PCP finance.

Soarer

EndaHonesty wrote: »

I'll use simple figures.

Buy a car worth €35,000
Deposit €5,000
GMFV €15,000
Interest Rate: 3.0%
Term: 36 months
Cost of Credit: 1388.44
Monthly Amount: €455.23
Total amount financed: €30,000

Total amount of monthly payments: €16388.28
GMFV: €15,000
Deposit: €5,000
Total amount: €36,388.28

Actual Value after 36 months: €18,500

So at the end of 36 months you owe the finance company €15,000.
You can pay them that and own the car, hand it back or use the equity (€3,500) to start a new PCP.

If you give them €15,000 you will own a car worth €18,500. A car that you know since it was brand new.

It's the same as a hire purchase system with smaller monthly payments and a large final payment.

It suits some people and doesn't suit others. It is neither good or bad.

I have bought a car on PCP with 0% interest, so free money. I paid the smallest deposit possible to get the most free money.
I will buy the car at the end of the 36 months and decide then what to do.

I did not trade at the beginning of the deal so I got the straight deal discount, €2,250 and I got 3 free services too.

My distance allowance was 12,000kms per year and after almost 12 months I already have 36,000kms done,
but it's not an issue for me because I intend to buy the car at the end of the term.

I am very happy with my arrangement.

That example you gave is the perfect scenario, which almost always isn't the case. I love the way you just decide the actual value of the car. Shoulda made it €20k. Shur why not? It's as random as €18,500.

But if you substitute your situation into your own example, you've done your 3 years' mileage in one year. Continue that over the next 2 years, and you've 110k kms on the car that you should only have 36k kms. So you've gone over your limit by 74k kms.

There's a penalty for every kilometre you go over. I don't know yours, but I'm gonna use Kia's 10c per kilometre as they're also offering 0% PCP.

Now, using your real life situation in your perfect example.
You know have a penalty of €7400 owing due to mileage.
Plus you've €15k outstanding to the finance company.

Now you've a 3 year old car, with 110k kms on the clock.
You've already paid €21388.28 for the last 3 years of ownership.
To buy it outright, you have to pay €22,400.

So the car is now after costing you a minimum of €43,788.28, as I'm sure with such high mileage, the dealer will be quick to point out the extra wear and tear on all other components, thus reducing the value even more.

And you think I don't understand things!

Soarer

EndaHonesty wrote: »

Tell me where the "catch" is in my deal? I paid the same amount for the car as I would've if I had given them cash on day one.

Tell us all the details of your deal, and I'll have no problem telling you where the catch is.

Marcusm

Soarer wrote: »

Why?

Basically you're borrowing €20k (GFV) over 3 years, paying interest on said €20k (GFV), and then giving back the €20k (GFV). All the while you're paying for the depreciation.



The US has also had student loans and sub-prime mortgages, both of which are ace!

Because of basic economics, you are financing a 40k asset by placing a deposit, making some regular payments plus then a balloon equal to the GMFV. Of course there is an inherent interest charge included in the calculation of the balloon. You cannot use the 40k which the finance company has to pay to the dealer without paying interest on the full 40k.

It's easiest if you honk about it in absurd terms.

Say the deposit was €1 and the monthlies were €1 each. Would you still expect the final payment or GMFV to be 40,000-1-(36x1) = 39,963? Who would provide finance on that basis?

Soarer

Marcusm wrote: »

Because of basic economics, you are financing a 40k asset by placing a deposit, making some regular payments plus then a balloon equal to the GMFV. Of course there is an inherent interest charge included in the calculation of the balloon. You cannot use the 40k which the finance company has to pay to the dealer without paying interest on the full 40k.

It's easiest if you honk about it in absurd terms.

Say the deposit was €1 and the monthlies were €1 each. Would you still expect the final payment or GMFV to be 40,000-1-(36x1) = 39,963? Who would provide finance on that basis?

I understand the maths behind it. Just can't understand how people think it's a good idea.

Different strokes for different folks I guess.

Soarer

OSI wrote: »

The mileage penalty is only applicable if you're handing the car back, it does not come into play in any other scenario.

Ah ok, didn't know that.

That means that you have to pay a €15k lumpsum for a car that's actually only worth €10k due to excessive mileage.

Still can't see how it's a good idea.

Brian Scan

EndaHonesty wrote: »

Lads you clearly don't understand pcp car finance, or indeed interest and principle.

What did I say that indicated that?

conzy

People seem so put off by this PCP scheme. You can put in a decent deposit and have nice friendly monthly payments and still owe a huge amount that you can't afford at the end. Just like you can get an unsustainable mortgage or buy a phone you can't afford by hiding the costs in a 2 year contract. Whether its a car, a phone or a house its up to the consumer not to end up in an unsustainable situation.

Jack lemmon

Soarer wrote: »

That example you gave is the perfect scenario, which almost always isn't the case. I love the way you just decide the actual value of the car. Shoulda made it €20k. Shur why not? It's as random as €18,500.

But if you substitute your situation into your own example, you've done your 3 years' mileage in one year. Continue that over the next 2 years, and you've 110k kms on the car that you should only have 36k kms. So you've gone over your limit by 74k kms.

There's a penalty for every kilometre you go over. I don't know yours, but I'm gonna use Kia's 10c per kilometre as they're also offering 0% PCP.

Now, using your real life situation in your perfect example.
You know have a penalty of €7400 owing due to mileage.
Plus you've €15k outstanding to the finance company.

Now you've a 3 year old car, with 110k kms on the clock.
You've already paid €21388.28 for the last 3 years of ownership.
To buy it outright, you have to pay €22,400.

So the car is now after costing you a minimum of €43,788.28, as I'm sure with such high mileage, the dealer will be quick to point out the extra wear and tear on all other components, thus reducing the value even more.

And you think I don't understand things!

You don't pay the mileage penalty if your buying the car at the end or if you trade up to a new car at the end! You only pay that penalty if you hand the car back, very very few ppl will do that if any as it would be a poor division even with no mileage penalty.

grogi

EndaHonesty wrote: »

Tell me where the "catch" is in my deal? I paid the same amount for the car as I would've if I had given them cash on day one.

I am just saying that in that business there is no charity.

Jack lemmon

grogi wrote: »

I am just saying that in that business there is no charity.

0% interest is a fantastic deal for any financial agreement. And there's no catch to PCP.

Zonda999

Jack lemmon wrote: »

You don't pay the mileage penalty if your buying the car at the end or if you trade up to a new car at the end! You only pay that penalty if you hand the car back, very very few ppl will do that if any as it would be a poor division even with no mileage penalty.

That can't be correct surely if you're "trading up" because the dealer is left with a car with a substantially higher mileage compared to someone on the same PCP who has stuck within their mileage allowance. the car with the higher mileage is worth less, the customer will be paying for that surely?

I won't lie, I'm a bit sceptical as regards PCP but seeing as I don't see myself buying a brand new car for a very long time, I'm delighted that they're fuelling this big upsurge in new sales because I would hope it will increase depreciation leading to relatively "cheaper" used cars in two or three years from now. Ultimately though, this is where I see the danger. The more cars that are sold by PCP, naturally, there will be a greater supply of used cars which will have the effect of limiting the "equity" that a person will have above the GMFV at the end of the contract, meaning they will have to fork out another chunk of cash at the end to trade up to a new model on the same monthly repayment. Its the uncertainty of this that would really put me off and it is this, I think, that some PCP buyers may not be taking into account currently.

26000 Elephants

Jack lemmon wrote: »

0% interest is a fantastic deal for any financial agreement. And there's no catch to PCP.

Experience a slight change in your circumstances during the agreement, and you will find the catches quick enough.

conzy

26000 Elephants wrote: »

Experience a slight change in your circumstances during the agreement, and you will find the catches quick enough.

How would you be any better off if you had a similar shift in circumstance several months into a 3 year credit union / bank loan?

26000 Elephants

Zonda999 wrote: »

That can't be correct surely if you're "trading up" because the dealer is left with a car with a substantially higher mileage compared to someone on the same PCP who has stuck within their mileage allowance. the car with the higher mileage is worth less, the customer will be paying for that surely?

Of course you are correct. The GMFV is contingent on sticking to the mileage limits. Exceed them, the GMFV increases considerably.

Do people seriously not see this?

26000 Elephants

conzy wrote: »

How would you be any better off if you had a similar shift in circumstance several months into a 3 year credit union / bank loan?

You can sell your car. You can extend your loan. You have several options.

mickdw

Zonda999 wrote: »

That can't be correct surely if you're "trading up" because the dealer is left with a car with a substantially higher mileage compared to someone on the same PCP who has stuck within their mileage allowance. the car with the higher mileage is worth less, the customer will be paying for that surely?

Yes the car is worth less but still typically worth more than the gfv so it's a matter of getting the best price for your trade in when changing up. As you say the mileage will have an effect here but the comment above would be referring to not having to pay the actual mileage penalty per mile over the allowable which can be expensive.

Jack lemmon

26000 Elephants wrote: »

You can sell your car. You can extend your loan. You have several options.

It's all down to everyone's personal needs and security in their job. The loan is secured on the car being financed. So if you don't keep up the payment you will loose the car. After 50% of the loan is payed you can hand back the car. Very low interest rate did it for me. And when trading up you'll get the value of the car, higher mileage will affect that but not by x cent per mile over.

Lantus

26000 Elephants wrote: »

Of course you are correct. The GMFV is contingent on sticking to the mileage limits. Exceed them, the GMFV increases considerably.

Do people seriously not see this?

The mileage values are low and the penalties there primarily to prevent fleet owners availing of cheap PCP over 3 years, racking up hundreds of thousands of km and then just handing the keys back.

For most normal users they will exceed the limits but its not a huge issue. Most normal comparable cars will have very similar mileage.

The mileage can also be applied to an individual if they hand back the keys but I'm not aware of this.

Ultimately the best way out if a PCP is to finance the outstanding balance and pay it off within 3 years.

roadrunnermick

So what I can establish so far is PCP is rigged against the buyer if your trading in at the end of the 2 or 3 year

Is there any downside if your intent is to buy out the car instead of taking out another PCP agreement ?

EndaHonesty

roadrunnermick wrote: »

So what I can establish so far is PCP is rigged against the buyer if your trading in at the end of the 2 or 3 year

Is there any downside if your intent is to buy out the car instead of taking out another PCP agreement ?

There is no rigging. There are no catches. Everything is clearly laid out in the agreement and explained before one signs up.

Adults understand how financial products work.

Your comment shows you are just another who doesn't understand how this product works.

Soarer

EndaHonesty wrote: »

There is no rigging. There are no catches. Everything is clearly laid out in the agreement and explained before one signs up.

Adults understand how financial products work.

Your comment shows you are just another who doesn't understand how this product works.

Adults also know how to engage in discussion, can listen to the other point of view, and don't dismiss all other viewpoints just because they disagree with their own!

You're the most obnoxious poster in this thread, full of this "holier than thou" attitude.

If you're happy with paying €20k over the next 3 years, and then having to stump up another €15k for a 3 year old car with 100k kms on the clock, good for you.

But your condescending attitude towards people that dare to question your way of doing things is immature to say the least.

jelutong

Who can possibly predict what the value of a used car will be in 3 years time?

roadrunnermick

Well really it's all a matter of prospective , if you understand the financial product and accept the possibility that the market in 3 years maybe swamped with used cars thus reducing the residual value of your trade in, As an adult you know what you are getting into ,

My approach is financial conservative and not willing to accept the risk involved.

Given the history of this country with mortgages and loans and adults , I respectively disagree !

It maybe appealing to me as I would be able to to pay off the ballon payment , However I am just trying to understand the possible clauses that would be accosiated with that part of PCP

Any other advice from an "adult" with my prospective would really great rather than sentiment

roadrunnermick

Soarer wrote: »

EndaHonesty wrote: »

There is no rigging. There are no catches. Everything is clearly laid out in the agreement and explained before one signs up.

Adults understand how financial products work.

Your comment shows you are just another who doesn't understand how this product works.

Adults also know how to engage in discussion, can listen to the other point of view, and don't dismiss all other viewpoints just because they disagree with their own!

You're the most obnoxious poster in this thread, full of this "holier than thou" attitude.

If you're happy with paying 20k over the next 3 years, and then having to stump up another 15k for a 3 year old car with 100k kms on the clock, good for you.

But your condescending attitude towards people that dare to question your way of doing things is immature to say the least.

Well said , think a good 2nd hand car and a credit union loan is the way to go for me , I am cash buyer , with no trade in ,should have better leverage to drive a better deal


the devil is in the detail in relation to PCP

Soarer

roadrunnermick wrote: »

Well said , think a good 2nd hand car and a credit union loan is the way to go for me , I am cash buyer , with no trade in ,should have better leverage to drive a better deal


the devil is in the detail in relation to PCP

You're in a great position to buy a 3 year old, low mileage, ex-PCP car, that someone else has happily paid the depreciation for you.

roadrunnermick

Soarer wrote: »

roadrunnermick wrote: »

Well said , think a good 2nd hand car and a credit union loan is the way to go for me , I am cash buyer , with no trade in ,should have better leverage to drive a better deal


the devil is in the detail in relation to PCP

You're in a great position to buy a 3 year old, low mileage, ex-PCP car, that someone else has happily paid the depreciation for you.

Appreciate the advice

Following for sure !

Thanks

EndaHonesty

Soarer wrote: »

Adults also know how to engage in discussion, can listen to the other point of view, and don't dismiss all other viewpoints just because they disagree with their own!

You're the most obnoxious poster in this thread, full of this "holier than thou" attitude.

If you're happy with paying €20k over the next 3 years, and then having to stump up another €15k for a 3 year old car with 100k kms on the clock, good for you.

But your condescending attitude towards people that dare to question your way of doing things is immature to say the least.

You have posted many long-winded and silly posts about this subject, each one shows you have no understanding of PCP finance, Loan Interest, Second-hand Car Residuals and indeed buying cars in general.

100k kms is 60,000 miles.
The general consensus on this forum is low miles are bad for a diesel car.
20,000 mile per year is nothing for a diesel car and yet you think one would be penalised by €5,000 for having this mileage.
Ridiculous.

You have described PCP finance as an "interest only loan".
Ridiculous.

You seem to think that the only cars that suffer depreciation are PCP financed cars.
Ridiculous.

You think that a residual value of 55% after 3 years is impossible.
Ridiculous.

You don't understand PCP finance, you should stop posting your misguided and uniformed rubbish in a thread that is specifically about PCP finance.

grogi

EndaHonesty wrote: »

You have posted many long-winded and silly posts about this subject, each one shows you have no understanding of PCP finance, Loan Interest, Second-hand Car Residuals and indeed buying cars in general.

/.../

You don't understand PCP finance, you should stop posting your misguided and uniformed rubbish in a thread that is specifically about PCP finance.

You must add "You don't understand Insurance" to that list!

EndaHonesty

grogi wrote: »

You must add "You don't understand Insurance" to that list!

Has he posted rubbish about insurance too?!

dissed doc

Soarer wrote: »

Adults also know how to engage in discussion, can listen to the other point of view, and don't dismiss all other viewpoints just because they disagree with their own!

You're the most obnoxious poster in this thread, full of this "holier than thou" attitude.

If you're happy with paying €20k over the next 3 years, and then having to stump up another €15k for a 3 year old car with 100k kms on the clock, good for you.

But your condescending attitude towards people that dare to question your way of doing things is immature to say the least.

If you want to own a €35K car you still actually have to pay €35K. PCP means you don't need to come up with it all in one go. It also allows you to borrow at usually much lower rates than direct financing of e.g. 35K at once from a bank.

Unless people are under the illusion that they can own a 35K car for €20K? But that would require a lot of stupidity. You are still responsible for the deal.

PCP is a pretty decent way to buy a nice new car, for those that can afford it but without making huge monthly finance payments or spending loads of cash savings. With interest so low, sometimes 0%, it makes a lot of sense.

Maybe there are people who think they can own a 35K car by paying 10K + 36 payments of 250 each or something but that is just being an idiot.

Soarer

EndaHonesty wrote: »

You have posted many long-winded and silly posts about this subject, each one shows you have no understanding of PCP finance, Loan Interest, Second-hand Car Residuals and indeed buying cars in general.

Well done on making that assessment. Obviously interpretation is one of the few things you know everything about.

EndaHonesty wrote: »

100k kms is 60,000 miles.
The general consensus on this forum is low miles are bad for a diesel car.
20,000 mile per year is nothing for a diesel car and yet you think one would be penalised by €5,000 for having this mileage.
Ridiculous.

FYI, 100k kms is actually over 62k miles.

You reckon my figure of a €5,000 penalty for such high mileage is "ridiculous", and yet Kia will penalise someone €7,400 on their PCP plan for the same indiscretion? Maybe I should've rounded up, and that's what you're annoyed about?

EndaHonesty wrote: »

You have described PCP finance as an "interest only loan".
Ridiculous.

No I didn't. I asked "If I borrow €20k over 3 years, pay monthly repayments, and in 3 years still have to give back €20k, what else is it only interest only? "

Can you tell me what other term can be used to describe the above?

EndaHonesty wrote: »

You seem to think that the only cars that suffer depreciation are PCP financed cars.
Ridiculous.

Excellent deduction. I didn't even know that's what I was thinking.

EndaHonesty wrote: »

You think that a residual value of 55% after 3 years is impossible.
Ridiculous.

I reckon you're giving me too much credit for all the thinking I'm doing.

EndaHonesty wrote: »

You don't understand PCP finance, you should stop posting your misguided and uniformed rubbish in a thread that is specifically about PCP finance.

I understand it just fine.

What I don't understand is why people do it.
Or maybe more precisely, don't understand how people are so entrenched in their own viewpoint, they can't/won't see the other point of view.

You obviously think it's a good idea, so more power to you. But don't be poo-pooing people that don't think it's a good idea, or question the PCP concept, or, God forbid, actually not understand it as well as you.

opinionated3

Buddy of mine was interested in buying a new high spec tuscon. He wasn't sure if he wanted a regular bank loan or to go down the pcp route as he likes to change cars every 3 to 4 years. His local hyundai salesman advised that the most deposit he should put down would be at 20%. (That's assuming he wished to have enough equity in 3 years to upgrade to the new model). I wonder if most salesmen are giving the same advise to prospective new car buyers that are thinking of pcp?

Soarer

dissed doc wrote: »

PCP is a pretty decent way to buy a nice new car, for those that can afford it but without making huge monthly finance payments or spending loads of cash savings. With interest so low, sometimes 0%, it makes a lot of sense.

But that's the crux of the matter.

Obviously everyone isn't as clued in as Mr. Enda, and so sign up for these things without reading through the small print.
They see the headline figure and are blinded by that.
They pay their deposit, pay the monthly repayments, and then in 3 years' time realise they still have to stump up another €10k+ at the end...which they haven't been saving for as they thought the GMFV was equity they can use against the next car!
Or they missed a service, so they're penalised.
Or they're gone over the mileage, so they're penalised.
Or someone crashes into them, the car is repaired, but they're penalised because the car is worth less now.

I'm sure, in an ideal world, PCP, especially at 0%, makes a lot of sense for some people. But to my mind, there are far too many factors to be considered that can potentially cause you grief.

dissed doc wrote: »

Maybe there are people who think they can own a 35K car by paying 10K + 36 payments of 250 each or something but that is just being an idiot.

Too bloody right there are.

It wasn't that long ago that people remortgaged their houses to buy a car because it was "cheap money".

Soarer

opinionated3 wrote: »

Buddy of mine was interested in buying a new high spec tuscon. He wasn't sure if he wanted a regular bank loan or to go down the pcp route as he likes to change cars every 3 to 4 years. His local hyundai salesman advised that the most deposit he should put down would be at 20%. (That's assuming he wished to have enough equity in 3 years to upgrade to the new model). I wonder if most salesmen are giving the same advise to prospective new car buyers that are thinking of pcp?

Is he going to want another Hyundai?

A regular bank loan gives you a lot more freedom than a PCP arrangement.

Crocked

Why anyone would decide to pay cash in full upfront or pay a higher interest rate to their bank instead of a 0% PCP rate is baffling.

Do people honestly think the car companies are out to get you by giving you a loan at no or negligible interest.

It's not a scam, there's no hidden costs. It's very easy to compare the total cost of credit for a PCP deal and a traditional bank loan.

Crocked

Soarer wrote: »

Is he going to want another Hyundai?

A regular bank loan gives you a lot more freedom than a PCP arrangement.

No it doesn't, Where or what brand you buy next is irrelevant to the PCP agreement.

EndaHonesty

Crocked wrote: »

No it doesn't, Where or what brand you buy next is irrelevant to the PCP agreement.

Another two for the list;

Soarer thinks you are tied to a particular brand when you take out a PCP.
Ridiculous.

Soarer thinks a bank loan has more freedom than a PCP.
Ridiculous.

Jack lemmon

EndaHonesty wrote: »

Another two for the list;

Soarer thinks you are tied to a particular brand when you take out a PCP.
Ridiculous.

Soarer thinks a bank loan has more freedom than a PCP.
Ridiculous.

It's infuriating to read all these misinformed comments. I suggest ppl go read a pcp contract as I have to see the true facts and make their own mind up. It's all written in black and white and all above board. Its the cheapest way to finance a new car once you can afford to pay a smaller deposit and higher monthlys as there would be at least 15% equity in the car after 3yrs for the next deposit.

grogi

Jack lemmon wrote: »

It's infuriating to read all these misinformed comments. I suggest ppl go read a pcp contract as I have to see the true facts and make their own mind up. It's all written in black and white and all above board. Its the cheapest way to finance a new car once you can afford to pay a smaller deposit and higher monthlys as there would be at least 15% equity in the car after 3yrs for the next deposit.

Once you read it, understand it and analyse the implications - sure, make the decision. If you can afford a car - a PCP is a great way of not spending everything at the beginning. If I had cash and wanted to buy a car, I could spend that cash to overpay my mortgage and be better off for instance.

But there are risks with it, especially for people to whom this is the only way to get a new car. What happens when the car is totalled? Or when the market gets much cheaper (the second hand market is very expensive now - but with more and more people buying new cars today, the supply base will be much bigger in a few years).

PCP is not built to give away cars. It is designed to appear more affordable than it actually is (look, a new car for only €69/week!).

Majority does not understand the risks - that's the human nature, people tend to hope the bad does not happen. But they sometimes happen and hurt big time...

Jack lemmon

grogi wrote: »

Once you read it, understand it and analyse the implications - sure, make the decision. If you can afford a car - a PCP is a great way of not spending everything at the beginning. If I had cash and wanted to buy a car, I could spend that cash to overpay my mortgage and be better off for instance.

But there are risks with it, especially for people to whom this is the only way to get a new car. What happens when the car is totalled? Or when the market gets much cheaper (the second hand market is very expensive now - but with more and more people buying new cars today, the supply base will be much bigger in a few years).

PCP is not built to give away cars. It is designed to appear more affordable than it actually is (look, a new car for only €69/week!).

Majority does not understand the risks - that's the human nature, people tend to hope the bad does not happen. But they sometimes happen and hurt big time...

Yes if you pay the max deposit and have low monthlys then there's no way you'll get 30% equity after 3 yrs and will have to back the deposit to keep the payments the same.
If it wasn't as viable at the end of the term as you've predicted then I'd just finance the final payment and continue owning the car I know has been cared for correctly.

EndaHonesty

grogi wrote: »

But there are risks with it, especially for people to whom this is the only way to get a new car. What happens when the car is totalled? Or when the market gets much cheaper (the second hand market is very expensive now - but with more and more people buying new cars today, the supply base will be much bigger in a few years).

The risks are the same for whatever method you use to buy the car.

Why do you think there is a difference because one has used PCP?

opinionated3

Soarer wrote: »

Is he going to want another Hyundai?

A regular bank loan gives you a lot more freedom than a PCP arrangement.

For a finish he just went with a regular bank loan. What swayed it for him was the penalties for excess mileage. And to answer your question; more than likely. ....this is his 3rd new hyundai....he's happy out with them

Soarer

opinionated3 wrote: »

For a finish he just went with a regular bank loan. What swayed it for him was the penalties for excess mileage. And to answer your question; more than likely. ....this is his 3rd new hyundai....he's happy out with them

What??

You mean someone bought a car NOT using PCP????

There must be something wrong with your friend. I'd cut him loose straight away. Can't be associating with dem types!

Congrats to your friend btw.

@Enda: That's the extra "freedom" I was talking about with a bank loan. Not financial freedom. Toenails.

fits

We were looking at the PCP option recently. For the vehicle I looked at I was being quoted 5.9 % interest. The cost of credit was adding up to something like 5000 euro over the three year term, and then you would have to probably refinance(and pay more interest on the balance) or enter into another deal where you are also paying interest and never actually own anything at the end of it. So while the monthly repayments were affordable enough, the whole thing was masking massive interest payments, in my opinion.

It might be a worthwhile option if the interest rate is low, and you are happy to change after three years (who knows what deal will be available then). I thought hire purchase would be a better option for us. But eventually we just decided to buy an older car outright and not be worrying about interest payments or financing.

SK1979

Does anyone know whether its possible to change the debiting bank account for a PCP loan?

I'm currently paying back a PCP loan to Volkswagen bank but like to change it so that the repayments come out of someones elses account.

Does anyone know if this is possible?

Thanks in advance.

Lantus

PCP is just one option and one possible way to purchase a car. It won't suit everyone and no one would expect it to.

Loans from banks and credit unions and regular car finance are all perfectly valid options.

You also need to factor in the car, and the financial ability of the purchaser.

PCP is a little like most mobile phone purchases. You enter a 2 + year contract making regular payments on a new expensive phone. After the contract term your encouraged to upgrade to another new phone. No one blinks an eye at that.

I got my new skoda at zero interest and traded in my old and becoming very expensive 15 year old car to get the minimum deposit possible. I pay 230 a month for total security, lower fuel, tax and insurance and pure comfort and indulgence. I spend 2+ hours a day driving so its worth it.

If I was going 2nd hand which I investigated thoroughly I would of had 12k loan and the total cost over 3 years was much more. Also the 2nd hand market is dire with limited choice and poor value for money to match. When you factor in 3 years depreciation I'm back to owning an old car worth very little with the risk of expensive mechanical issues, higher insurance and tax and fuel bills.

So look at the whole picture, come at from every single and compare all your costs to see what suits you best.

jca

Lantus wrote: »

PCP is just one option and one possible way to purchase a car. It won't suit everyone and no one would expect it to.

Loans from banks and credit unions and regular car finance are all perfectly valid options.

You also need to factor in the car, and the financial ability of the purchaser.

PCP is a little like most mobile phone purchases. You enter a 2 + year contract making regular payments on a new expensive phone. After the contract term your encouraged to upgrade to another new phone. No one blinks an eye at that.

I got my new skoda at zero interest and traded in my old and becoming very expensive 15 year old car to get the minimum deposit possible. I pay 230 a month for total security, lower fuel, tax and insurance and pure comfort and indulgence. I spend 2+ hours a day driving so its worth it.

If I was going 2nd hand which I investigated thoroughly I would of had 12k loan and the total cost over 3 years was much more. Also the 2nd hand market is dire with limited choice and poor value for money to match. When you factor in 3 years depreciation I'm back to owning an old car worth very little with the risk of expensive mechanical issues, higher insurance and tax and fuel bills.

So look at the whole picture, come at from every single and compare all your costs to see what suits you best.

At least with a mobile phone contract at the end of two years you don't have a huge balloon payment waiting for you. Also there's plenty of equity in a two year old good brand phone.

EndaHonesty

jca wrote: »

Also there's plenty of equity in a two year old good brand phone.

:rolleyes:

All in all

Lantus wrote: »

PCP is just one option and one possible way to purchase a car. It won't suit everyone and no one would expect it to.

Loans from banks and credit unions and regular car finance are all perfectly valid options.

You also need to factor in the car, and the financial ability of the purchaser.

PCP is a little like most mobile phone purchases. You enter a 2 + year contract making regular payments on a new expensive phone. After the contract term your encouraged to upgrade to another new phone. No one blinks an eye at that.

I got my new skoda at zero interest and traded in my old and becoming very expensive 15 year old car to get the minimum deposit possible. I pay 230 a month for total security, lower fuel, tax and insurance and pure comfort and indulgence. I spend 2+ hours a day driving so its worth it.

If I was going 2nd hand which I investigated thoroughly I would of had 12k loan and the total cost over 3 years was much more. Also the 2nd hand market is dire with limited choice and poor value for money to match. When you factor in 3 years depreciation I'm back to owning an old car worth very little with the risk of expensive mechanical issues, higher insurance and tax and fuel bills.

So look at the whole picture, come at from every single and compare all your costs to see what suits you best.

The difference with your €12k second hand car is at the end of 3 years you have an asset - worth possibly €5-7k.

At the end of your 3 years PCP you don't have a lot and have another decision to make - sign up to a further contract and another 3 year commitment, finance/pay the balance or return the car.

But agreed, people need to make up there own minds and decide what is best for them.

dissed doc

All in all wrote: »

The difference with your €12k second hand car is at the end of 3 years you have an asset - worth possibly €5-7k.

At the end of your 3 years PCP you don't have a lot and have another decision to make - sign up to a further contract and another 3 year commitment, finance/pay the balance or return the car.

But agreed, people need to make up there own minds and decide what is best for them.

The issue I think is people thinking that they can get something for nothing.

If you can afford to pay max 12k for a car over three years and want own at three years, then buy a 12k car. Don't buy a 35k car.

The three years is of no consequence. You can change your car whenever you want. If you want to get rid of it (and pay for the privilege) it is an easy way for people who like to have "new"-ish cars to keep up to date.

If you have only paid 20k of a 35k car in three years, well, you don't own it or have an asset because you still haven't paid for it!!

If you want to own the car completely at 12 months, pay all 12k for the 12k car, or pay 35k for the 35k car.

If you want a 35k car and want to own it in three years, you need to pay 35k!!!