PCP finance.

sheff the ref

You would really need to be doing very low mileage for PCP to work.

If say a car cost €20,000 and you put down a deposit of €5000 and paid off €10,000 over the three years on PCP payments and you had a leftover lump sum of €5000 to pay, you need the GMFV of the car to be €10,000 to cover the €5000 owed and to provide €5000 extra for a new deposit.

Only with very low mileage would you achieve this.

I do 40,000+ km a year. There isn't a hope I would be able to make a PCP deal work on any size of a car.

sheff the ref

You would really need to be doing very low mileage for PCP to work.

If say a car cost €20,000 and you put down a deposit of €5000 and paid off €10,000 over the three years on PCP payments and you had a leftover lump sum of €5000 to pay, you need the GMFV of the car to be €10,000 to cover the €5000 owed and to provide €5000 extra for a new deposit.

Only with very low mileage would you achieve this.

I do 40,000+ km a year. There isn't a hope I would be able to make a PCP deal work on any size of a car.

mickdw

flamegrill wrote: »

Example above. Based on Skoda pcp.

But your example doesnt detail the finance percentage. Of course the figures add up All you are doing is adding in a known interest cost. What you need to ask yourself is what is the finance percentage as detailed, then do the calcs including the gfv and excluding the gfv and you will see that you are in fact paying interest on all the borrowed money. To clarify, you are borrowing the price of the car less any deposit paid.

Take a bmw example:
car 41410
deposit 12419
gfv 18981
36 payments of 355 + 75 euro (3.9 percent)
interest 2844

Now with my basic excel sheet calculating interest once monthly on the reducing balance, charging 3.9 annually on the total cost less deposit, I end up with 18973 still owing at end of month 36 - very close to the balloon in this case

EDit

Not sure if all are the same but mine is as follows

Value of car - deposit = finance amount #1

Finance amount #1 + 3 yrs interest on finance amount #1 = finance amount #2

Finance amount #2 - gmfv = finance amount #3

Finance amount #3 / 37 = monthly repayments

...ie, interest is paid on value of car minus deposit, but including gmfv

mickdw

zizou_ wrote: »

That's the only way that makes sense tbh. The industry definition for 'finance amount' is Total Car Value - Deposit which just confuses things.

E.g. Kia http://www.kiacredit.ie/

Even taking that kia deal there, the interest is charged on the entire cost less deposit. It ieven says it straight up on the page. Where finance amount is mentioned, the figure calculated is simply car price less deposit.
I ran rough figures again on that and the 5.9 percent works out on my calculator to a few euro baed on paying interest on the whole amount less deposit.
If I run the calcs but without charging interest on the balloon, you would be over paying by 768 euro over the term based on the monthly quoted.

Kaiser84

The deal I got today for the car and spec from Skoda (Octavia Ambition) was:

Car Cost €26,500

0% finance

Deposit: €7,750

Gfv: €10,064

Monthly payment for 3 years: €254.15 (includes paying for 3 years servicing)


So, am I right in saying that anything the car is valued at by the dealer over €10,094 after 3 years can be used towards a deposit to change or I pay the €10,094 to own the car?


I asked about mileage and they said it doesn't matter so long as it's not sky high. If I bring it back after 3 years with 100k kms on the clock I'd still have about €7,000 equity.


I didn't sign for it yet, but probably will on Monday or Tuesday. Can I get the milage I'm allowed do in writing?

jca

Kaiser84 wrote: »

The deal I got today for the car and spec from Skoda (Octavia Ambition) was:

Car Cost €26,500

0% finance

Deposit: €7,750

Gfv: €10,064

Monthly payment for 3 years: €254.15 (includes paying for 3 years servicing)


So, am I right in saying that anything the car is valued at by the dealer over €10,094 after 3 years can be used towards a deposit to change or I pay the €10,094 to own the car?


I asked about mileage and they said it doesn't matter so long as it's not sky high. If I bring it back after 3 years with 100k kms on the clock I'd still have about €7,000 equity.


I didn't sign for it yet, but probably will on Monday or Tuesday. Can I get the milage I'm allowed do in writing?

I thought it said 20k per year on the Skoda site. Are you being a bit optimistic thinking the middle model 105 bhp octavia with 100,000 km on the clock is going to be worth €17000? I could see them doing a face lift soon as it is a bit of an ugly duckling especially around the back and the present version is 3 years old. It's a bit like roulette this pcp lark any kind of a small tip in the car park will have you on your knees like the clown on the AXA ad. Maybe I'm over thinking it but it all sounds a bit like having one of those driver app thingys in the car. I could see me and some slime ball car salesman having a heated discussion when D-day comes.

jca

sunnysoutheast wrote: »

No.

The "GMFV" or balloon payment is an interest-only loan with no capital repayment element, which is the reason the monthly payments are lower.

For this reason a PCP will actually work out more expensive over a given term than a straightforward loan, but with a lower monthly payment amount.

Of course the balloon payment is the kicker which effectively means most people roll over into a new PCP.

So, if you refinance the GMFV when the three years are up to keep the car, effectively you're paying interest on the GMFV twice, is that correct? If so, the more I read into this pcp, the less I like it tis all a bit "smoke and daggers" to quote Bertie.

vintagevrs

Well the answer is in your question. If you refinance something, you are going to pay interest on it twice at the agreed rate.

Marcusm

jca wrote: »

So, if you refinance the GMFV when the three years are up to keep the car, effectively you're paying interest on the GMFV twice, is that correct? If so, the more I read into this pcp, the less I like it tis all a bit "smoke and daggers" to quote Bertie.

For the initial PCP contract, you have financed/borrowed the difference between the car cost and your deposit. If at the end of the 3 year PCP you borrow further money to refinance the balloon payment, of course you will pay further interest as you have extended the terms of the borrowing although at that stage, the borrowed money will only be the GFMV.

On PCP you're paying interest + depreciation so if the car is worth 28K you're paying back per month based on 28K + the interest however the difference is that you are leasing the car over 3 years so you pay the calculated devaluation on the car + the interest based on the mileage limit you gave meaning much lower repayments compared to HP or bank loan.

Excess mileage is only relevant handing the car back and walking away, you are not charged 10 C/Km etc when getting a new lease. However if you pay based on 10,000 Kms and drive 30,000 a year then the GFMV will be far higher than if you're paying based on the usually max 25,000 Kms per year.

So you say why don't I go with the lower mileage and pay lower per month ?

Here's why you may not want to do this.

If you have driven 90,000 Kms and the car is supposed to have 30,000 at the end then the GFMV will be much higher based on the lower mileage plan you went on in the beginning.

So you want a new PCP ? then the car is worth less than the GFMV meaning you will have to pay a larger deposit for the next contract, so in this example you are going to pay a good proportion of the excess mileage in more devaluation rather than mileage penalty.

IF you have a PCP for 25,000 a year and supposed to have 75,000 at the end and have 90,000 then this won't really be an issue because at this stage the depreciation will be far less from 75,000 - 90-000 than from 30,000 - 90,000 kms.

EDit

jca wrote: »

So, if you refinance the GMFV when the three years are up to keep the car, effectively you're paying interest on the GMFV twice, is that correct? If so, the more I read into this pcp, the less I like it tis all a bit "smoke and daggers" to quote Bertie.

Tbh, it is only "smoke and daggers" if you don't research it properly and weigh it up against your personal financial/lifestyle circumstances and the other options available to you...and (god I sound like my dad) this should be the norm for any significant financial decision

Originally posted by Kaiser84
The deal I got today for the car and spec from Skoda (Octavia Ambition) was:

Car Cost €26,500

0% finance

Deposit: €7,750

Gfv: €10,064

Monthly payment for 3 years: €254.15 (includes paying for 3 years servicing)


So, am I right in saying that anything the car is valued at by the dealer over €10,094 after 3 years can be used towards a deposit to change or I pay the €10,094 to own the car?


I asked about mileage and they said it doesn't matter so long as it's not sky high. If I bring it back after 3 years with 100k kms on the clock I'd still have about €7,000 equity.


I didn't sign for it yet, but probably will on Monday or Tuesday. Can I get the milage I'm allowed do in writing?

Get more info about the gmfv from the dealer and research resale value of 3 yr old Skodas and impact of mileage on that (and as jca said, you have to consider if they will make a significant style change within those 3 yrs as that will impact resale value). Then weigh that up against your anticipated mileage over the 3 yrs and the fact that, in essence, to carry on with the PCP you need this car to be worth €17814 when you go back in 3 yrs time.

Also, I'd have serious reservations about a dealer saying that mileage doesn't matter "as long as it is not sky high" as it implies that they don't understand their own product (for my PCP at least, the agreed annual mileage had a massive impact on the gmfv)....finally, yes, you need mileage agreement in writing.

zizou_

mickdw wrote: »

But your example doesnt detail the finance percentage. Of course the figures add up All you are doing is adding in a known interest cost. What you need to ask yourself is what is the finance percentage as detailed, then do the calcs including the gfv and excluding the gfv and you will see that you are in fact paying interest on all the borrowed money. To clarify, you are borrowing the price of the car less any deposit paid.

Take a bmw example:
car 41410
deposit 12419
gfv 18981
36 payments of 355 + 75 euro (3.9 percent)
interest 2844

Now with my basic excel sheet calculating interest once monthly on the reducing balance, charging 3.9 annually on the total cost less deposit, I end up with 18973 still owing at end of month 36 - very close to the balloon in this case

Thanks for clearing that up. The info available on PCP is pretty poor and I have never seen any mention of interest only applied to the GMFV.

MarkN

mickdw wrote: »

But your example doesnt detail the finance percentage. Of course the figures add up All you are doing is adding in a known interest cost. What you need to ask yourself is what is the finance percentage as detailed, then do the calcs including the gfv and excluding the gfv and you will see that you are in fact paying interest on all the borrowed money. To clarify, you are borrowing the price of the car less any deposit paid.

Take a bmw example:
car 41410
deposit 12419
gfv 18981
36 payments of 355 + 75 euro (3.9 percent)
interest 2844

Now with my basic excel sheet calculating interest once monthly on the reducing balance, charging 3.9 annually on the total cost less deposit, I end up with 18973 still owing at end of month 36 - very close to the balloon in this case

You're on the money there. BMW do not seem to do deals where there's a chunk of leftover money at the end. Most recent PCP quote I got from them needed another €3,000 injection after year 3 to keep repayments the same.

EDit

MarkN wrote: »

You're on the money there. BMW do not seem to do deals where there's a chunk of leftover money at the end. Most recent PCP quote I got from them needed another €3,000 injection after year 3 to keep repayments the same.

Sorry, you've lost me there...which car companies are doing PCP deals where there is a chunk of leftover money at the end? Surely, the only way that would come about was if they are seriously (and purposely) underestimating the gmfv?

Drummerboy08

EDit wrote: »

Sorry, you've lost me there...which car companies are doing PCP deals where there is a chunk of leftover money at the end? Surely, the only way that would come about was if they are seriously (and purposely) underestimating the gmfv?

What difference does it make if they purposely underestimate it?

It's exactly what's it's called - a MINIMUM future value, which means is actually better for the customer because there will be more equity in the car.

It's worse to overestimate it (usually done to compete with a lower competitor Apr) which means there's a smaller amount of equity in it after 3 years.

mickdw

MarkN wrote: »

You're on the money there. BMW do not seem to do deals where there's a chunk of leftover money at the end. Most recent PCP quote I got from them needed another €3,000 injection after year 3 to keep repayments the same.

That is not too bad to be honest.

MarkN

EDit wrote: »

Sorry, you've lost me there...which car companies are doing PCP deals where there is a chunk of leftover money at the end? Surely, the only way that would come about was if they are seriously (and purposely) underestimating the gmfv?

Eh, many of them. The whole point of trying to get you into another deal is "oh look, you can get a new car without any deposit as the GFV is lower than what your well kept 3 year old car is worth today so your new deposit is actually in your car". I know someone with a Passat and their 2nd PCP deal has a lower repayment without a cash deposit.

BMW PCP on the other hand seems to be about a 10-15% deposit and not much more, resulting in higher repayments. Quote I got on a €60,000 5 series was €9,000 deposit, €720 per month and another €3,000 cash in 3 years to keep going.

The GFV is usually worst case scenario.

mickdw

MarkN wrote: »

BMW PCP on the other hand seems to be about a 10-15% deposit and not much more, resulting in higher repayments. Quote I got on a €60,000 5 series was €9,000 deposit, €720 per month and another €3,000 cash in 3 years to keep going.

Not very nice figures. They are saying that there would be roughly 6k equity after 3 years. Nobody can be sure of that figure either. Imagine if you put in 30 percent deposit year 1. You would have to come up with 12k to get the same low monthly on the next car.

EDit

Sorry, woolly headed this morning and autocorrect on my tablet is driving me insane, so my post was poorly worded....anyway, my confusion was based on the fact that we have a PCP with BMW and it was set up on premise of "oh look, you can get a new car without any deposit as the GFV is lower than what your well kept 3 year old car is worth today so your new deposit is actually in your car"...and based on our research it will be. Anyway, ours is a very different situation as your example has a 15% deposit, whereas we paid <5%

MarkN

EDit wrote: »

Sorry, woolly headed this morning and autocorrect on my tablet is driving me insane, so my post was poorly worded....anyway, my confusion was based on the fact that we have a PCP with BMW and it was set up on premise of "oh look, you can get a new car without any deposit as the GFV is lower than what your well kept 3 year old car is worth today so your new deposit is actually in your car"...and based on our research it will be. Anyway, ours is a very different situation as your example has a 15% deposit, whereas we paid <5%

I'm not saying BMW will typically give you that cushion though, they seem to base their GVF on a figure that the car will more than likely be worth at year 3.

The lower your initial deposit, the less likely you'll be to get stung for any nasty surprises as you're going to be paying a higher repayment.

Some people dropped €20,000 on a deposit and got stung then in needing a massive deposit again to keep those lovely low repayments.

vintagevrs

The terminology in pcp is what I think confuses some people. Guaranteed future value for instance. This only really applies when walking away and km allowances etc come into it. Otherwise it's the final payment/balloon payment and km allowances make no difference.

The idea of equity etc is no different than to traditional finance. X amount still owed on car. Car is worth y. Therefore there is equity there. That's not a new concept or unique to pcp.

vintagevrs

The terminology in pcp is what I think confuses some people. Guaranteed future value for instance. This only really applies when walking away and km allowances etc come into it. Otherwise it's the final payment/balloon payment and km allowances make no difference.

The idea of equity etc is no different than to traditional finance. X amount still owed on car. Car is worth y. Therefore there is equity there. That's not a new concept or unique to pcp.

sheff the ref

I would be interested to hear at this stage from people coming to the end of their first 3 year PCP deal and how they are getting on in terms of getting a new car and what pitfalls they have encountered.

Kaiser84

EDit wrote: »

Tbh, it is only "smoke and daggers" if you don't research it properly and weigh it up against your personal financial/lifestyle circumstances and the other options available to you...and (god I sound like my dad) this should be the norm for any significant financial decision

Originally posted by Kaiser84
The deal I got today for the car and spec from Skoda (Octavia Ambition) was:

Car Cost €26,500

0% finance

Deposit: €7,750

Gfv: €10,064

Monthly payment for 3 years: €254.15 (includes paying for 3 years servicing)


So, am I right in saying that anything the car is valued at by the dealer over €10,094 after 3 years can be used towards a deposit to change or I pay the €10,094 to own the car?


I asked about mileage and they said it doesn't matter so long as it's not sky high. If I bring it back after 3 years with 100k kms on the clock I'd still have about €7,000 equity.


I didn't sign for it yet, but probably will on Monday or Tuesday. Can I get the milage I'm allowed do in writing?

Get more info about the gmfv from the dealer and research resale value of 3 yr old Skodas and impact of mileage on that (and as jca said, you have to consider if they will make a significant style change within those 3 yrs as that will impact resale value). Then weigh that up against your anticipated mileage over the 3 yrs and the fact that, in essence, to carry on with the PCP you need this car to be worth €17814 when you go back in 3 yrs time.

Also, I'd have serious reservations about a dealer saying that mileage doesn't matter "as long as it is not sky high" as it implies that they don't understand their own product (for my PCP at least, the agreed annual mileage had a massive impact on the gmfv)....finally, yes, you need mileage agreement in writing.

Thanks for the reply. I think I'll do between 60-70k kms over the 3 years.

I've researched similar spec 3 year old Skodas and they're currently averaging about €16,000 to €19,500 asking price. I could be upgrading some spec on the car I'm getting (1.6 tdi 110bhp) when I call back to the showroom on Monday too. Hopefully that will help with the valuation in 3 years time.

My initial plan was to go for a 2013-2015 car, but this 0% finance swung me and my plan is to pay the €10,094 in 3 years time and own the car.

Hopefully, all going according to plan I'll have the balloon payment saved up in 3 years and have options.

Kaiser84

jca wrote: »

I thought it said 20k per year on the Skoda site. Are you being a bit optimistic thinking the middle model 105 bhp octavia with 100,000 km on the clock is going to be worth €17000? I could see them doing a face lift soon as it is a bit of an ugly duckling especially around the back and the present version is 3 years old. It's a bit like roulette this pcp lark any kind of a small tip in the car park will have you on your knees like the clown on the AXA ad. Maybe I'm over thinking it but it all sounds a bit like having one of those driver app thingys in the car. I could see me and some slime ball car salesman having a heated discussion when D-day comes.

Thanks for the response.

I don't think I'll do 100,000kms over the 3 years. I'd say 70,000 or under.

I'll definitely get it clearly in writing in my contract about the allowed milage.

I could be adding a few bits of spec into the car on Monday, so I hope this will contribute to a decent valuation in 3 years if I decide to keep going with pcp.

Kaiser84

jca wrote: »

I thought it said 20k per year on the Skoda site.

Can you link me to this on the Skoda site please? I can't find it on the site any where.

Thanks.

Lantus

Kaiser84 wrote: »

Thanks for the response.

I don't think I'll do 100,000kms over the 3 years. I'd say 70,000 or under.

I'll definitely get it clearly in writing in my contract about the allowed milage.

I could be adding a few bits of spec into the car on Monday, so I hope this will contribute to a decent valuation in 3 years if I decide to keep going with pcp.

Myself and a few others have been told that the 20 k mileage limit doesn't really apply to normal customers. Its a safety measure in the contract to prevent fleet owners buying cheap cars, racking up huge mileage and then handing the keys back. Talk to your dealer but Mrs lantus will have 80-90k on her car when it goes in next year. I've been told that this is 'average' for a diesel. Nothing to worry about.

Kaiser84

Lantus wrote: »

Myself and a few others have been told that the 20 k mileage limit doesn't really apply to normal customers. Its a safety measure in the contract to prevent fleet owners buying cheap cars, racking up huge mileage and then handing the keys back. Talk to your dealer but Mrs lantus will have 80-90k on her car when it goes in next year. I've been told that this is 'average' for a diesel. Nothing to worry about.

That's word for word what I was told too, so that's good to hear.

My boss put 115,000 kms on a 142 Ford connect he got on pcp. He changed for a 161 in January and it didn't affect the valuation.

As you said and we've been told it's surely just a measure from the dealers to protect themselves from fleet owners.

I can't see dealerships moving the goalposts so much that they'll piss off thousands of people on pcp in 3 years.

mickdw

Kaiser84 wrote: »

That's word for word what I was told too, so that's good to hear.

My boss put 115,000 kms on a 142 Ford connect he got on pcp. He changed for a 161 in January and it didn't affect the valuation.

As you said and we've been told it's surely just a measure from the dealers to protect themselves from fleet owners.

I can't see dealerships moving the goalposts so much that they'll piss off thousands of people on pcp in 3 years.

The 115k km would have effected his equity somewhat compared to if there was only 30k km on it but not majorly so.

jca

Kaiser84 wrote: »

That's word for word what I was told too, so that's good to hear.

My boss put 115,000 kms on a 142 Ford connect he got on pcp. He changed for a 161 in January and it didn't affect the valuation.

As you said and we've been told it's surely just a measure from the dealers to protect themselves from fleet owners.

I can't see dealerships moving the goalposts so much that they'll piss off thousands of people on pcp in 3 years.

I don't share your optimism on that one tbh. Dealers aren't going to want too many 100/ 150k 3 year old cars sitting on their lot. I think they'll do what they've always done, insult you with a value and only be interested in the low mileage cars. PCP would suit me and especially the dealer as I struggle to do 10k a year but in saying that I still don't trust them, as I've said before car salesmen have extremely short memories and 3 years is a lifetime to them.

jca

Kaiser84 wrote: »

Can you link me to this on the Skoda site please? I can't find it on the site any where.

Thanks.

I can't unfortunately because on reflection I think it was the local salesman who said it to me. I'm after looking at so many cars and being on so many sites my poor skull is imploding.

Kaiser84

jca wrote: »

I can't unfortunately because on reflection I think it was the local salesman who said it to me. I'm after looking at so many cars and being on so many sites my poor skull is imploding.

Haha. I'm the same.

I got the dealer to write down on paper everything we've agreed thus far for that reason too.

jca

Kaiser84 wrote: »

Haha. I'm the same.

I got the dealer to write down on paper everything we've agreed thus far for that reason too.

That's a good idea, they can tend to suffer from "selective memory"

Drummerboy08

It is 20,000km per year on the Skoda PCP.

Doesn't make a huge amount of difference if your mileage turns out to be even up to 10,000km more per year - I'll just value the car as a 3 year old car with 90k on it instead of 60k, so the drop in equity is probably no more than a 1000 euro.

When you start getting to the point that the extra mileage has depreciated the car to the extent that it's worth less than the GFV then you're in trouble.

flamegrill

Drummerboy08 wrote: »

It is 20,000km per year on the Skoda PCP.

Doesn't make a huge amount of difference if your mileage turns out to be even up to 10,000km more per year - I'll just value the car as a 3 year old car with 90k on it instead of 60k, so the drop in equity is probably no more than a 1000 euro.

When you start getting to the point that the extra mileage has depreciated the car to the extent that it's worth less than the GFV then you're in trouble.

Typically the max is 25k. It's model dependant. Also the GMFV is affected by your choice of mileage.

I'm not sure that 60k to 90k is only going to drop 1000 euro. The problem really comes down to the dealer is the one doing the valuation and they always want you to put money in. So you need to ensure you don't give them a reason to give you a **** valuation.

Drummerboy08

flamegrill wrote: »

Typically the max is 25k. It's model dependant. Also the GMFV is affected by your choice of mileage.

I'm not sure that 60k to 90k is only going to drop 1000 euro. The problem really comes down to the dealer is the one doing the valuation and they always want you to put money in. So you need to ensure you don't give them a reason to give you a **** valuation.

With skoda there is a 30k option on the Superb, but not on the Octavia.

Would you pay 1000 more for a car with 30k less on it?

Best way to ensure the valuation is correct is to price a couple of dealers, no different than you would normally. You're not tied to one dealer with a PCP agreement.

sunnysoutheast

flamegrill wrote: »

Pcp is not hire purchase. You never own the car. You're essentially leasing it for a term.

You are not leasing the car. A lease does not (usually) have a meaningful purchase option. With Hire Purchase, as with a PCP, you do not legally own the goods until the final payment is made. With a PCP, simply pay the balloon payment and the car is yours.

A PCP is nothing more than a secured loan (on the vehicle) with a large deferred payment. As there is no capital repayment of this sum during the term the monthly payments are lower than with conventional HP.

The US has been selling cars in this way for 30 years and the UK for getting on for 20, I took out my first "PCP" (actually called a lease with a purchase option as the car was a pre-reg. and PCPs at that time were only for new cars) on a Golf in 1998.

Nonoperational

It's really quite a good product if you go in knowing what it's about. In 3 years my GFV is 14k. The car will almost certainly be worth a bit more. If the roll over doesn't suit, I'll just buy it for 14k cash and trade it in against a different marque if that's what I want to do. I'm in a position where my job is pretty much guaranteed and i'll have the cash to pay off the 14k if needs be. At an interest rate of 1.9% I found it very preferable to a bank loan at 8%. At that APR I prefer to take the finance rather than depleting the savings by 40k all in one go. Some people will say that's stupid but it worked remarkably well for me.

Lantus

My mileage was well above the 20k which I was up front about. Again told that its not an issue. No need to even note this.

Also if you were lucky enough to buy an e189 engine in a Skoda, vw or Audi you can expect 1500 in money towards the next car as well as a good will gesture. Combined with the lowest interest rates or almost zero its just more good news for those drivers.

mickdw

Lantus wrote: »

My mileage was well above the 20k which I was up front about. Again told that its not an issue. No need to even note this.

Also if you were lucky enough to buy an e189 engine in a Skoda, vw or Audi you can expect 1500 in money towards the next car as well as a good will gesture. Combined with the lowest interest rates or almost zero its just more good news for those drivers.

Its that 1500 going to happen here

Falcon L

FWIW, my thoughts/questions/ramblings on PCP.

Over the 3 year term it's likely that a new model will be launched. How will this affect the market value of your (old model) car? How can you do your homework on the market value when the model is only 2 or 3 years into it's run? The value of the older model really muddies the water.

Is a lower GFV always a better deal?

Mileage doesn't seem to be a huge factor. I was quoted 6c per Km over the agreed mileage, with the rider that "the mileage is really between you and me" comes from the dealer. It actually works out cheaper to sign up for 10K, do 15K and pay for the kms than it is to sign up for 15K and do 15K.

Some garages are acting the sack with the finance. I went to one dealer that was quoting 6.9% for the PCP finance. Another dealer of the same marque told me that the bank is in-house and the rate is 4.9%. On returning to the original dealer and asking if the finance was with the in-house bank, the % magically dropped to 4.9%. The finance guy was obviously selling me a product that gave him, personally, a higher commission. Be careful of this one when working out a deal.

Any thoughts on the above would be appreciated.

Drummerboy08

mickdw wrote: »

Its that 1500 going to happen here

Not that I've seen anywhere.

Kaiser84

Drummerboy08 wrote: »

With skoda there is a 30k option on the Superb, but not on the Octavia.

Would you pay 1000 more for a car with 30k less on it?

Best way to ensure the valuation is correct is to price a couple of dealers, no different than you would normally. You're not tied to one dealer with a PCP agreement.

So at the end of my 3 years I don't have to go back to Skoda? Just so long asI clear the balloon payment, is it?

flamegrill

Kaiser84 wrote: »

So at the end of my 3 years I don't have to go back to Skoda? Just so long asI clear the balloon payment, is it?

Nope, you don't have to go to Skoda. As long as Car value is greater than the baloon payment in the eyes of other dealers, which it may not!

What I see happening is people trying to sell their car and making a few quid and walking away and entering into another agreement with another Car company.

it's a hard one to call.

Drummerboy08

Kaiser84 wrote: »

So at the end of my 3 years I don't have to go back to Skoda? Just so long asI clear the balloon payment, is it?

Nope. You're free to go to any dealer or any brand (although for some reason I think Ford may try to tie you in to staying with the brand, no sure) and whatever value they put on your car the GFV comes off that.

737max

Are these PCP deals any good for a senior citizen travelling on low mileage who wants to treat themselves to a new car but without the hassle of actually owning the car and perhaps retiring from driving at the end of the credit agreement period?
Which companies allow 10k km distances per year?

Falcon L

737max wrote: »

Are these PCP deals any good for a senior citizen travelling on low mileage who wants to treat themselves to a new car but without the hassle of actually owning the car and perhaps retiring from driving at the end of the credit agreement period?
Which companies allow 10k km distances per year?

Renault go as low as 10K. Most seem to start at 15K.

mickdw

737max wrote: »

Are these PCP deals any good for a senior citizen travelling on low mileage who wants to treat themselves to a new car but without the hassle of actually owning the car and perhaps retiring from driving at the end of the credit agreement period?
Which companies allow 10k km distances per year?

Not great tbh as if they are going to hand the car in at year 3, they will be dumping a fair bit of cash into the dealers hands in the form of a car worth significantly more than what they owe on it to buy it outright

gocall01

MuppetCheck wrote: »

Depends on the garage tbh. I'd say if you could sell your own privately you'd be in a much better position though.

If you want the details of a really good Skoda guy in Cork let me know. He bettered anything I got elsewhere by a considerable amount and was refreshingly straight up to deal with.

Was that is Bandon by any chance MuppetCheck?
In the middle of all the research at the moment.