PCP finance.

GavMan

sheff the ref wrote: »

Would be very interested in seeing how that would stand up in the future. At 7cent a km, that equates to 700 euro for every 10,000 km.

30,000 km over budget would be €2100 of a penalty which does not seem excessively harsh considering the probably devaluation of a car with 30,000 more km on the clock

If you weren't looking to roll into a new PCP, you could always sell it yourself privately and clear the GMFV yourself, thus avoiding the penalty.

Falcon L

GavMan wrote: »

If you weren't looking to roll into a new PCP, you could always sell it yourself privately and clear the GMFV yourself, thus avoiding the penalty.

The problem is that you have to do it the other way round. Clear the finance and then sell the car. A short term loan may be needed.

guylikeme

GavMan wrote: »

If you weren't looking to roll into a new PCP, you could always sell it yourself privately and clear the GMFV yourself, thus avoiding the penalty.

Thoughts on clearing the finance, them reselling it to garage as part exchange for a new car?

Would imagine this would put one up money wise

mickdw

guylikeme wrote: »

Thoughts on clearing the finance, them reselling it to garage as part exchange for a new car?

Would imagine this would put one up money wise

That is pretty much what you do anyway. You get a trade in value when looking to change cars. If you dont think it's a fair price, go somewhere else. The garages can all handle clearing finance etc so it's not an issue.
You could walk into toyota with a vw on pcp, have your settlement figure from vw bank to hand and the toyota dealer will happily work out a deal.

carsfan

Agree with mick
Any garage will clear the finance and what is left over is yours towards the car they are hoping to sell you. You don't have to pay it off or anything first yourself.
Re bmw I was surprised at penalties for paying off early.
Finance guy said bmw want 60 per cent plus of finance on pcp as they reckon it is the best way of retaining customers.

mickdw

I think you are looking at the bmw interest issue wrongly.

With an early settlement, you will be paying less interest than you would have been if you finished out the deal.
So if the entire deal had a cost of credit of €3000, paying off early, you might only be paying 2000 interest for example plus a further 3 months interest penalty.
My point is that it is not a penalty on top of agreed interest amount, it is a penalty for escaping with reduced interest.

Drummerboy08

A lot of loans are like that, it's not just bmw's pcp.

carsfan

I understand your view mick. I'm not complaining as I understand a lot of loans are like this. I do wonder why VW bank don't charge this when paying off early however.

mickdw

carsfan wrote: »

I understand your view mick. I'm not complaining as I understand a lot of loans are like this. I do wonder why VW bank don't charge this when paying off early however.

Are you sure they don't.
If you go back early with a vw, you will get a settlement letter with a figure. Have you worked out how they arrive at this figure. It will be less than if you had run the entire term but how exactly is it calculated?

carsfan

Another poster, vintage vrs reckons they don't. I haven't actually asked VW.
The bmw figures were for the 330e. Did they ever come back up you about it?

mickdw

carsfan wrote: »

Another poster, vintage vrs reckons they don't. I haven't actually asked VW.
The bmw figures were for the 330e. Did they ever come back up you about it?

I got the figures for the 330e and posted them here. At their second attempt they got it right in terms of applying grants.
The figures are good tbh but I just think it's the wrong car at the minute for me and would favour the c class in that bracket. They are letting me know when they get one in anyway as they have a car ordered for a customer he told me.
Can't see test drives being offered on that though.

sheff the ref

Got a quote on a Seat Ibiza 1.4 diesel 75bhp Sport today.

Cost after my trade in: 12,859.84
GMFV: €7300 (also amount of money owed on the car)
Mileage Limit: 20,000 to 30,000 km
Monthly Payment is: €154.44

Discussed changing after 2 years as opposed to 3 years. Advantages would be that mileage is obviously lower making it a more attractive car to sell on and I would have a fresh car after 2 years. Lets say I do 40,000km, over 2 years it is 80,000km which doesnt seem as bad as the 120,000 over 3 years which looks a lot on a clock. Obviously it is the exact same thing but perception is everything.

Basically to change after two years, it would mean obviously that I wouldnt be making the payments in Year 3 so €154.44 x 12 = €1853.28. That money would be added to the €7300 giving a total amount of finance owed on the car of €9153.28

To start a new PCP realistically I would need to be looking at perhaps a value of €14,500 after 2 years. Is that achievable???

.G.

141 Ibiza's today on carzone ranging from just under 15k to just over 13k. That would give you an idea of what a dealer will sell it for in 2 years but not what they'll give you for it.

sheff the ref

They appear to be 1.2 diesels, how much of a difference that would make to price compared to 1.4 diesel, I don't know. Dealer wont lose anyway. I guess it is a gamble. The only thing I will say is that my own car has 200+ km on the clock. Wear and tear expense will start to kick in from now on and I may as well be paying for a new car in lieu of future amounts spent.

superg wrote: »

141 Ibiza's today on carzone ranging from just under 15k to just over 13k. That would give you an idea of what a dealer will sell it for in 2 years but not what they'll give you for it.

seb102

I've been reading this thread to try and decide if I should go for PCP or HP. I got this quote for a second hand Golf from a VW dealer:

Cost: 21000 (after trade-in)
GMV: 6900
Monthly payment: 470

So if I'm not mistaken, that means I'd end up paying 2800 in interest. Seems a bit high to me, are they ripping me off or am I missing something? I forgot what the APR was on this, but it's definitely much higher than what they offer for new cars (0% or 3.9% depending on model) and also seems higher than for HP.

On the other hand, if I bough it with an HP plan, I could have similar monthly payments over 4 years but still end up paying less in total.

So in this case I don't see any advantage at all choosing PCP, other than paying less over the first 3 years, but ending up paying more at the end (or losing money if I trade in for another car).

pd: Seems like to take advantage of PCP I might do better buying a new car for say 30k. If it is really 0% APR I wouldn't be paying much more than for the 2nd hand one, although I imagine a new car will depreciate a lot more over 3 years than a 2nd hand.

sheff the ref

I am not saying I am correct but I am leaning towards the view that 0% PCP is probably better for smaller cars (Roughly €20,000 or less) in that predicting the value of the car in 3 years time is a gamble and with a smaller car there is less risk and less of a final payment.

With a bigger car (€30,000+) you have pumped in more money over the three years even at 0%, have a bigger final payment and have far more scope for depreciation

It all depends on what you like to drive, and what status you wish to portray I guess

737max

Problem with PCP is dealers are unwilling to negotiate and distributors want to make super-normal profits.
This is where this type product from SIXT would be very useful if it were available in Ireland.

http://www.sixt-neuwagen.de/

SIXT have purchasing/negotiating power which private buyers do not have.

They offer PCP and lease deals at ridiculously low rates and are very flexible.
For example no down-payment and 85 euro a month for a Hyundai i10 over 4 years is very attractive.

There is also more flexibility with regard to term duration, maintenance packages and included insurance.

A Colleague of mine is considering using this firm while waiting to qualify for a company car in 2.5 years time.
His best options are either this or run a banger car until eligible for a company car.

sheff the ref

737max wrote: »

Problem with PCP is dealers are unwilling to negotiate and distributors want to make super-normal profits.
This is where this type product from SIXT would be very useful if it were available in Ireland.

http://www.sixt-neuwagen.de/

SIXT have purchasing/negotiating power which private buyers do not have.

They offer PCP and lease deals at ridiculously low rates and are very flexible.
For example no down-payment and 85 euro a month for a Hyundai i10 over 4 years is very attractive.

There is also more flexibility with regard to term duration, maintenance packages and included insurance.

A Colleague of mine is considering using this firm while waiting to qualify for a company car in 2.5 years time.
His best options are either this or run a banger car until eligible for a company car.

How do they make money at those prices?? There appear to be phenomenal deals there

737max

cars are cheaper to buy new in Germany and resale prices are higher thanks to in-exhaustible demand from Eastern Europe.
For example, in my company car leasing scheme which is operated by SIXT leasing, the discount on new Opel Insignias "to order" not in stock is 38% off retail price.

737max

You know you are in a competitive market when the % discount available is stated differently dependent upon whether you are buying with flat or metallic paint.

seb102

sheff the ref wrote: »

I am not saying I am correct but I am leaning towards the view that 0% PCP is probably better for smaller cars (Roughly €20,000 or less) in that predicting the value of the car in 3 years time is a gamble and with a smaller car there is less risk and less of a final payment.

With a bigger car (€30,000+) you have pumped in more money over the three years even at 0%, have a bigger final payment and have far more scope for depreciation

It all depends on what you like to drive, and what status you wish to portray I guess

It's still better than standard finance isn't it? Especially if you intend to keep the car. A big car is going to lose value regardless of how you pay for it. It's just a matter of saving up for that final payment over 3 years.

Drummerboy08

737max wrote: »

Problem with PCP is dealers are unwilling to negotiate and distributors want to make super-normal profits.
This is where this type product from SIXT would be very useful if it were available in Ireland.

http://www.sixt-neuwagen.de/

SIXT have purchasing/negotiating power which private buyers do not have.

They offer PCP and lease deals at ridiculously low rates and are very flexible.
For example no down-payment and 85 euro a month for a Hyundai i10 over 4 years is very attractive.

There is also more flexibility with regard to term duration, maintenance packages and included insurance.

A Colleague of mine is considering using this firm while waiting to qualify for a company car in 2.5 years time.
His best options are either this or run a banger car until eligible for a company car.

There is no problem negotiating prices when buying a car on pcp.

737max

Drummerboy08 wrote: »

There is no problem negotiating prices when buying a car on pcp.

I would dispute this. negotiating with a dealer is like dancing with a devil.

dloob

So I've moved onto my second PCP recently and I guess there would be some interest in how that went.

On the first PCP I got a 131 Audi A3 Sportback 1.6 TDI.
It was 29.5K, it was the last of the old model so it got the S Line upgrade cheap along with some other bits like tinted windows and bigger alloys.
Deposit 6K
Cost 29.5K
Repayments 345
Settlement 12K
Mileage 20K a year

So almost 3 years later it's time to finish the deal.
No cheap S Line upgrades on offer this time and I want moar power too so I'm expecting it to cost more.
Audi offer a trade in of 18600 against a S Line A3 Sportback 1.4 TFSI 150.
Deposit 131 Audi + 800
Cost 36K
Repayments 476
Settlement 14K
Mileage 20K a year


Other dealers offered better trade ins but the best was BMW
BMW offered 21500 on a 120i sport (cost of about 38.5K)
Deposit 131 Audi
Cost 38.5K
Repayments 417
Settlement 16K
Mileage 15K a year

So I have a 120i now, Audi did later increase the trade in to 19K when informed of the better offers
They still seemed surprised when I told them I wouldn't be buying their car.


So in my case the monthly is up by over 50 on the original deal but then I did switch to a car costing near to 10K more up front.

I handed the Audi to BMW when I picked up the 120i and they sent a cheque to Audi Finance clearing the remaining finance.
Audi Finance still took another months payment out of my bank a week later mind you but it was no hassle getting it back from them.

guylikeme

737max wrote: »

I would dispute this. negotiating with a dealer is like dancing with a devil.

Simple idea - ask him for alot of extras and if (WHEN) he says "i cant", say "Ah c'mon, your not even meeting me half-way. Tell you what, fill it with fuel and ill take it"

€70 odd is better than a kick up the arsz (in my experience)

Drummerboy08

737max wrote: »

I would dispute this. negotiating with a dealer is like dancing with a devil.

You're either dealing with a clown or your negotiation skills are quite poor.

Dealers are tripping over themselves to sell cars at the moment so getting some discount off a car on a pcp shouldn't be too hard.

sheff the ref

seb102 wrote: »

It's still better than standard finance isn't it? Especially if you intend to keep the car. A big car is going to lose value regardless of how you pay for it. It's just a matter of saving up for that final payment over 3 years.

Definitely Big Car on 0% PCP is better than a Big Car with interest

However I feel that a Small car on 0% PCP is less of a gamble than a Big car on 0% PCP

yop

737max wrote: »

I would dispute this. negotiating with a dealer is like dancing with a devil.

I've negotiated on the last 2 cars I have bought and "won"
Both were 0% PCP

mickdw

dloob wrote: »

So I've moved onto my second PCP recently and I guess there would be some interest in how that went.

On the first PCP I got a 131 Audi A3 Sportback 1.6 TDI.
It was 29.5K, it was the last of the old model so it got the S Line upgrade cheap along with some other bits like tinted windows and bigger alloys.
Deposit 6K
Cost 29.5K
Repayments 345
Settlement 12K
Mileage 20K a year

So almost 3 years later it's time to finish the deal.
No cheap S Line upgrades on offer this time and I want moar power too so I'm expecting it to cost more.
Audi offer a trade in of 18600 against a S Line A3 Sportback 1.4 TFSI 150.
Deposit 131 Audi + 800
Cost 36K
Repayments 476
Settlement 14K
Mileage 20K a year


Other dealers offered better trade ins but the best was BMW
BMW offered 21500 on a 120i sport (cost of about 38.5K)
Deposit 131 Audi
Cost 38.5K
Repayments 417
Settlement 16K
Mileage 15K a year

So I have a 120i now, Audi did later increase the trade in to 19K when informed of the better offers
They still seemed surprised when I told them I wouldn't be buying their car.


So in my case the monthly is up by over 50 on the original deal but then I did switch to a car costing near to 10K more up front.

I handed the Audi to BMW when I picked up the 120i and they sent a cheque to Audi Finance clearing the remaining finance.
Audi Finance still took another months payment out of my bank a week later mind you but it was no hassle getting it back from them.

Interesting. We need more examples like this to see how gfv are working versus trade in.
Worked out reasonably in this case to be fair.

dloob

mickdw wrote: »

Interesting. We need more examples like this to see how gfv are working versus trade in.
Worked out reasonably in this case to be fair.

It's probably a little bit of special case as the A3 was higher spec than normal to shift the last of the old models.
Although I suppose the fact that there is a newer model in the same year would decrease it's value too and balance that out a bit.

Anyway I'll let you know how I get on in three years!
It looks to me that BMW are being maybe a bit more aggressive on the GFV to reduce the monthly payments.

mickdw

dloob wrote: »

It looks to me that BMW are being maybe a bit more aggressive on the GFV to reduce the monthly payments.

Ya they generally seem to do that.
might leave ya alittle more short on deposit at the end.

Fiskar

dloob wrote: »

It's probably a little bit of special case as the A3 was higher spec than normal to shift the last of the old models.
Although I suppose the fact that there is a newer model in the same year would decrease it's value too and balance that out a bit.

Anyway I'll let you know how I get on in three years!
It looks to me that BMW are being maybe a bit more aggressive on the GFV to reduce the monthly payments.

Interesting calculations, BTW, nice choice of car and engine, way better than the 1.4TFSI

BMW 120ti sport

Cost of car = €38,500

Deposit = €21,500
PCP cost =€15,012 (417*36)
Settlement €16,000

total cost to get car =€52,512 less Audi Settlement of €12,000

Is the above technically correct? Yes

We got a Hi line Golf last year on PCP

Cost of Car =€27,422 less discount €1,440 = €25,982

Deposit = €5,248
PCP cost=€11,818
Settlement €9,988

total cost to get car =€27,054

GustavoFring

Fiskar wrote: »

Interesting calculations but I cannot get my head around the sums, am I missing something from the list below? BTW, nice choice of car and engine, way better than the 1.4TFSI

BMW 120ti sport

Cost of car = €38,500

Deposit = €21,500
PCP cost =€15,012 (417*36)
Settlement €16,000

total cost to get car =€52,512

Is the above technically correct?

We got a Hi line Golf last year on PCP

Cost of Car =€27,422 less discount €1,440 = €25,982

Deposit = €5,248
PCP cost=€11,818
Settlement €9,988

total cost to get car =€27,054

Take his own settlement off that is how I read it.

Fiskar

Gotcha, the Audi settlement, cheers, was getting worried

mickdw

Bmw offered 21.5k for the audi but there was 12k owed on it so a real deposit of 9.5k towards the bmw.

Edit - mistake corrected

dloob

GustavoFring wrote: »

Take his own settlement off that is how I read it.

Yes that's right, you need to take the finance settlement to Audi away from the trade in values.
So it's 21500 -12,000

Fiskar

dloob wrote: »

Yes that's right, you need to take the finance settlement to Audi away from the trade in values.
So it's 21500 -12,000

Cheers, that is a good deal.

sheff the ref

yop wrote: »

I've negotiated on the last 2 cars I have bought and "won"
Both were 0% PCP

It is a very good time to be buying new cars at 0% finance because the car companies have aggressive targets to meet and if they get a smell that you are genuinely willing to purchase, you will get a good deal at the end of the month or the end of the quarter. In that case your power of negotiation is greater, particularly if they have a customer for your trade-in.

You might sometimes get an upgraded spec if there there is a an unsold model of the car in the country and they need to get it off the books immediately, and the spec you really want will take a couple of months to manufacture. They don't want to lose you either.

All about being in the right place at the right time

MidlandsCarol

Guys reading up loads on pcp and have so far only spoken to mazda but can u tell me where or how u get the 0% finance?? On Mercedes and audi I only see 3.9% or 5.9%. Thanks! I'm trading in 132 mazda 6 and probably trading down. TIA

sheff the ref

MidlandsCarol wrote: »

Guys reading up loads on pcp and have so far only spoken to mazda but can u tell me where or how u get the 0% finance?? On Mercedes and audi I only see 3.9% or 5.9%. Thanks! I'm trading in 132 mazda 6 and probably trading down. TIA

I think most of the 0% finance deals ended in February. Only the car companies that have their own banks were offering it. Volkswagon and its associated brands Skoda and Seat and probably Renault

vintagevrs

Depends on the manufacturer just. VW and Seat currently do 0% finance on some of their range. Maybe others too that I am not aware of.

markad1

VW are doing PCP 0% on select highline models till end of March.

http://ext.volkswagen.ie/en/2016.html

seb102

Anyone know how often brands like Volkswagen have those 0% offers? Is it every year?

Fiskar wrote: »

Interesting calculations, BTW, nice choice of car and engine, way better than the 1.4TFSI

BMW 120ti sport

Cost of car = €38,500

Deposit = €21,500
PCP cost =€15,012 (417*36)
Settlement €16,000

total cost to get car =€52,512 less Audi Settlement of €12,000

Is the above technically correct? Yes

We got a Hi line Golf last year on PCP

Cost of Car =€27,422 less discount €1,440 = €25,982

Deposit = €5,248
PCP cost=€11,818
Settlement €9,988

total cost to get car =€27,054

What was the APR on that? 1.9%?

Fiskar

Yes Seb102, it was 1.9% finance. A steal of a deal.

Liam McPoyle

Hi folks.

Myself and my wife are looking at getting a new car and using PCP but are completely new to it.

We were in a VW dealership today and the below is what was offered.

Vehicle price - €28,388, 1.2 Golf TSI.

Deposit is €2,833

Monthly installments are €430 @ 0% APR.

GFV of €10,000.

Is this a good deal?

In terms of the mileage, my wife will be the main driver, we would anticipate annual mileage would 30k km or less over the three years.

Re the GFV, am I right in thinking that €10k is the minimum but it could end up being worth more than that?

Say it was worth €12k and we decided to get a new car in 2019 with the same dealer, would the vehicle value be put against a new car, say the new car was €30, would we owe €18k?

Setting up the PCP again would presumably mean the installments on next vehicle would be lower (depending on interest rates etc) than we would be paying on the 2016 model?

Hope the above makes sense!

Fiskar

Business Cat wrote: »

Hi folks.

Myself and my wife are looking at getting a new car and using PCP but are completely new to it.

We were in a VW dealership today and the below is what was offered.

Vehicle price - €28,388, 1.2 Golf TSI.

Deposit is €2,833

Monthly installments are €430 @ 0% APR.

GFV of €10,000.

Is this a good deal?

In terms of the mileage, my wife will be the main driver, we would anticipate annual mileage would 30k km or less over the three years.

Re the GFV, am I right in thinking that €10k is the minimum but it could end up being worth more than that?

Say it was worth €12k and we decided to get a new car in 2019 with the same dealer, would the vehicle value be put against a new car, say the new car was €30, would we owe €18k?

Setting up the PCP again would presumably mean the installments on next vehicle would be lower (depending on interest rates etc) than we would be paying on the 2016 model?

Hope the above makes sense!

What is the balloon payment due after 3 years?

sillysocks

Business Cat wrote: »

Hi folks.

Myself and my wife are looking at getting a new car and using PCP but are completely new to it.

We were in a VW dealership today and the below is what was offered.

Vehicle price - €28,388, 1.2 Golf TSI.

Deposit is €2,833

Monthly installments are €430 @ 0% APR.

GFV of €10,000.

Is this a good deal?

In terms of the mileage, my wife will be the main driver, we would anticipate annual mileage would 30k km or less over the three years.

Re the GFV, am I right in thinking that €10k is the minimum but it could end up being worth more than that?

Say it was worth €12k and we decided to get a new car in 2019 with the same dealer, would the vehicle value be put against a new car, say the new car was €30, would we owe €18k?

Setting up the PCP again would presumably mean the installments on next vehicle would be lower (depending on interest rates etc) than we would be paying on the 2016 model?

Hope the above makes sense!

From my understanding you don't have the trade in part right. So at the end the gmv is 10k , and this is what you still owe to the finance company. So you would be guaranteed 10k value, but you still owe 10k so that balances you to zero. So if say car was actually worth 12k, 10k of that goes to paying off the balance of finance and you just have 2k of deposit towards the new car. Hope that makes sense!

Liam McPoyle

Fiskar wrote: »

What is the balloon payment due after 3 years?

Approx €10k.

sillysocks wrote: »

From my understanding you don't have the trade in part right. So at the end the gmv is 10k , and this is what you still owe to the finance company. So you would be guaranteed 10k value, but you still owe 10k so that balances you to zero. So if say car was actually worth 12k, 10k of that goes to paying off the balance of finance and you just have 2k of deposit towards the new car. Hope that makes sense!

Ahh, ok, I misinterpreted it.

So if we were to go on to another finance deal, we would hand back the car, and any residual value over the GFV would serve as the deposit (or part there of)?

Millem

Business cat I got pcp with vw last year, have you told them your annual km? I thought they work it out on a 20,000km per year basis?

sillysocks

Business Cat wrote: »

Approx €10k.



Ahh, ok, I misinterpreted it.

So if we were to go on to another finance deal, we would hand back the car, and any residual value over the GFV would serve as the deposit (or part there of)?

Yep that's it as far as I know!
If you work it out that makes sense too, 430x36 payments only gives you 15k repaid to them so you would still owe the rest before you own the car!