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Car PCP Agreement - cancellation?

edited 30 November -1 at 12:00AM in Loans
18 replies 2.2K views
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  • DrEskimoDrEskimo Forumite
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    What Dr Eskimo says about things such as paintwork and upholstery protection are worth taking on board and you always need to check dealer paperwork because they often add these things on without telling you and try to distract you with the monthly repayment figures.

    Many's the time I've enquired about buying a car and found the paperwork they prepare includes these things (that I've never asked for) and I have to get them to redo it all. Now when I approach a dealer for figures, I always tell them up front not to add these things and never to try and sell me GAP insurance, or I will simply walk away.

    Absolutely. They have such an incredible mark up on them, it's no wonder they push them so hard.

    The paint protection is typically a £40 sub optimal sealant product, where they spend around 10mins quickly applying it during a £5 standard valet wash. Then charge you £350 for the pleasure....

    On a used car in particular, it's generally so ineffective that you wouldn't even know anything was applied. Complete waste of money.
  • Mutton_GeoffMutton_Geoff Forumite
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    And GAP insurance on a used car is not worth the money. It's barely acceptable on a new car (where it's supposed to cover some of the huge loss on a car the moment you drive it out of the showroom) but on a used car, the depreciation will be linear until it hits a floor level (£1,000 with a years MOT) so I'm not sure what the gap insurance will cover?
    Signature on loan to someone else
  • DrEskimoDrEskimo Forumite
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    And GAP insurance on a used car is not worth the money. It's barely acceptable on a new car (where it's supposed to cover some of the huge loss on a car the moment you drive it out of the showroom) but on a used car, the depreciation will be linear until it hits a floor level (£1,000 with a years MOT) so I'm not sure what the gap insurance will cover?

    I think you are thinking of GAP insurance that specifically covers the shortfall between the insurance pay out and the finance owed against it.

    There are more comprehensive types of GAP, like return to invoice and replacement vehicle. This covers the difference between what the insurance pays out and what you originally paid for the car (or with vehicle replacement, the amount needed to get into a car similar to the day you bought it, which can be needed with new models increasing prices). Whether new or used, these policies can be worth thousands, and cost relatively little (£50 per year in my case).
  • chanz4chanz4 Forumite
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    The wont be any value at the end, it will just be what the car is worth. Get a Tesco loan for the remainder and pay the px valve straight off the car. No savings will get you 10%
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
  • sunnypopstasunnypopsta Forumite
    16 posts
    Thanks everyone for the advice - especially Dr Eskimo. I can't believe I was so taken in by it all when it wasn't for me at all. I went back to the showroom and cancelled the sale and the pcp - needed more time to think about getting a new car after doing it so quickly. After reading the terms I had signed I really thought the car showroom would be funny about it but they were actually very nice. They brought out the sales manager and tried to work around my arguments but I stuck to my guns and they said the money would be back in my account in a few days. Phew! It was a close one and I am so normally not like this at all - Can't believe I did it but thanks again to everyone for the good advice
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  • moleratmolerat Forumite
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    What is worse was how they managed to effectively lend you £4700 at 10.9% over 4 years :eek:
  • Totally - they are so smooth and I normally am so careful about only taking out interest free! Deposit is now back in my account - well it just proves you are never too old to learn!
  • dcweatherdcweather Forumite
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    Yes, a big eek all round. Generally PCP plans are bad for used cars but can be good for a new car if there are incentives like 0% interest rate or a large deposit contribution. The finance company effectively own the car for the duration which can make you a bit nervous about minor damage etc that you might not have bothered with if it was owned by you. But it works well for me because I know what I have committed to. I get a to own a brand new car every three years with only servicing to pay for, without having to pay the full capital each time. I pay a moderate deposit every three years while I save for the new deposit . I am lucky to have paid my mortgage off so it is like a car mortgage to me. Always pay the same amount per month and always have a 1-3 year old car.
    Overall car costs can be very difficult to calculate on an individual basis but I think this probably over a 9 year period would cost about a £1000 a year more than buying a £22k car outright every three years assuming a 5% interest rate. The problem would be I would need £22k capital to start and then approx £11k every three years after as opposed to £4k every three years. The cost per year would be actually be similar but when you stopped with the PCP plan you have nothing but buying outright you would still have a car worth about £11k which is when you would realise your saving.
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