PCP finance.

Ok so after a while of my brother and I trying to figure out the benefits of PCP we can't find any.

He's looking at getting a new Audi and we've been looking into pcp, he changes every 2 years or so and might have 15 k miles maximum on the clock so we thought pcp might suit him better.

You got to come up with a large deposit if you don't have a trade in and while your monthly payments appear low when you add in the fact you need a new deposit for the new pcp after 3 years your 300 a month pcp suddenly turns into 600+ pm.

So what's the benefit over hp or bank loan ?

The only hing with hp or loan is you pay the full interest where as pcp yup don't ?

Either way I see little benefit on a normal loan and trade in and re finance after 3 years or so. Only thing is VW bank has much lower interest than any other bank or finance.

For me doing 20-25 k miles a year pcp would leave me with not much on the gfv.

It seems to me that people could get caught out at the end because you can be damn sure you won't have much over the gfv to use as a deposit.

Bpmull

I personally think Pcp is for people who can't afford a new car. The low monthly repayments and low deposit in some cases suit them down the ground. Anytime you work out the actual costs it seems a lot more expensive unless your paying some rediculous interest rate on the traditional loan like 8-10%. But in the case of vag new cars where you can get a loan for around 2-4% Pcp makes no sense.

The only thing is a lot of people I know who when for a normal 3,4,5 year loan with vw bank weren't approved. As they are more interested in people who want 50% of them money rather than 70-80% of the money. I assume this is to do with the fact that the loan interest is low and they want to insure the value of the car always is more than the value of the loan.

September1

It limits your risk and as in any case where risk is limited there is cost to it.

I used to think that blowing savings on a car was mad, which maybe it is but if you're buying a car I think it's better to use money that you got than to borrow and pay interest however on VW low interest it would probably make more sense to just borrow the money and pay as you drive.

I think I agree with bpmull though that pcp is made to look attractive for people that don't have the money. I'm not sure if garages are making ultra clear that after the 3 years you got to come up with the same deposit again.

I think a lot of the advertised pcp deals deliberately try to make people think that they will have much more than the gfv to use as a deposit but they will need to come up with much more even if you do get more than the gfv.

In other words your cheap 300 a month turns into 500-550 because you got to add up what you'll need to pay to be able to come up with the deposit in 3 years.

Bpmull

As you said mad_lad a major point of Pcp is the fact that after 3 years you have no car and ultimately have to come up with a deposit for a new car or pay a big final payment on the one you have. Dealers are too quick to tell everyone about the benefits but never mention the risks but I suppose thats the same with ally of things. The problem with Pcp is at least if you take out a 3 year loan you pay it back after 3 years and that's it after three years the car is yours so I'd in 3 years time you financially can't afford to change the car maybe you just don't have to money at least you can drive your perfectly good 3 year old car for as long as you want. With Pcp after 3 years you suddenly have no car if you can't afford to stump up the substantial deposit for a new one or pay for the old one.

The only real way you could work it is to save the deposit over the 3 years but a lot people don't have enough discipline to do this. And if you do then realistically what was the benefit to talking out a loan over Pcp. Realistically the only possible use I can see for Pcp is if you can't get approved for a low interest loan like vw or/and you end up paying a high interest rate which may make Pcp cheaper but it mighten even.

As for you being against using savings to buy a car. That really depends if you have a huge amount of savings and buying the car won't cause them to take a huge hit then it makes sense to use savings. But with low interest loans from vw etc it really wouldn't make sense to use your savings as the benefit is too small.But then I would be of the opinion that one should really only take out a 3 year loan on a car. This taking out a 5 year loan on a car is stupid unless you are the type of person who keeps car for 5 plus years which most people don't.

ofcork

Who in their right mind would hand a car back after 3 years after paying a deposit and 36 payments,i assume dealers know most will either go for a new one or pay the balloon.

ofcork

ofcork wrote: »

Who in their right mind would hand a car back after 3 years after paying a deposit and 36 payments,i assume dealers know most will either go for a new one or pay the balloon.

Of course, the idea is to get you hooked. But people a lot of the time wrongly assume you are tied to the one dealer or manufacturer which is not correct.

At the end of the PCP you can go to any dealer you want and buy any car you want.

36 payments of 350 pm = € 12,600. That's a heck of a chunk of doe to walk away from indeed.

Buying a new car every 3 years is a mental amount of money if you add it up.

Take a bog standard Golf that costs 14,141 K new, average boring Irish poverty spec. (tendline)

I see one on carzone trendline 2011 70K miles for 14,995 OUCH !!!

10 K depreciation in 3 years, that's going by 70 K miles, I would have similar mileage after 3 years.

Though the seller would hardly have got the 15K trade in, more like 13,500 ?

650Ginge

[Deleted User] wrote: »

Of course, the idea is to get you hooked. But people a lot of the time wrongly assume you are tied to the one dealer or manufacturer which is not correct.

At the end of the PCP you can go to any dealer you want and buy any car you want.

36 payments of 350 pm = € 12,600. That's a heck of a chunk of doe to walk away from indeed.

Buying a new car every 3 years is a mental amount of money if you add it up.

Take a bog standard Golf that costs 14,141 K new, average boring Irish poverty spec. (tendline)

I see one on carzone trendline 2011 70K miles for 14,995 OUCH !!!

10 K depreciation in 3 years, that's going by 70 K miles, I would have similar mileage after 3 years.

Though the seller would hardly have got the 15K trade in, more like 13,500 ?

Ah give me the figures on the golf again.

650Ginge

650Ginge wrote: »

Ah give me the figures on the golf again.

Why ?

That's what I saw on carzone ?

Bpmull

Deleted User wrote: »

Why ?

That's what I saw on carzone ?

I think he means you can't buy a new golf for 14,141 euro I'm sure you meant 24,141k.

HAHa yeah see my cock up now, yeah I meant 25 k new.

10K depreciation is a lot though that's the reality of high mileage driving in new cars.

mickdw

Deleted User wrote: »

Only thing is VW bank has much lower interest than any other bank or finance.
.

You can also use vw bank for a traditional finance agreement where you pay off the whole car over a number of years. In my opinion, that is just about the best way to buy a new car at the minute as the interest rates are very good.

In relation to the pcp deals, the way I see it, you must look down the road to your next car if considering a pcp. If you can work out roughly how much equity you will have at 3 year stage (value over gfv) and see if you can then afford another new car with that equity amount as a deposit, well then you can afford the car. If on the other hand, you are relying on a large upfront deposit now in order to have a small monthly payment, you cannot really afford the car unless you will have access to similar deposit in 3 years time.
My audi dealer tells me 70% of new audi sales are PCP

mickdw

mickdw wrote: »

You can also use vw bank for a traditional finance agreement where you pay off the whole car over a number of years. In my opinion, that is just about the best way to buy a new car at the minute as the interest rates are very good.

In relation to the pcp deals, the way I see it, you must look down the road to your next car if considering a pcp. If you can work out roughly how much equity you will have a 3 year stage (value over gfv) and see if you can then afford another new car with equity amount as a deposit, well then you can afford the car. If on the other hand, you are relying on a large upfront deposit now in order to have a small monthly payment, you cannot really afford the car unless you will have access to similar deposit in 3 years time.

Yeah I agree the traditional finance is the way to go because even though the monthly payments are a lot higher it's the true amount you'll have to pay over the three years.

PCP also means you got to park in a empty part of the car park half a mile away where as normal finance means if you get a scratch you don't have to worry about it so much.

I would find hoping for a larger value than the gfv far too much of a risk tbh.

mickdw

The car will be worth more than the gfv. Thats a given really unless you go seriously over mileage or make a mess of the car. If someone was the type of driver that tends to knock lumps off their car, well i dont think they should be going with one of these deals or indeed buying a new car full stop.

650Ginge

650Ginge wrote: »

Ah give me the figures on the golf again.

Didn't you mean the golf is 24k not 14, otherwise it would make money being 2/3 years old.

Thats all just pointing out a typo, sorry.

650Ginge

Mad Lad, think we are out of the same mould.

I am glad people want new cars but I can't see me ever having new. The 125mil on the euromillions, I still would think it a waste.

RedorDead

Deleted User wrote: »

I'm not sure if garages are making ultra clear that after the 3 years you got to come up with the same deposit again.

Incorrect. You can just swap your old car for a newer version. You dont need to lay down the same deposit again!

Gumbo

RedorDead wrote: »

Incorrect. You can just swap your old car for a newer version. You dont need to lay down the same deposit again!

Dennis Mahoney also do a key for key swap after 3 years.

marc1

I think some of you are looking ay at this the wrong way. Yes - the dealers are advertising the rates on PCP and are being a little snaky doing this. But I doubt that anyone is not aware of the large final baloon payment.

I think the idea of the PCP is that the interest rate is very low. When the interest rates are the same for the PCP and the HP, it usually makes more sense going with the HP. But I know that in December some many VAG models were sold under PCP with interest rates of 0.9%, some for 1.9%, while a VW Bank HP agreement was charged at 3.9% or even 5.9%. And AIB, BOI, etc. are still talking about 8%+...

Take a 20,000 EUR car. 5k deposit or trade in. 7k baloon payment at the end.

PCP 1.9% over 3 years:
Monthly repayments roughtly 240 EUR. Cost of credit: 635 EUR.

Same car & deposit. 3 year HP at 3.9%. Monlty repayemnts 425 EUR. Total cost of credit: 920 EUR.

Instead of of paying 425 a months, pay 240, put the difference in a savings account and pay the baloon payment in the end. You saved 280 in interest paid to VW bank and got interest paid by your bank.

Same scenario, but take 0.9% and 5.9% and you are taking about 1700 EUR saved on interest paid, plus whatever interst you get from your bank.

As far as I can see the only additional risk is that your bank defaults :-)

Of course this only works if there is a difference between the interest rates... But there is offer out there all the time and the interest rates on PCP deal are usually better.

650Ginge

650Ginge wrote: »

Mad Lad, think we are out of the same mould.

I am glad people want new cars but I can't see me ever having new. The 125mil on the euromillions, I still would think it a waste.

A new car would be nice, though I wonder do people actually think of the interest + depreciation ?

For me a new car at my mileage would cripple me in depreciation.

RedorDead

RedorDead wrote: »

Incorrect. You can just swap your old car for a newer version. You dont need to lay down the same deposit again!

Are you sure about that ? How do you not need a deposit ? The gfv only pays the balance no ?

I must admit that this PCP is driving me mad. I thought I had it figured out, and I'm not even buying a new car !

mickdw

RedorDead wrote: »

Incorrect. You can just swap your old car for a newer version. You dont need to lay down the same deposit again!

You can if:
There is suitable equity in the car after three years above the gfv. This is likely if you signed up to a realistically priced PCP where deposit was correctly balanced against gfv / overall price. This is what I call a sustainable PCP. Many of the deals on offer today are not like this. Audi have deals on A6 with maybe 14k deposit and gfv in the high teens. There will never be 14k equity over the gfv in that car after 3 years so additional deposit will have to be brought to the table by the purchaser or else take the hit in the monthly payment
or
There is a manufacturer promotion where they agree to replace the car with a new one after a certain period (Nissan have been known to do this but usually after 1 year).

Yes you do have to come up with a new deposit after the 3 years ? or the monthly payments would be much higher ?

isn't it risky to assume you'd have more than the gfv after the years ?

mickdw

Deleted User wrote: »

isn't it risky to assume you'd have more than the gfv after the years ?

You will have more than the gfv but how much more is the issue. I think on most of the current headline deals, the figures need to be adjusted to reduce deposit slightly and increase monthly payment. There is a sweet spot but of course that is dictated by the value after year 3.

mickdw

mickdw wrote: »

You will have more than the gfv but how much more is the issue. I think on most of the current headline deals, the figures need to be adjusted to reduce deposit slightly and increase monthly payment. There is a sweet spot but of course that is dictated by the value after year 3.

But it's highly likely you'd have to come up a lot more then a bit extra over the gfv.

The danger as I see it is that the PCP advertisements make it look like that you don't need to come up with a deposit for the new pcp in 3 years.

Do dealers make this clear ?

September1

I think final balloon payment is calculate in such way that there is equity for deposit left. They want you to buy new cars every 3 years is strongest reason, but also it prevents them from loss. Additionally trade-in values would be overinflated as they have margins when selling new cars to accommodate that, again for reason to hook you up.

mickdw

September1 wrote: »

I think final balloon payment is calculate in such way that there is equity for deposit left. They want you to buy new cars every 3 years is strongest reason, but also it prevents them from loss. Additionally trade-in values would be overinflated as they have margins when selling new cars to accommodate that, again for reason to hook you up.

You are correct to a point but I feel alot of the deals are now pushing it too far in order to come up with a very low monthly payment.
The audi a6 deal is advertised as 13k deposit, 17k gfv. So to have a similar deposit at year 3 the car would need to be worth circa 30k. Give that the car is around 45k new, I can't see that happening.

September1

mickdw wrote: »

You are correct to a point but I feel alot of the deals are now pushing it too far in order to come up with a very low monthly payment.
The audi a6 deal is advertised as 13k deposit, 17k gfv. So to have a similar deposit at year 3 the car would need to be worth circa 30k. Give that the car is around 45k new, I can't see that happening.

Car is 45k new and in standard PCP you can do 45kkm or 27k miles - quick look on carzone shows that cheapest A6 from 2011 with that mileage is E28k on carzone and E27k on donedeal and here is suprise, cheapest one on Autotrader is E20k excluding VRT of E6827 (which if you sold car in UK would mean about 6k given to you by revenue) what this means for you future deposit would range from 8 if sold yourself to propably 11k if traded to dealer. That is not so bad outcome and you would need to add between 60 to 140 euro to your repayments to collect missing deposit.

Just to note IMHO if you cannot afford to buy car, do not use loan or PCP - use them if you have better uses for your cash than having it tied to a car.

IMHO most people can't afford to buy new cars, or they buy the most basic poverty spec that can buy, I just couldn't do it. I'd rather a older much higher spec car.

Pcp for me doing the guts of 25,000 miles a year would mean I suffer huge depreciation, as I showed above that a poverty spec golf 1.6 tdi depreciates by 10 k over 3 years, so you got to add that to whatever you pay off the loan including interest.

Having said that any new car no matter how I'd pay for it would cripple me in depreciation.

Buying a nearly 50 k Audi for instance would loose close to 20 k depreciation in the same time and mileage, that's really insanity.

All this before you even pay for a drop of fuel or maintenance, I wonder do people actually sit down and do the sums ?

At least with a leaf I save about 2600 in petrol 290 in motor tax and about 150 a year in service, that's 9,120 I get back that I won't in a normal car.

September1

Deleted User wrote: »

Pcp for me doing the guts of 25,000 miles a year would mean I suffer huge depreciation, as I showed above that a poverty spec golf 1.6 tdi depreciates by 10 k over 3 years, so you got to add that to whatever you pay off the loan including interest.

In PCP deals you actually would do rather smaller mileage.

Deleted User wrote: »

Having said that any new car no matter how I'd pay for it would cripple me in depreciation.

New car value loss is totally separate thing from PCP.

Deleted User wrote: »

Buying a nearly 50 k Audi for instance would loose close to 20 k depreciation in the same time and mileage, that's really insanity.

All this before you even pay for a drop of fuel or maintenance, I wonder do people actually sit down and do the sums ?

Yes, different people value different things. Again, depreciation is separate process from PCP - all new cars suffer it. If people thought like you there would be no new cars sold.

Deleted User wrote: »

At least with a leaf I save about 2600 in petrol 290 in motor tax and about 150 a year in service, that's 9,120 I get back that I won't in a normal car.

Thanks for bringing LEAF, I wanted to ask, how come your brother is look to get Audi and not EV or at least LPG hybrid?

September1

September1 wrote: »

In PCP deals you actually would do rather smaller mileage.

New car value loss is totally separate thing from PCP.


Yes, different people value different things. Again, depreciation is separate process from PCP - all new cars suffer it. If people thought like you there would be no new cars sold.



Thanks for bringing LEAF, I wanted to ask, how come your brother is look to get Audi and not EV or at least LPG hybrid?

Pcp means you pay the depreciation.

As for my brother, he loved the leaf, he really did but nissans are not his thing.

He keeps saying he has nowhere to plug in in the apartment but I'm sure the management company wouldn't object and I'm sure power can easily be got to the car. But he's not interested in finding out.

He's just not interested because he doesn't have to worry about fuel costs.

One thing that annoys me is he keeps buying diesel to drive all of 10.5 miles a day because he won't pay more for motor tax, yep some people are mad !

There are also no qc points in north dublin near him or his work, mad thing is just one qc would do him a week.

He was interested in the I3 but the Rex version until I told him there is Vrt on it and you can't get the grant either because it's got a generator.

Yeah he really needs a range extender for 10 miles a day. Mad.

marc1

Deleted User wrote: »

Pcp means you pay the depreciation.

I really think you need to keep depreciation separate from the financing plan you opt for. I understand (and agree with you) that there is massive depreciation on a new car for the first 3 years. Yet many people buy new cars.

PCP does not affect depreciation. Your car will depreciate no matter what way you pay for it. It doesn't matter if you buy it with cash upfront, you get a loan from your credit usion, or you disn a PCP contract. It will depreciate.

IF (and only in this scenario) you want to buy a new car and keep it for at least 3 years - then PCP is one of many options. I believe that is is a relatively good option because of the low interest rates.

If you are planning to buy a new car and keep it for more then 3 years, PCP is still a good option - you will still make a saving on the interest by saving up the end balloon payment...

marc1

marc1 wrote: »

I really think you need to keep depreciation separate from the financing plan you opt for. I understand (and agree with you) that there is massive depreciation on a new car for the first 3 years. Yet many people buy new cars.

PCP does not affect depreciation. Your car will depreciate no matter what way you pay for it. It doesn't matter if you buy it with cash upfront, you get a loan from your credit usion, or you disn a PCP contract. It will depreciate.

IF (and only in this scenario) you want to buy a new car and keep it for at least 3 years - then PCP is one of many options. I believe that is is a relatively good option because of the low interest rates.

If you are planning to buy a new car and keep it for more then 3 years, PCP is still a good option - you will still make a saving on the interest by saving up the end balloon payment...

Yes on the interest the savings can be good, afaik you pay interest only on the money borrowed and not on the full amount as in a normal finance ?

So what you're really paying for in a pcp is the depreciation + interest.

I still don't see much over the gfv in a car ?

TBH I'd hate having to park a mile from another car also and being worried about every scratch, especially over 25K miles a year.

bs2014

I thin PCP has its upsides and downsides, one thing I wonder and maybe someone could enlighten me.

Say I buy an e.g a golf on PCP, pay my deposit of for arguments sake €4000 and all the monthly payments. Then at the end of the say 2 years I decide I want a new golf. Does one have to pay the deposit again or just pay the monthly payments on the new vehicle.

The downside I can see, is one becomes locked into a certain make of car as if they decide to change vehicle, they won't get the initial say €4000 they put on the table originally.

Any experts on this?

marc1

I think PCP contracts are only available over 3 years.

It is very likely that you will not have to pay another deposit - but but you can if you want to reduce your monthly payments.

Keep in mind that there are 4 values that are important, of which you can influence 2:
Deposit - minimum 10%, maximum 30%. You decide. Higer deposit means lower monthly repayments.
Guaranteed future value (GVF)- Your final payment. This is fixed by VW bank for each model. Usually between 35% - 40%.
Interest rate - fixed by VW Bank.
Monthly repayments: (Value of car + interest - Deposit - GFV)/36

A 25k Golf TDI has a GFV of 8400 EUR.
A 3 year old Golf TDI would be worth about 13,000 EUR in 3 year? So you have "equity" in the car of 4,600 which would be used as your next deposit. Keep in mind that VW also decides what your car is actually worth after the 3 years and the 13k was just a guess...
You are not locked in to that garage or manufacturer. You do have the option to sell it privately or even to another garage and pay off the 8400 EUR you still owe VW bank.

If you decided to get a new Golf and you did NOT want to add any of your own cash, just the 4,600, the repayments for a new PCP would be 361.20 a month for the same 25k golf.

(http://www.volkswagen.ie/en/sales/finance/pcp-finance-calculator.html)

Hope that makes sense!

Thanks marc1 that's about the best explanation of pcp I've heard yet!

So you actually don't need a deposit for a new car at the end of the pcp. This I didn't know, but obviously your next monthly payments would be higher.

For me doing high mileage would it actually make sense considering my pm payments will be probably a lot higher considering I'd have more depreciation, a lot more ?

marc1

Mad_Lad - The fact that you don't need an additional deposit for a new car after 3 years with that particular example is related to the high residual value of the Golf TDI and the strangely low GFV that VW put on this car.

For some cars the GFV is higher and the value you get for the car after 3 years lower... which means that you might have to put in a little extra to get back the minimum 10% deposit required. Again with the example above you are nearly at 20% deposit, which is pretty good!!

With PCP the garage give you 3 options after the 3 years:
1) Hand back the keys - This is NOT a good option for you as you do high mileage. I think they charge you extra for every km done over 15k km or 20k km a year... Can't find the exact details on the Irish site. In the UK it is 6p per mile. You also loose any "equity". So in general this is a bad option.
2) Pay the GFV and the car is yours. This is a good option if you have saved for this payment during the 3 years.
3) Get a new car under PCP - Going back to the example above: If you do high mileage the car will obviously be worth less. So you might not get 13k back for your car, but maybe you only get 11.5k. That would leave you with "equity" of about 3000 EUR. Still enough (12%) not to put in any additional cash upfront, but your monthly payments would go up to 405 EUR a month. Of course you could decide to put in some cash to get those payments down...

What you are doing is betting on the future REAL value of the car and that being higher the the future GUARANTEED value. :-) The more miles you do the lower the difference between the two is.

@60

So do you think PCP would suit me, I'd still benefit from reduced interest ?

I worked out that if driving a leccy over the Prius over 20K a year I'd save 9800 over the 3 years over fuel, maintenance and motor tax. I pay only 350 insurance so I doubt that would go down.

So Another way of looking at it is, if I drive a Leaf (or VW Golf EV due in the spring) then I have a 270 PM saving over the Prius @60 mpg, it will cost me just about 270 pm in fuel alone. (and all this is in a 60 mpg car !!! )

So putting 200 PM is 50 a week and not a lot really to pay for a brand new car, even if it is an ev.

Only problem is the E-Golf is likely to cost north of 30,000 Euro's about 3k more than the highest spec leaf,

But 50 a week is not a lot when you add it up, and going on PCP means that I can hop into a new EV as technology improves again within the 3 years or a new model comes out effecting depreciation even more.

Now the problem is I'm caught in the trap of being in contracts, 3 months here 6 there etc such is life in I.T atm. So no finance is going to touch me, even if I have a permanent job in x amount of time I'd probably have to be in that job x amount of time ?

DO my sums add up or am I missing something ?

TBi

I'm not sure a leaf would be a great idea, if you get a call out when it isn't fully charged what do you do? What if some annoying kid had unplugged you during the night?

You'd be better off keeping your own car until the range is extended further on the leaf. Also save money every month until then to have a nice big deposit and even lower repayments

EDIT: I know this isn't a Leaf discussion so I'll assume you've already taken the above into consideration and leave further discussion on leaf out of the thread

marc1

Sorry, can't help with the comparison to the EV cars - I know very little about them... Price, range, battery life & replacement costs (I think some brands make you rent a battery and replace it every few years?), actual service costs, reliability, depreciation, resale value, changes in tax policies, price to charge the car, etc... I would just be speculating... :-)

If your brother is happy to change his car ever 3 years instead of every 2 years, then PCP is definitely a good (if not the best) option, as long as the PCP interest rates are considerably lower then the HP rates. i.e. 1.9% PCP vs 5.9% HP. When you get a quote of them, the A4 print-out you get should have a "cost of credit" line on it, so you can compare.

Keep in mind that this looks like only 4% difference. In effect your interest rates are nearly 70% lower! As interest is compounded (you pay interest on your interest) the savings in interest payment are more then 70%, which could easily be well over 1000 EUR over 3 years.

About 3 months before the end of the contract start asking around and see what garage gives you the best value for the car you want to trade in.

For you doing 20k-25k miles a year on a PCP - be sure you read the fine print on the excess mileage costs... But again they will of course not apply if you decide to buy out on the contract with the balloon payment in the end.

I also just had a look at the Audi website. Looks like the best rate Audi is offering on PCP is 4.9%. Not great and barely better then standard HP. VW was running a campaign before Christmas where the rate on the Golf was 1.9% and on a new Passat Ed. R it was 0.9%!

TBi

TBi wrote: »

I'm not sure a leaf would be a great idea, if you get a call out when it isn't fully charged what do you do? What if some annoying kid had unplugged you during the night?

You'd be better off keeping your own car until the range is extended further on the leaf. Also save money every month until then to have a nice big deposit and even lower repayments

EDIT: I know this isn't a Leaf discussion so I'll assume you've already taken the above into consideration and leave further discussion on leaf out of the thread

Indeed I've though about all the above,

The range isn't a problem for me to do 25,000 + miles a year, however I haven't a hope in hell getting any form of loan finance while on contract.

But you're right about call out, this is something I'll know more about after a few weeks. I doubt I'll be sent too far from location.

I already have the deposit sitting in the bank gaining interest !

I just would never commit to a 3 year finance without proper guarantees, even if they gave me the money.

Not trying to turn this into a leccy discussion what so ever. But it just so happens that even though I'm not saving on buying the leccy (at my mileage)it means I save much more than the average driver on fuel even at 60 mpg, maintenance etc which I can dump off the loan instead.

All this means I can have a new leccy for 200 pm compared to paying a normal car and fuel, maintenance etc that adds to over 700+ pm when you add it all up. (based on my mileage)

By going the PCP route means that I'm protected from battery degradation for which ( only to me) would matter after 100,000 miles, (or 5 years) and it would allow me to hop into the MK II Leaf with more range for the same money.

Of course keeping the Prius means I actually save 200 PM to add to the Deposit for when the time comes, for the moment I'm thinking out loud and making sure I've all the facts on pcp.

marc1

marc1 wrote: »

Sorry, can't help with the comparison to the EV cars - I know very little about them... Price, range, battery life & replacement costs (I think some brands make you rent a battery and replace it every few years?), actual service costs, reliability, depreciation, resale value, changes in tax policies, price to charge the car, etc... I would just be speculating... :-)

You can't rent the battery in the leaf in Ireland, it isn't necessary for new purchases and recent reports suggest it will have 80% capacity left after 100,000 miles.

The Renault zoe is still not available in Ireland for unknown reasons. Probably due to the fact you got to rent the battery. And Irish people are obseed with owning everything.

Replacement is not allowed, instead Nissan "repair" the battery if it falls below 70% back to 70% or just above. 70% being determined by the industry to be end of life. In 5 years time you may very well have a replacement option, but the car will be so cheap in 8 years that even if it had 50 mile range it would be an insanly cheap car to own. most will be 2nd run a bouts. And so the battery will live on.

Aout 50 Euro's is worth about 2,000 miles in an e.v. at night rate electric, excluding the (for now) free electricity. 100 a year or less for a "inspection not service" as there is no engine to maintain,

Roughly 2.70 per 100 miles, or about 540 per 20,000 miles. based on an EPA calculated average of 30 Kwh/100 miles.and 9c/Kwh night rate (excluding free public charging)

marc1 wrote: »

If your brother is happy to change his car ever 3 years instead of every 2 years, then PCP is definitely a good (if not the best) option, as long as the PCP interest rates are considerably lower then the HP rates. i.e. 1.9% PCP vs 5.9% HP. When you get a quote of them, the A4 print-out you get should have a "cost of credit" line on it, so you can compare.

Yep he's difinitely thinking about it.

marc1 wrote: »

For you doing 20k-25k miles a year on a PCP - be sure you read the fine print on the excess mileage costs... But again they will of course not apply if you decide to buy out on the contract with the balloon payment in the end.

So basically the pcp would allow for say 15,000 kms a year and I'd be charged excess mileage from the very start of the contract ? or would they just give me a lower gfv at the start of the contract ?

So if the interest was low enough would I just be better to pay off a loan on HP ?

BMJD

What is the charge for going over 15,000 km per year?

marc1

Deleted User wrote: »

So basically the pcp would allow for say 15,000 kms a year and I'd be charged excess mileage from the very start of the contract ? or would they just give me a lower gfv at the start of the contract ?

So if the interest was low enough would I just be better to pay off a loan on HP ?

I think you can not choose how many km you want to drive a year in Ireland. My girlfriend bought an Up! recently on PCP and just checked. The limit was 20,000 km a year. Possible that limited is higher for diesel then for petrol car?

The excess mileage fees only applies after the 3 years if you are handing back the car and do not get a new one, which is by far the worst option of the three. Financially you would be better off selling it privately and paying of the ballon payment.

And if you pay of the balloon payment, they don't care anyway as they got their money and the car is yours. Doesn't matter for them if is has 10k miles or 100k miles on the clock.

If you want to get a new car in 3 years time, your car will be valued to determine how much "equity" above the GFV is left. Of course a car with 20k miles will be worth more then a car with 75k miles. So no need to apply a excess milage charges.

In terms of where you would be better off - depends on the interest rate. Dealers and VW bank will make the PCP more attractive because they want to see you again in 3 years!

BMJD wrote: »

What is the charge for going over 15,000 km per year?

Sorry it is 20k km a year in Ireland (at least for the VW Up!). Don't know what the charge is, but as explained above, this will just apply if you hand back the car at the end of the contract. They charge 6p / mile in the UK. So 300 GBP per 5,000 miles. Roughly equivalent would be 4c/km or 200 EUR for 5,000km. Might be more expensive in Ireland though... don't know!

marc1

marc1 wrote: »

In terms of where you would be better off - depends on the interest rate. Dealers and VW bank will make the PCP more attractive because they want to see you again in 3 years!

Sorry it is 20k km a year in Ireland (at least for the VW Up!). Don't know what the charge is, but as explained above, this will just apply if you hand back the car at the end of the contract. They charge 6p / mile in the UK. So 300 GBP per 5,000 miles. Roughly equivalent would be 4c/km or 200 EUR for 5,000km. Might be more expensive in Ireland though... don't know!

In other words, you can be damn sure the dealers/finance company win all the time no matter what !

Seems a lot more complicated now, I thought you go in give the yearly mileage and the gfv would be calculated accordingly.

I would guesstimate that a 3 year old leaf with 75K miles 25 K new would be worth in or around 8-11K ?

I see a 3 year old Nissan Note on Carzone for almost 12K with 50 K miles so will possibly get 9-10 K as a trade in.

I suppose the point I'm making is that with HP you'll pay more but in the end you'll have a trade in and won't have to come up with a big deposit as likely you would with a high mileage pcp and you won't be as worried about a dent or scratch, after all, anything can happen in 70,000 miles.

marc1

When you say they always win, yes they have to make a profit, otherwise why would they bother building cars. :-)

You will also have a trade-in at the end of the PCP - just you don't own it fully :-)

To counteract and for peace of mind do the following:

Get the dealer to give you a HP and a PCP quote with the same initial deposit over the same time period.
Check that the total cost of credit is lower on the PCP then the HP. This should definitely be the case, but make sure!
When you are budgeting for the car ownership, just assume that you have to make the same monthly repayments that you would on HP.
Open a new saving account.
Sign up for PCP - pay VW bank the monthly PCP rates and put the difference between the HP and the PCP in the savings account.

After 3 years pay the balloon payment with the savings and keep the car. You don't even have to talk to anyone. The last direct debit will be for the balloon payment amount. Noone will care about what happened to the car in the last 3 years. On a monthly basis you essentially paid the HP rate - and you will also have a nice little sum left in the savings account!

marc1

marc1 wrote: »

When you say they always win, yes they have to make a profit, otherwise why would they bother building cars. :-)

You will also have a trade-in at the end of the PCP - just you don't own it fully :-)

To counteract and for peace of mind do the following:

Get the dealer to give you a HP and a PCP quote with the same initial deposit over the same time period.
Check that the total cost of credit is lower on the PCP then the HP. This should definitely be the case, but make sure!
When you are budgeting for the car ownership, just assume that you have to make the same monthly repayments that you would on HP.
Open a new saving account.
Sign up for PCP - pay VW bank the monthly PCP rates and put the difference between the HP and the PCP in the savings account.

After 3 years pay the balloon payment with the savings and keep the car. You don't even have to talk to anyone. The last direct debit will be for the balloon payment amount. Noone will care about what happened to the car in the last 3 years. On a monthly basis you essentially paid the HP rate - and you will also have a nice little sum left in the savings account!

Sounds good, only would I loose a lot more paying the excess ?

Gumbo

Mad Lad, what's the cheapest way to get into an EV at the moment?

kceire

kceire wrote: »

Mad Lad, what's the cheapest way to get into an EV at the moment?

Probably one from the U.K, 12,000 - travel, and evse (charger) install. And a lot of planning to get home.

If you're planning on going that route go to the Irish ev owners page on facebook, someone will sort you out with the tags for the chargers and maybe can advise you on the best route home.

But 12-12,500 Euro's should get you a Leaf with 3,000-45,000 miles.

You get the portable 10 amp charger that can plug into a normal 3 pin plug but not the type II cable to plug into the public (non fast chargers) but again you can ask over on the facebook page about where to get the type II cable.

Gumbo

Deleted User wrote: »

Probably one from the U.K, 12,000 - travel, and evse (charger) install. And a lot of planning to get home.

If you're planning on going that route go to the Irish ev owners page on facebook, someone will sort you out with the tags for the chargers and maybe can advise you on the best route home.

But 12-12,500 Euro's should get you a Leaf with 3,000-45,000 miles.

You get the portable 10 amp charger that can plug into a normal 3 pin plug but not the type II cable to plug into the public (non fast chargers) but again you can ask over on the facebook page about where to get the type II cable.

Would that be buying from an EV forum or from the general car sites?
Any other option other than the leaf?

kceire

kceire wrote: »

Would that be buying from an EV forum or from the general car sites?
Any other option other than the leaf?

No not forum, check out autotrader U.K and put in postcode BS32 4NF and select distance, nationwide.

I'm not sure I'd be the best to advise you on buying a car in the U.K as I've no experience but if you start a new thread I'm sure you'll get plenty of advice.

The Leaf is currently the "only" half affordable EV you can buy either new or 2nd hand.

The Renault Zoe is not available in Ireland yet for unknown reasons.