+.
Are you really getting the £2,250 on top of the £6k discounted price?

Well it turns out... not :mad:

So basically their contribution was factored into the cars price at the outset (rather than added on later like other dealers i've spoken to) which is why i guess it featured on Carwow as an 'offer'? That's annoying.

AdrianC wrote: »

(And is it really PCP-only?)

What do you mean exactly? The car is available at a cash price of £23,219 or on PCP at £23,669.

AdrianC

bpk101 wrote: »

Well it turns out... not :mad:

<unsurprised>

So basically their contribution was factored into the cars price at the outset (rather than added on later like other dealers i've spoken to) which is why i guess it featured on Carwow as an 'offer'? That's annoying.

So it's still £23k rather than £27k-£2k=£25k.

(And is it really PCP-only?)

What do you mean exactly?[/quote]
On the £27k deal, was the £2,250 "dealer contribution" only available on a PCP purchase, or would they have given you it on a cash purchase, too?

I mean, obviously, it's academic, because you've now twigged that you can get a FAR better deal through a bit of shopping around, but...

The car is available at a cash price of £23,219 or on PCP at £23,669.

So buying cash is going to be the thick end of £4k cheaper.

What are the numbers on that PCP?

bpk101

AdrianC wrote: »

What are the numbers on that PCP?

The total amount of credit:
£19,669.00

The duration of the credit agreement:
49 months

Repayments:
1 repayment(s) of £249.46 (made up of the first instalment of £249.46 and any finance facility fee which is payable). You must then pay 46 monthly repayment(s) of £249.46, followed by 1 monthly repayment(s) of £249.22, followed by 1 Final repayment of £10749.95

The total amount you will have to pay:
£29,723.79

The rates of interest which apply to the credit agreement
4.99% per annum fixed

Annual Percentage Rate of Charge (APR)
4.99% APR