Getting into the PCP Game

little_green

This thread has given me a few laughs over the 14 pages. 
Anyway I'm still not clearer.... 
If you had the money to buy the car outright is pcping it beneficial in anyway? Or overall will it always cost more (unless 0% interest) ? I get confused as generally pcp deals on new cars come with manufacturers contribution which buying outright tends not to (I think) so if this were the case  it would come down to whether or not the mf contribution is higher than the added interest you would be repaying. 
So many people seem to love pcp but whenever I consider it it comes back to the bottom like that over the long term I would be paying more so what's the point? Seems silly. 

A further questions about depreciation. At what approx age of car would be best to look at to avoid the biggest hit of depreciation.

Grumpy_chap

So, take the PCP, get the manufacturer's contribution, then clear the balance in full to avoid the interest charges.  By that point you have paid cash (effectively) but also benefitted from the marketing promotion.

IF you take the PCP and then don't pay it off, you will usually pay more overall even after the contribution.  0% interest is the exception.

Ebe_Scrooge

little_green said:

A further questions about depreciation. At what approx age of car would be best to look at to avoid the biggest hit of depreciation.

Well, a generally-accepted rule of thumb is that a car will lose 30-ish % of its value in the first year, 50% after 3 years.  There are loads of variables - stick "car depreciation" into Google and you'll find tons of articles on the subject.  If you're looking at buying a used car, it still depends a lot on your budget.  For me personally, a one-year-old car, whilst being a bargain compared to brand new, is still way outside of my price range.  I tend to go for 4, 5, 6 years old, something like that.

But it's not a hard and fast rule, it depends entirely on the condition and history of the car.  Some makes are renowned for "lasting forever" - most Japanese cars, or Volvos for instance.  Of course, you can always buy a lemon from any marque, conversely you can buy a perfect example of one that's generally regarded as less reliable.  For me, I also consider the cost of parts.  I fully expect to have to pay for some repairs along the way - hopefully nothing too major if I've done my homework right!  But the cost for parts can vary considerably from one make to another, so it's an important consideration when buying an older car.

Advocado

BOWFER said:

jimjames said:

anotheruser said:

Anyone made this switch and have any advice? 

If you PCP then you don't own the car and are committed to paying those monthly payments for the duration of your agreement or until the point where you can cancel which is quite late on in the agreement normally.

With PCP you're free to sell the car at any point, as long as you settle the finance.
I did it myself only last week.
The PCP settlement figure from VWFS was £19800, the garage offered me £20300.
The garage settled VWFS and paid me the balance.
Hey presto, I'm out of a 4 year PCP deal after only 9 months and free to start again.

But in this case have you not "lost" your upfront payment?

If I'm getting this right, you paid an up front sum, then paid £300 per month for nine months, then sold the car and settled the outstanding finance which left you with £500 in your pocket?

But, assuming the fist payment was, say, £4k, that's cost you £6,200 to have a car for 9 months.

little_green

motorguy said:

Arklight said:

If every schmo with the ability to sign their name on the bottom of a finance form for 3 years of  expensive, risky renting just refused to, we would all see new car prices fall like a stone because they would align with what people could afford, not what people could afford every month.

Look at what a new car costs in the US and then look at what the same new car costs in the UK. Rip Off Britain is Rip Off Britain because Brits are gullible consumers who are afraid of haggling and often barely numerate.

It's the same absurdity that drives Britain's nonsensical debt-slavery with house prices. But that's a different (and long gone) board.

You try selling new cars at list price and see if you still think brits are gullible consumers who are afraid of haggling.  British buyers by used cars based in price (and they use the "search by lowest price first" on A/T and elsewhere to get that) and then when they get to the dealers they still expect £,£££s off. 

On new cars they will know precisely what they can get off - discounts are easily checked online.  No one pays list price for a typical car.  No one pays anywhere near it.

I went to lock dealership and tried haggling and was pointblank told they cannot lower the screen price due to laws something to do with FCA they are regulated and have to be "fair" which means their cars need to be priced at a certain amount (a load of codswallop) but even when I hardballed them they still wouldn't budge.

Grumpy_chap

little_green said:

I went to lock dealership and tried haggling and was pointblank told they cannot lower the screen price due to laws something to do with FCA they are regulated and have to be "fair" which means their cars need to be priced at a certain amount (a load of codswallop) but even when I hardballed them they still wouldn't budge.

You are quite correct that the Dealer quoting "laws" and "regulation" as to why they cannot negotiate on price is a load of codswallop (as you put it).

On used cars right now, demand exceeds supply, so negotiation is limited.  Some Dealers still have scope to offer other forms of variance such an enhanced trade in valuation, for example.

PCP on used cars generally does not come with the same type of incentives that are available for PCP on new cars.

For buying a new car, the competitive price can be obtained online. The finance package is often part of the competitive price.
If the local Dealer won't negotiate, then the option is to simply buy through one of the online brokers. 
To buy a car is an odd thing - I have twice purchased brand new, get competitive price online, visit Dealer who fails to negotiate, place order online then the original Dealer calls to say "I would've matched that".  Too late by then.