PCP finance.

lawred2

grogi wrote: »

No, it is not.

The deposit is formed from the difference between the value of the car you are returning (or how much the dealer wants to pay for it) and the money you still owe (also called Guaranteed Future Value).

actually rethinking this - the car surely serves as the vast majority of the next deposit surely provided you've stuck to all the T&Cs??

After 3 years say - your initial deposit + finance payments will probably equate to about 2/3 equity in the car.

The GFV is usually 1/3 of sale price judging by the brochures I saw...

So that roughly leaves you with a third for a deposit give or take a few thousand..

I haven't given this much thought so I've probably got that wrong

grogi

lawred2 wrote: »

actually rethinking this - the car surely serves as the vast majority of the next deposit surely provided you've stuck to all the T&Cs??

After 3 years say - your initial deposit + finance payments will probably equate to about 2/3 equity in the car.

The GFV is usually 1/3 of sale price judging by the brochures I saw...

So that roughly leaves you with a third for a deposit give or take a few thousand..

I haven't given this much thought so I've probably got that wrong

In the typical scenario, the payments are calculated to give you a minimal deposit after three years.

€30k car now, after three years: market value €16k, GMFV €13k... That will give €3k of equity at the end of the PCP that can be used as a deposit for next finance deal.

Toyotafanboi

lawred2 wrote: »

The GFV is usually 1/3 of sale price judging by the brochures I saw...

So that roughly leaves you with a third for a deposit give or take a few thousand..

The thing is you don't own that final GMFV 1/3 to use as a deposit.

What you can use as a deposit is any positive equity between the GMFV and the cars actual value in 3 years time.

lawred2

Toyotafanboi wrote: »

The thing is you don't own that final GMFV 1/3 to use as a deposit.

What you can use as a deposit is any positive equity between the GMFV and the cars actual value in 3 years time.

well no - I was thinking

equity less GFMV should equal a third

but apparently that's not likely

lawred2

grogi wrote: »

In the typical scenario, the payments are calculated to give you a minimal deposit after three years.

€30k car now, after three years: market value €16k, GMFV €13k... That will give €3k of equity at the end of the PCP that can be used as a deposit for next finance deal.

christ

I'll stick to doing what I'm doing

acronym Chilli

lawred2 wrote: »

well no - I was thinking

equity less GFMV should equal a third

but apparently that's not likely

Absolutely. In fact it's very unlikely in most cases, since GFMV generally is about a third of the new price of the car.
If the initial deposit is small, and repayments are large, you can structure it to make it work out a bit better though (better in the sense of more sustainable deposit to try to roll it over again with consistent monthly repayment levels).

The "guarantee" in GFMV is that IF you keep to certain conditions (mileage, condition, etc.,) around how you run the car, then they'll guarantee to take the car back from you in full and final settlement of the PCP arrangement after 3 years and let you walk away: debt-free, and car-free (and perhaps equity free). If the car is worth more on the open market, then you can pocket the difference (or put it towards a new car).
If you've exceeded mileage limits, then they could ask for extra money even at that stage to allow you to walk away (car-less)

It IS confusing in my opinon, in how it's communicated, the terminology, and how it's clarified or not (although if you see it worked out on a piece of paper or spreadsheet it's of course very straight-forward)

Soarer

acronym Chilli wrote: »

It IS confusing in my opinon, in how it's communicated, the terminology, and how it's clarified or not (although if you see it worked out on a piece of paper or spreadsheet it's of course very straight-forward)

Especially when you see the Renault fella on the previous page saying you only pay interest on the purchase price less GFMV.

Summer wind

acronym Chilli wrote: »

Absolutely. In fact it's very unlikely in most cases, since GFMV generally is about a third of the new price of the car.
If the initial deposit is small, and repayments are large, you can structure it to make it work out a bit better though (better in the sense of more sustainable deposit to try to roll it over again with consistent monthly repayment levels).

The "guarantee" in GFMV is that IF you keep to certain conditions (mileage, condition, etc.,) around how you run the car, then they'll guarantee to take the car back from you in full and final settlement of the PCP arrangement after 3 years and let you walk away: debt-free, and car-free (and perhaps equity free). If the car is worth more on the open market, then you can pocket the difference (or put it towards a new car).
If you've exceeded mileage limits, then they could ask for extra money even at that stage to allow you to walk away (car-less)



I didn't know you could pocket the difference. I thought the dealer kept all the money unless you were entering another pcp deal.

grogi

Summer wind wrote: »

I didn't know you could pocket the difference. I thought the dealer kept all the money unless you were entering another pcp deal.

The dealer will give you crappy enough price not to go this route anyway.

mickdw

Pcp isn't magic but can be a useful way to buy.
If you want to be able to roll over to a new car every 3 years without coming up with a ball of cash for deposit each time, you need to be able to afford the monthly payment when you have only put in about 15 percent deposit.
If you are happy with the monthly following a 15 percent deposit, there is an excellent chance of being able to jump into a new car again and having a 15 percent deposit from the equity in the old car.
If on the other hand, you are putting in 30 percent deposit from a car you now fully own and are just about able to afford the monthly payment, it is pretty clear that you cannot afford the car.

acronym Chilli

grogi wrote: »

The dealer will give you crappy enough price not to go this route anyway.

That gets to the nub of why I'm fundamentally suspicious of PCP: the transaction becomes more complex, and by default all of it is with the same counterparty: you buy car from a vendor, you buy finance from same vendor, and you sell car at end to same vendor. It makes it harder to work out where they are making the money (e.g. maybe finance is cheap @ 0%, but they make money on car by giving limited discounts).

Worst case, if you want to pocket difference at end: pay the lump sum in cash, then take the car and put it on the private market and sell for hopefully a larger amount of cash.

lawred2

acronym Chilli wrote: »

That gets to the nub of why I'm fundamentally suspicious of PCP: the transaction becomes more complex, and by default all of it is with the same counterparty: you buy car from a vendor, you buy finance from same vendor, and you sell car at end to same vendor. It makes it harder to work out where they are making the money (e.g. maybe finance is cheap @ 0%, but they make money on car by giving limited discounts).

Worst case, if you want to pocket difference at end: pay the lump sum in cash, then take the car and put it on the private market and sell for hopefully a larger amount of cash.

the finance cost is definitely sunk into the car upfront... 0% interest is a marketing ploy.

All in all

acronym Chilli wrote: »

That gets to the nub of why I'm fundamentally suspicious of PCP: the transaction becomes more complex, and by default all of it is with the same counterparty: you buy car from a vendor, you buy finance from same vendor, and you sell car at end to same vendor. It makes it harder to work out where they are making the money (e.g. maybe finance is cheap @ 0%, but they make money on car by giving limited discounts).

Worst case, if you want to pocket difference at end: pay the lump sum in cash, then take the car and put it on the private market and sell for hopefully a larger amount of cash.

You don't need to trade the car back to the same vendor, you can go to any marque and they will settle the finance (providing the trade in value is higher than the finance outstanding).

mickdw

lawred2 wrote: »

the finance cost is definitely sunk into the car upfront... 0% interest is a marketing ploy.

Fair comment. There is no free money but the way vw offer it, they appear to use the zero percent as a method of pushing higher spec. Sure, they have great margin on the spec bits but comparing confortline versus highline on a vw, it seems that the distributor is at least foregoing some of the profit on the higher model by offering zero percent.

NIMAN

I'm thinking more about changing from my 13 to a 15, paying cash to change.

30k is a lot of money for a Golf.

vintagevrs

That's a smarter choice imo. The golf is due a facelift very soon so a new one now or even Jan 17 will be soon out of date as this will impact it's residuals compared with buying earlier in the model cycle. If your paying cash you are not gaining anything with the 0% interest. Only if your alternative was a 8% loan then that might make the brand new option more appealing imo.

bazz26

The other thing to weigh up with waiting for the facelift model is VW may trim back on the spec. You might not get the same spec that is standard on the Highline now come Jan with the facelift.

Zurbaran

Can't see the current Golf losing much value or losing much spec with the face lift. It wont be much different to what's sold right now.

Giacomo McGubbin

Can't understand why anyone would want to pay 30k for a Golf. A small boring expensive car by today's standards.

Brian Scan

Giacomo McGubbin wrote: »

Audi's have been skangermobilles for quite some time.

They worked out they make a lot more money that way though.

Giacomo McGubbin wrote: »

Maybe 20 years ago, nowadays it's skangers that can manage to get a finance company to take them on for a new audi, or if they get refused persuade some other firm to finance a passat for them. Audi and VW know what they are doing though, they sell far more catering for that market than they ever did for their old demographic.

Giacomo McGubbin wrote: »

If you hold onto it for just a couple more years you'll be past the skanger phase with that age

Giacomo McGubbin wrote: »

Might be better, you don't want to look like a wanna be

Giacomo McGubbin wrote: »

Audi's once used to be subtle and have class, but didnn't sell that well.
Now they just look obnoxious, shout small mickey syndrome, and are as common as muck, making audi a fortune. Audi know their market now

Giacomo McGubbin wrote: »

Can't understand why anyone would want to pay 30k for a Golf. A small boring expensive car by today's standards.

Presumably you are more of a fan of cars from Trollhattan.

bidiots

Giacomo McGubbin

Oh dear, have I upset the VAG fanboys. Notice, no explanation of why anyone would borrow 30,000 euros for a small boring over expensive car.

Brian Scan

Giacomo McGubbin wrote: »

Oh dear, have I upset the VAG fanboys. Notice, no explanation of why anyone would borrow 30,000 euros for a small boring over expensive car.

I presume anyone considering doing this doesn't feel the need to explain anything to you.

markad1

Giacomo McGubbin wrote: »

Oh dear, have I upset the VAG fanboys. Notice, no explanation of why anyone would borrow 30,000 euros for a small boring over expensive car.

Because it's the car I wanted with the spec I wanted....simples:)

Giacomo McGubbin

Brian Scan wrote: »

I presume anyone considering doing this doesn't feel the need to explain anything to you.

or rather they haven't got a credible one.

NIMAN

Giacomo McGubbin wrote: »

Brian Scan wrote: »

I presume anyone considering doing this doesn't feel the need to explain anything to you.

or rather they haven't got a credible one.

What car would you advise me to trade to?

jca

NIMAN wrote: »

What car would you advise me to trade to?

A corolla terra of course, value for money lad, value for money. Shur dem fancy alloy wheels and 'lectric windows are nothing but trouble in 15 years time. Heaven forbid you might buy a car for enjoyment...

Toyotafanboi

Giacomo McGubbin wrote: »

or rather they haven't got a credible one.

I shouldn't take the bait, but, with the deals VW are doing at the minute, a Highline Golf is in the same price ballpark as a Focus Titanium or an Astra SRi and the Golf is a far superior feeling car and has a better spec at that level than either of these, just as examples.

It'd be well known on here that i'm no VW fanboi and certainly not a condoner of buying a Golf as the default mid sized car, but at the moment, in that segment they are the best value for money imo.

Nonoperational

Toyotafanboi wrote: »

I shouldn't take the bait, but, with the deals VW are doing at the minute, a Highline Golf is in the same price ballpark as a Focus Titanium or an Astra SRi and the Golf is a far superior feeling car and has a better spec at that level than either of these, just as examples.

It'd be well known on here that i'm no VW fanboi and certainly not a condoner of buying a Golf as the default mid sized car, but at the moment, in that segment they are the best value for money imo.

:eek::eek::eek::eek:

I think I need to sit down! (Nice Golf by the way)

rob316

Thanks to everyone that contributed to this thread, been very helpful reading bits of it.

2008 Picanto, ticking over fine but I will never hold onto a car coming up to 10 years old, size wise we have outgrown it too.

I think a PCP deal will suit me, money up front wise I'm cleaned out at present but I can easily make the monthly payments. I was looking at a Qashqai, scrappage of 4k for my old 2008 Picanto which is more than its worth and I have a few grand to add to that if needs be.

My question is am I better just to use the scrappage as the deposit or should I add more or does it make any difference.

What are people's experiences of PCP, have they ended the agreement in positive equity giving enough for a 10% deposit for the next car?

Also as its nearly October am I better to hold off till 17?

bazz26

I'd be holding off for a 17 reg car at this stage of the year to be honest.

I'd also look at doing some maths around what you can sell the Picanto for privately along with a cash discount off the new car. Looking at these examples on dondeal it could be worth between 2500 and 3000 privately unless it's a shed on it's last legs:

https://www.donedeal.ie/cars-for-sale/kia-picanto-1-0/13412906
https://www.donedeal.ie/cars-for-sale/08-kia-picanto/13388667

It may not be worth your while but at least tot up some sums first.

GavMan

bazz26 wrote: »

I'd be holding off for a 17 reg car at this stage of the year to be honest.

I'd also look at doing some maths around what you can sell the Picanto for privately along with a cash discount off the new car. Looking at these examples on dondeal it could be worth between 2500 and 3000 privately unless it's a shed on it's last legs:

https://www.donedeal.ie/cars-for-sale/kia-picanto-1-0/13412906
https://www.donedeal.ie/cars-for-sale/08-kia-picanto/13388667

It may not be worth your while but at least tot up some sums first.

If he gets 3k for the picanto, how much is he likely to get off the list for cash? 2k maybe? Can't see him getting more unless he takes a 162 from stock. Presuming he can shift the picanto fast which might be easier said than done. For the sake of 1k, it might be easier all round to take the 4k offer. You could be lucky and work another 1k off the price of get some options added for 1k.

Turn up with a quote for a Tucson and he might bend for the business

grogi

GavMan wrote: »

If he gets 3k for the picanto, how much is he likely to get off the list for cash? 2k maybe? Can't see him getting more unless he takes a 162 from stock. Presuming he can shift the picanto fast which might be easier said than done. For the sake of 1k, it might be easier all round to take the 4k offer. You could be lucky and work another 1k off the price of get some options added for 1k.

Turn up with a quote for a Tucson and he might bend for the business

Sir, you must be very well-off to give away one grand.

I know - relativity. Collecting Tesco coupons to save a few euros here and there, but letting €1000 go when buying a car... But money does not know where it was saved

bazz26

I couldn't imagine a Picanto being too difficult to shift unless its in bits. Its small, relatively reliable and a cheap runabout ideal for a first time buyer or driver. As I said do some maths first, some of these scrappage deals may only work out better if you have an old car on it's last legs with a low resale value.

rob316

It's running fine but its not the cleanest inside and the body while straight is a small bit rough, it was her learner car so it took the scrapes and scratches. Don't see myself getting much more than 3.5k privately so 4k scrappage is probably better value.

grogi

rob316 wrote: »

It's running fine but its not the cleanest inside and the body while straight is a small bit rough, it was her learner car so it took the scrapes and scratches. Don't see myself getting much more than 3.5k privately so 4k scrappage is probably better value.

It is definitely easier.

bazz26

rob316 wrote: »

It's running fine but its not the cleanest inside and the body while straight is a small bit rough, it was her learner car so it took the scrapes and scratches. Don't see myself getting much more than 3.5k privately so 4k scrappage is probably better value.

Don't forget if your buying with no trade-in/scrappage then you will still be able to negotiate a discount off the new car. So selling your own car privately and buying the new car with a straight deal discount could end up saving more than the 4k scrappage on offer. However if the body is rough as you say then you would probably be looking at closer to 2k or less privately, so it probably works out better to just to go with the scrappage deal in this case.

acronym Chilli

grogi wrote: »

Sir, you must be very well-off to give away one grand.

I know - relativity. Collecting Tesco coupons to save a few euros here and there, but letting €1000 go when buying a car... But money does not know where it was saved

Was in a marketing class, and we'd all filled in a questionnaire. Randomly, half people got one version of questions other half got a different version.

A) You're in a shop looking at a nice watch-strap. It's €25, but you look online and discover another shop that's 8 mins walk away where you can get the exact same one for €15. Do you buy here or go to the other shop?

You're in a shop looking at a nice watch. It's €970, but you look online and discover another shop that's 8 mins walk away where you can get it for €960. Do you buy here or go to the other shop?

Both questions are equivalent to the following: "will you walk 8 minutes for €10?", but you get a different balance of answers from the second question to the first.

FrontDoor

acronym Chilli wrote: »

Was in a marketing class, and we'd all filled in a questionnaire. Randomly, half people got one version of questions other half got a different version.

A) You're in a shop looking at a nice watch-strap. It's €25, but you look online and discover another shop that's 8 mins walk away where you can get the exact same one for €15. Do you buy here or go to the other shop?

You're in a shop looking at a nice watch. It's €970, but you look online and discover another shop that's 8 mins walk away where you can get it for €960. Do you buy here or go to the other shop?

Both questions are equivalent to the following: "will you walk 8 minutes for €10?", but you get a different balance of answers from the second question to the first.

Its a very common behavioural thing, best summed up as penny wise, pound foolish.

Most often seen in car and house purchases.

People think nothing of 3-4k of extras on a car, or indeed an 800 quid hitch. Or putting an extra 10k on a house bid.

Often, the same people might baulk at 100 quid on a pair of shoes over an 80 quid pair.

Lantus

rob316 wrote: »

Thanks to everyone that contributed to this thread, been very helpful reading bits of it.

2008 Picanto, ticking over fine but I will never hold onto a car coming up to 10 years old, size wise we have outgrown it too.

I think a PCP deal will suit me, money up front wise I'm cleaned out at present but I can easily make the monthly payments. I was looking at a Qashqai, scrappage of 4k for my old 2008 Picanto which is more than its worth and I have a few grand to add to that if needs be.

My question is am I better just to use the scrappage as the deposit or should I add more or does it make any difference.

What are people's experiences of PCP, have they ended the agreement in positive equity giving enough for a 10% deposit for the next car?

Also as its nearly October am I better to hold off till 17?

Deposit does make a difference. Your giving the dealer more money up front with a high deposit. That will reduce your monthly payments. At 4 k scrappage as deposit you should expect 4k equity after 3 years. If you front load the deposit to say 7k your equity after 3 years will still be 4 k. The higher deposit makes the monthly look good but if your deposit exceeds the equity you will need to throw more up front cash to keep them low.

A higher deposit may improve your interest repayments. But generally the lower deposit gives a more realistic long term payment structure.

tomaso11

Are there any deals on PCP for used cars? 2-3 year old max, I see that Windsor are doing a 161 offer on Nissans atm https://www.windsor.ie/special_offer_details.aspx?so=181

ofcork

Seems some dealers are doing pcp on used finbarr galvin in cork being one.

mickdw

ofcork wrote: »

Seems some dealers are doing pcp on used finbarr galvin in cork being one.

Audi are doing pcp on used but not too old.

rob316

Hardly worth your while doing PCP on used is it? Very little equity I'd imagine left over.

tomaso11

rob316 wrote: »

Hardly worth your while doing PCP on used is it? Very little equity I'd imagine left over.

I'd say it would be but only if you plan to keep the car

grogi

rob316 wrote: »

Hardly worth your while doing PCP on used is it? Very little equity I'd imagine left over.

What's the freaking difference between financing new Renault for €25k or a 2-year-old audi for €25k?

With similar deposit, similar monthly payments - after three years the value would be more-less the same, thus similar equity...

jca

grogi wrote: »

What's the freaking difference between financing new Renault for €25k or a 2-year-old audi for €25k?

With similar deposit, similar monthly payments - after three years the value would be more-less the same, thus similar equity...

The rate of depreciation on a Renault would be a lot higher than any Audi.

rob316

ok I'm going for the tucson. price agreed and pcp approved the only thing that is stopping me pulling the trigger is the time of the year. Like should I wait till January or would I get a better deal on a 162 in December? or does it make much of a difference if I buy tomorrow.

ROVER

rob316 wrote: »

ok I'm going for the tucson. price agreed and pcp approved the only thing that is stopping me pulling the trigger is the time of the year. Like should I wait till January or would I get a better deal on a 162 in December? or does it make much of a difference if I buy tomorrow.

I got a Tucson last week on PCP had same dilemma. Dealer offered thousands more on trade in than other Hyundai dealers. Was worried if I went back in Jan the trade in value would be reduced to what other dealers offered. I feel in three years time I will have to pay off the outstanding other wise I will be buying a very late 2019 car.

FrontDoor

ROVER wrote: »

I got a Tucson last week on PCP had same dilemma. Dealer offered thousands more on trade in than other Hyundai dealers. Was worried if I went back in Jan the trade in value would be reduced to what other dealers offered. I feel in three years time I will have to pay off the outstanding other wise I will be buying a very late 2019 car.

I don't know is the annual plate as big a deal with the 6 mth intervals.

Are you looking at a wait of a couple of months anyway?