PCP isn't MSE

fred246

I have only taken finance once but immediate 'cancellation' of finance lost the manufacturer contribution. I had to wait, make one payment and then settle the finance. Is that different to the PCP?

BOWFER

Keep_pedalling said:

If the PCP deal came with a contribution, the MSE thing to do would be to go with it, but for no longer than 14 days. I ordered a new EV today, something I can afford to buy outright but to get the best price I have to go through the idiotic process of signing up for PCP, then once I have my hands on the car pay off the finance the next day. 

I doubt paying it off "next day" will still get you the discounts.
They all seem to have a minimum period of X weeks.

Keep_pedalling

Grumpy_chap said:

Keep_pedalling said:

If the PCP deal came with a contribution, the MSE thing to do would be to go with it, but for no longer than 14 days. I ordered a new EV today, something I can afford to buy outright but to get the best price I have to go through the idiotic process of signing up for PCP, then once I have my hands on the car pay off the finance the next day. 

Out of interest, which EV?
I agree this 'incentives' for PCP process absurd.

VW ID3. Right size and range and most importantly the only car in its class that takes a hitch for a bike carrier.

motorguy

BOWFER said:

Keep_pedalling said:

If the PCP deal came with a contribution, the MSE thing to do would be to go with it, but for no longer than 14 days. I ordered a new EV today, something I can afford to buy outright but to get the best price I have to go through the idiotic process of signing up for PCP, then once I have my hands on the car pay off the finance the next day. 

I doubt paying it off "next day" will still get you the discounts.
They all seem to have a minimum period of X weeks.

Read the fine print and dont take the salesmans word for it would be my advice.

The sales team will be bonused on successful finance deals being made.  Someone cancelling immediately would likely lose them their bonus, hence why they often quote longer times.

thegentleway

Keep_pedalling said:

thegentleway said:

My mum just bought a fairly newish i20 and despite her being able to pay for it in cash the salesman tried to sell it to her on PCP on the premise that petrols/diesel are going to be worthless soon with the electric revolution...

If the PCP deal came with a contribution, the MSE thing to do would be to go with it, but for no longer than 14 days. I ordered a new EV today, something I can afford to buy outright but to get the best price I have to go through the idiotic process of signing up for PCP, then once I have my hands on the car pay off the finance the next day. 

No contributions or discounts just 10% interest

BOWFER

Keep_pedalling said:

VW ID3. Right size and range and most importantly the only car in its class that takes a hitch for a bike carrier.

I was thinking about one of those, but saw the photos of the SEAT version this week and prefer it.
It's obviously like the ID3, but they've done enough to make it less 'fat' looking
Like an ID 3 has been to the gym.

Keep_pedalling

motorguy said:

BOWFER said:

Keep_pedalling said:

If the PCP deal came with a contribution, the MSE thing to do would be to go with it, but for no longer than 14 days. I ordered a new EV today, something I can afford to buy outright but to get the best price I have to go through the idiotic process of signing up for PCP, then once I have my hands on the car pay off the finance the next day. 

I doubt paying it off "next day" will still get you the discounts.
They all seem to have a minimum period of X weeks.

Read the fine print and dont take the salesmans word for it would be my advice.

The sales team will be bonused on successful finance deals being made.  Someone cancelling immediately would likely lose them their bonus, hence why they often quote longer times.

I am going on what many other people have done successfully. I have been upfront with the sales guy so he knows there will be no bonus paid for finance. There is a 45 day interest penalty for settling early, but the law also gives you a 14 day cooling off period, so cancelling within that period just leaves you having to pay a few days interest.

If things change between now and when the car is available (Sept probably) and I do have to pay back the contribution then I have not really lost anything over opting to purchase outright from the start.

Herzlos

fred246 said:

I have only taken finance once but immediate 'cancellation' of finance lost the manufacturer contribution. I had to wait, make one payment and then settle the finance. Is that different to the PCP?

You fell for a salesmans lie. They probably lose their comission if you clear it in the cooling off period, since you'd only pay pro-rata interest for the first 14 days and then a 59 day penalty beyond that.

Once you've got the car and the finance, they can't come back at you for the lost incentive for something you are legally entitled to do.

fred246

Herzlos said:

fred246 said:

I have only taken finance once but immediate 'cancellation' of finance lost the manufacturer contribution. I had to wait, make one payment and then settle the finance. Is that different to the PCP?

You fell for a salesmans lie. They probably lose their comission if you clear it in the cooling off period, since you'd only pay pro-rata interest for the first 14 days and then a 59 day penalty beyond that.

Once you've got the car and the finance, they can't come back at you for the lost incentive for something you are legally entitled to do.

If you withdrew from the agreement in the first 14 days you had to repay £950 deposit allowance. So instead you had to exercise your right of early repayment. It did cross my mind that they might not ask for the £950 back but it didn't seem worth taking the risk. £950 was much greater than the interest even if I had paid it till the end of the agreement.

fred246

Biggus_Dickus said:

fred246 said:

Grumpy_chap said:

motorguy said:

Grumpy_chap said:

I don't think it is possible to answer the question whether PCP is (or is not) MSE, without also considering within that answer whether taking finance for a car is MSE.

And the reason that question cant be answered is because MSE is not about only buying what you "need".  Its about buying what you want at the best price possible.

There would be quite a compelling case to say buying a brand new car is not "money saving" because there are easily cheaper alternatives. 

MSE is not about saving money by only getting in life what you need its about ensuring you save money on what you want.

I quite happily agree that being MSE is not simply about meeting needs at lowest cost - else we'd all be wearing rags, driving Bangernomics and eating dry bread but with ££££ in the bank

BUT that extract you have commented upon is with reference to the previous poster linking car finance to mortgage finance.  The two are, IMO, not comparable:

• because one is meeting a need and (in normal expectations) an appreciating asset.  
• The other is rarely meeting a need but is meeting a want and a depreciating asset.

I also accept that the luxury mansion is meeting want in addition to need, so the want / need part can be ignored from both.  I still don't think that the finance can be considered as comparable because of the inherent difference between acquiring an appreciating or depreciating asset.

Now, if you'll excuse me, I'm very busy.  I've got to buy a static caravan to live in and an wire-wheeled E-Type to commute to work

Our next door neighbour used to have an E type. I used to see this never ending bonnet and finally a window. I could never work out how you could come out of a T junction. Surely someone would smash into the bonnet while you were trying to edge out to get a view.

My mate had an e-type many many moons ago and that never ending bonnet certainly caused a few problems;..under heavy acceleration (which is something e-type drivers did all too frequently) the front end would lift alarmingly,....totally obscuring the view ahead.

Very dangerous in truth and it definitely scared the hell out of me as a passenger. Periodically driving ‘blind’ ain’t my idea of fun.

I don’t know if they all suffered that problem but my mates’ e-type certainly did. Other than that it was a thing of beauty. I don’t know if it’s still around somewhere but if it is the car will probably be worth a few bob now. 🤑

 

Interestingly the E-type owner I knew was always doing exactly that. He would apply full throttle and when he was going fast enough lift the front end. He worked for British Caledonian. That was a while ago.