Help understanding PCP quotes – how can a cheaper initial price cost more?

BOWFER

With regard to whether to buy or PCP, one of your last posts is telling in that you're stressed about getting rid of your existing car.
No worries with that with PCP, if your circumstances change or you simply don't like it any more, hand it back and walk away.
I already know 100% I won't ever, ever, want to keep a car after three years, so it's PCP (or lease) for me forever more.

AdrianC

Danydan said:

Apologies for missing the numbers out!  Hopefully, this is all clearly laid out (and doesn’t break any forum rules):

QUOTE 1
Retail vehicle price — £20233.33
Total vehicle factory options — £ 208.33
Number plates — £20.83
Discount — £1635.00
VAT @ 20% — £3765.50
VED Cost — £220.00
First reg fee — £55.00
Part-ex — £10576.00
Settlement — £12576.00
Customer saving — £1962
RRP — £24829.99
Our price — £22867.99
Deal cost to change — £24867.99

= Options Finance =
Cash — £2000.00
Payment —£355.56
Optional Final Payment — £9809.00
Mileage — 12000
Term — 38
Amount of credit — £21867.99
Total amount payable — £24340.10
Total Charge for credit — £1452.11
Deposit allowance — £1000
Rate of interest — 2.10%
Excess mileage charge — £0.06
APR — 2.9%

QUOTE 2
Retail vehicle price — £24855.11
Total vehicle factory options — £ 229.27
Number plates — £20.83
Discount — £1983.43
VAT @ 20% — £3699.99
VED Cost — £220.00
First reg fee — £55.00
Part-ex — £10600.00
Settlement — £12576.00
Customer saving — £2380.10
Our price — £22474.99
Deal cost to change — £24450.99

= Options Finance =
Cash — £2000.00
Payment —£344.07
Optional Final Payment — £9809.00
Mileage — 12000
Term — 38
Amount of credit — £21450.99
Total amount payable — £23927.82
Total Charge for credit — £1432.83
Deposit allowance — £1000
Rate of interest — 2.11%
Excess mileage charge — £0.06
APR — 2.9%

Well, that is definitely a wall of numbers...

Let's put them side-by-side.

Retail price - £20233.33 vs £24855.11

This is where your "But B is more expensive" is coming from, right?
But the first car also has an RRP entry further down. £24829.99

Total vehicle factory options — £208.33 vs £229.27
Number plates — £20.83 each
Discount — £1635 vs £1983.43
VAT @ 20% — £3765.50 vs £3699.99

OK, their VAT number works starting from the "Retail vehicle price" line for the first car, but not the second car.
I've got them at
20233+208.33+20.83-1635=18827.16x0.2=£3765.43
vs
24855.11+229.27+20.83-1983.43=23121.78x0.2=£4624.36

VED Cost — £220.00 each
First reg fee — £55.00 each
Part-ex — £10576 vs £10600.00
Settlement — £12576.00 each
Customer saving — £1962 vs £2380.10
Our price — £22867.99 vs £22474.99

At least we've now closed the actual prices - but I can't see how they got there...

DrEskimo

BOWFER said:

With regard to whether to buy or PCP, one of your last posts is telling in that you're stressed about getting rid of your existing car.
No worries with that with PCP, if your circumstances change or you simply don't like it any more, hand it back and walk away.
I already know 100% I won't ever, ever, want to keep a car after three years, so it's PCP (or lease) for me forever more.

That's not strictly true.

You can't just hand the car back whenever you want at all. You can only had the car back once you've either paid 50% of the total amount payable, or on that one single day right at the end of the agreement.

If after 12months into a 36month agreement your circumstances change, you are left either trading in and paying any shortfall, or paying to reach the VT point early.
Same with a lease. You can't hand it back, you have to pay early termination fees.

I don't understand this mentality that you're stuck with a car if you own it. You are free to sell it, trade it in to any individual or garage or online broker anytime you like..exactly the same way you would with a car on PCP you want to change out of early.

BOWFER

DrEskimo said:

BOWFER said:

With regard to whether to buy or PCP, one of your last posts is telling in that you're stressed about getting rid of your existing car.
No worries with that with PCP, if your circumstances change or you simply don't like it any more, hand it back and walk away.
I already know 100% I won't ever, ever, want to keep a car after three years, so it's PCP (or lease) for me forever more.

That's not strictly true.

You can't just hand the car back whenever you want at all. You can only had the car back once you've either paid 50% of the total amount payable, or on that one single day right at the end of the agreement.

If after 12months into a 36month agreement your circumstances change, you are left either trading in and paying any shortfall, or paying to reach the VT point early.
Same with a lease. You can't hand it back, you have to pay early termination fees.

I don't understand this mentality that you're stuck with a car if you own it. You are free to sell it, trade it in to any individual or garage or online broker anytime you like..exactly the same way you would with a car on PCP you want to change out of early.

I didn't say "hand it back whenever you want"

Danydan

At least we've now closed the actual prices - but I can't see how they got there...

Yeah that’s what I don’t get. I’ve messaged them (phones weren’t being answered) asking them to explain it. If a dealer isn’t willing to go through a quote line by line if needs be, it’s a red flag in my book. Might make me seem dumb but I want to know what I’m paying for.

And thank sure for the breakdown!

Danydan

photome said:

Have you priced your car  to sell on WBAC that may be an option

Aye. It comes out ridiculously low and I've read lots about how they will always find lots of faults and issues to knock money off the initial offer. They’re probably fine for a quick sale but I’m in no rush.