PCP advice - take it not?

FatherDougal

Hi - hoping for some advice please!  I've never bought a new car before (only ever had company cars) and am a bit flummoxed as to what would be better for me financially.  I'm looking at a new car at £80k, and have the choice of either buying outright with no discount, or taking PCP with a £1k dealer contribution.  My plan would be to pay the PCP off completely after 3 months which I've been advised is the right period of time to ensure no early termination.

PCP terms - car amount £79k, deposit £32k, final value payment £39k, meaning borrowing 8k over 3 years at 10,000 miles.  Can anyone smarter than me work out if I'm better off just paying cash for full amount or 3 months payments plus interest?  How much would I be saving/losing by comparing cost of the PCP for 3 months against the £1k saving from taking it?
Apologies if this is a numptie question, but this is a bit new to me and would appreciate advice!
Thanks

FatherDougal

Sorry, I should have said APR is 6.4% - doh!

Car_54

When I bought on PCP a couple of years ago I was able to pay it off immediately with no penalty. I don't think things have changed.

Who is your "advisor"?

DrEskimo

Yea the 3-months minimum period is not in your contract and there is simply no way for this to be clawed back. Many theorize that this is how long a finance agreement needs to be active for the dealer to receive commission from the finance company.
 
Take the PCP and settle as soon as you can, unless you feel you have a moral obligation to the dealership? Alternatively you could pay it down to a very small amount then leave that running for a few months?

Have you checked online brokers and various dealers to see if there are further discounts to be had? CarWow is a good place to start.

FatherDougal

DrEskimo said:

Yea the 3-months minimum period is not in your contract and there is simply no way for this to be clawed back. Many theorize that this is how long a finance agreement needs to be active for the dealer to receive commission from the finance company.
 
Take the PCP and settle as soon as you can, unless you feel you have a moral obligation to the dealership? Alternatively you could pay it down to a very small amount then leave that running for a few months?

Have you checked online brokers and various dealers to see if there are further discounts to be had? Carwow is a good place to start.

Many thanks - you've hit the nail on the head - it's a dealership I have a relationship with and the contribution is from the manufacturer.  I had an 'off the record' discussion with the dealer and the 3 month period came from them as the period of time after which they wouldn't get hassle from the manufacturer.  Which answers your question hopefully, Car_54
So with the 3 month time period paying full monthly amount then settling the entirety off, any advice on how much that will cost in interest compared to the £1k contribution?

NottinghamKnight

About £800 ish?

Grumpy_chap

Can you not get a somewhat larger discount than the £1k finance incentive, then discuss the best finance options so you get the incentive as well?  Try negotiating the interest rate down so that the interest you do pay is minimised.

Car_54

Car_54 said:

When I bought on PCP a couple of years ago I was able to pay it off immediately with no penalty. I don't think things have changed.

Who is your "advisor"?

I was buying an Approved Used Jaguar, with substantial "contributions" from both Jaguar and the dealer. I specifically asked the salesman and his finance sidekick whether early repayment would affect their commission, and they both said "No". In fact, the suggestion of early repayment may have come from them!

Ectophile

An $80K car, and they are offering a whole £1K discount.  Either it's in exceptionally high demand, or they think you are desperate to buy it.

Have you tried shopping around?

FatherDougal

It's a high demand car, only made in small quantities, with a small dealer network - to be honest, from others on a car forum who have bought this car, there normally isn't any discount at all, and the APR % is unprecedentedly low for them.  Appreciate the Jaguar feedback, but this manufacturer and dealer seem to have a different commission timeline.
Basically I'm sure the deal is the best I can get on the car, it's just the financial difference between buying outright and a few months PCP

Grumpy_chap

At £80k, I am very surprised there is not a bigger discount available.  If it was an £80k EV, I'd expect zero discount right now, but other than that, the "zero discount high demand" tag is normally only applicable for "exotic" cars like Ferrari.  £80k cars sit in a rather odd middle-ground and they should need to fight for your custom.  Certainly, cars like the A8 fail to fit the OP's brief of high demand, small quantities, small dealer network.
Maybe a Morgan hits the £80k and no discount band.