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PCP Payoff
Hi All
I’m currently looking at buying a car which sadly would need to be via a PCP initially, as the cost is slightly too great to get a low rate bank loan for. With the PCP rates being around 8% for a slightly used vehicle, I wondered what the implications would be if I took the PCP deal, then within the first 12 months settled the PCP. Would I save all of the interest and effectively only end up paying the headline capital value of the car (plus a bit for the year 1 interest charges)? Obviously you get the better deal from the Steelership as they are getting the finance kick back, but, how does early payment sit with the credit scoring agencies etc?
I’m currently looking at buying a car which sadly would need to be via a PCP initially, as the cost is slightly too great to get a low rate bank loan for. With the PCP rates being around 8% for a slightly used vehicle, I wondered what the implications would be if I took the PCP deal, then within the first 12 months settled the PCP. Would I save all of the interest and effectively only end up paying the headline capital value of the car (plus a bit for the year 1 interest charges)? Obviously you get the better deal from the Steelership as they are getting the finance kick back, but, how does early payment sit with the credit scoring agencies etc?
Best Wishes
simon.
simon.
0
Comments
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Yea this is perfectly feasible. But if you will be in a position to buy it outright in 12months, why do you need a PCP loan now?
Can you not just wait for 12months then do it? The interest charges in the first year will be a fairly big proportion of the total amount of interest payable. It's best to settle it as quickly as you can.0 -
Can you give any figures of the finance arrangement (including incentives) you have been offered and the car you would be getting? That may allow more constructive comments. Initial thought is that 8% is higher than you want to be paying in the current climate.0
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How old is "slightly used"? Have you compared with new car which may well have lower PCP rate and deposit contributions?0
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