PCP finance.

Lantus

grogi wrote: »

Great motor... Me is envious

I think you should go for it, it seems you definitely can afford it and are sensible about it

I think you're still too optimistic about the future value, hope I am wrong. Just answer this question to yourself: would you pay €24000 cash for a 3 year old vRS, just out of the warranty, when you can have a brand new for €37k (with 0% PCP).

The new Octavia in April will attract the 3.9% interest rate so now is a good time to buy. The additional cost of credit will stabilise re sale rates as the new ones become more expensive.

We are trading in a 3 year pcp now for an Octavia on zero. Possible intention to keep. They are good solid cars with excellent resale values so no real worries.

ShadowHearth

Lantus wrote: »

The new Octavia in April will attract the 3.9% interest rate so now is a good time to buy. The additional cost of credit will stabilise re sale rates as the new ones become more expensive.

We are trading in a 3 year pcp now for an Octavia on zero. Possible intention to keep. They are good solid cars with excellent resale values so no real worries.

New face lofted Octavia can only attract a paper bag. :pac:

I love current shape, but i just wouldn't touch the one that's coming out next year. It looks like skoda somehow manages to make great looking cars, but only every second generation lol.

jca

ShadowHearth wrote: »

New face lofted Octavia can only attract a paper bag. :pac:

I love current shape, but i just wouldn't touch the one that's coming out next year. It looks like skoda somehow manages to make great looking cars, but only every second generation lol.

It doesn't look that different really. I'm struggling with the mk3 anyway, the back is terrible it always looks like it's had a rear end shunt. I hoped they were going to soften that crease across the back. There's no doubt that from a pcp point of view they're one of the safest bets out there.

Micky 32

Is it easy enough to get approved for a PCP without the rubber glove treatment? I had a hp from VW Bank with no probs..

Ryath

Micky 32 wrote: »

Is it easy enough to get approved for a PCP without the rubber glove treatment? I had a hp from VW Bank with no probs..

Not a whole lot to it just provide earnings and bank details. If you got a HP from VW Bank you should have no problems with PCP. You probably would even be approved straight away. Sales man commented when we applying that if you had applied previously they do approve some people instantly. It usually just takes a few hours for approval. Just had supply ID and proof of address then when signing the paperwork.

ShadowHearth

Ryath wrote: »

Not a whole lot to it just provide earnings and bank details. If you got a HP from VW Bank you should have no problems with PCP. You probably would even be approved straight away. Sales man commented when we applying that if you had applied previously they do approve some people instantly. It usually just takes a few hours for approval. Just had supply ID and proof of address then when signing the paperwork.

What they need to prove earnings?
And is there an issue if I got second bank account for my savings where majority of my money is. Would it be linked to my main bank account? ( sorry, a bit off topic, but I never had done such things with dealers))

sillysocks

Micky 32 wrote: »

Is it easy enough to get approved for a PCP without the rubber glove treatment? I had a hp from VW Bank with no probs..

I couldn't believe how easily I was approved for PCP. It might depend on who the finance company are but I literally told them my salary, didn't provide any proof, had only been in the job 8 months which I told them and didn't even get asked to provide bank statements. I guess they own the car until the term is finished so maybe it's becaue it'd be easy enough for them to take the car back if you defaulted but I still was surprised how easily they approved me (on over 20k of finance).

Micky 32

ShadowHearth wrote: »

What they need to prove earnings?
And is there an issue if I got second bank account for my savings where majority of my money is. Would it be linked to my main bank account? ( sorry, a bit off topic, but I never had done such things with dealers))

I remember when i applied for the HP with VW bank 3 years ago. I didn't have to provide anything ( just ID) they just asked what i earned ( i work for myself so earnings can vary week to week) and typed it in and i got approved next day. I did put a big deposit down( more than 50%) and i know i have a good credit history.

air

It's no more risk than a rental car company runs when they give you the keys really.

Micky 32

What if someone had 3-4 payments left on an existing vw bank hp loan could one just pay that off and settle and then re apply for a new car? Would there be a huge extra cost to settle that little bit earlier?

mickdw

Micky 32 wrote: »

What if someone had 3-4 payments left on an existing vw bank hp loan could one just pay that off and settle and then re apply for a new car? Would there be a huge extra cost to settle that little bit earlier?

Bread and butter stuff for dealer.
Basically they get your settlement figure on outstanding loan.
Value your trade in.
Deduct settlement amount. This is your deposit.
If you go ahead, they then settle the outstanding money and set up new finance deal.
you could equally just settle it yourself. If you intended selling private, that would be the way to go.

Lantus

Average time of a PcP deal is 26 months. You can trade up any time. A lot of people get ongoing valuations and weigh up the best time to refinance subject to mileage, deals etc.

Think of the 3 years as the maximum.

Micky 32

I payed off the small remaining VW Bank HP (not PCP) on my 3 year old Passat last week. So i went in to order a new 2.0 BiTDI Passat and applied for a PCP. It approved straight away on the computer because i was on the system from the last loan, very handy. Got it for 1.9% apr too..Also you still get your straight deal discount on pcp.

carsfan2

Did you trade in the Passat against the new one?
I can't imagine there's too many biturbo Passats on the road.
I imagine it's quick. Does it have 4 wheel drive?

Micky 32

carsfan2 wrote: »

Did you trade in the Passat against the new one?
I can't imagine there's too many biturbo Passats on the road.
I imagine it's quick. Does it have 4 wheel drive?

Yeah , they are 240bhp 4 motion DSG bit of a sleeper 0-100kmhr 6.1 secs 240 km/hr top end. No buying off dealer straight , selling private. I'm in no rush to sell mine anyway, 12 week wait factory order.

carsfan2

I thought VW were doing 0% on the passat.
sounds like a lovely car though. Will it not be a heavy depreciator though?

Micky 32

carsfan2 wrote: »

I thought VW were doing 0% on the passat.
sounds like a lovely car though. Will it not be a heavy depreciator though?

Unfortunately you'll find there's always a bit of a catch with 0%. Factory orders don't qualify for the 0% only stock available cars in the country and also have to be registered by end of january. My car won't arrive until Feb/March...

Yep it will probably depreciate a bit but it's a quick car and i'm keeping this car for a bit longer than usual. Also it won't be siting in the driveway. It's being used for work so the car is creating my income so it's not all bad.

carsfan2

1.9 per cent is still excellent with a good discount too sounds great deal.
Enjoy.

Jack lemmon

Micky 32 wrote: »

Unfortunately you'll find there's always a bit of a catch with 0%. Factory orders don't qualify for the 0% only stock available cars in the country and also have to be registered by end of january. My car won't arrive until Feb/March...

Yep it will probably depreciate a bit but it's a quick car and i'm keeping this car for a bit longer than usual. Also it won't be siting in the driveway. It's being used for work so the car is creating my income so it's not all bad.

I bought a factory ordered VW in early May it arrived mid July and I got 0% pcp. Interesting if they've now changed the T&C!

Micky 32

Jack lemmon wrote: »

I bought a factory ordered VW in early May it arrived mid July and I got 0% pcp. Interesting if they've now changed the T&C!

If it ran into August you might not have got the 0%. According to the VW website "0% PCP offer applies to Passat highline and highline business edition stock orders only , ordered before Dec 31st and registered before Jan 31st" Still 1.9% is excellent value..

It's hard to know what's clear because it also states the 399 euro upgrade pack is free if ordered before Dec 31st on stock orders but i got mine free when i ordered my factory order yesterday..

duffer247

First time buyer (of new car) here.
I'm looking at a Hyundai i10 deluxe on the scrappage scheme; no deposit is very attractive. What I'm struggling to understand is why the price (excl delivery etc.) on the main website is €14,495 yet the price listed in 2 dealerships I've visited is €15,445 & €15,495./are they charging a grand for delivery etc?
They're are also quoting €270 and €244 pm for 36 months on pcp (incl extra €500 for metallic paint). Website has repayments under €200 per month. Knew there would be an extra cost as its clearly labelled, but just think €1k is steep.

jelutong

Article by Charlie Weston in yesterday's Sunday Independent headed,
"PCP car finance deals could be a sub-prime mess all over again".
Worth a read.

Atlantic Dawn

The article...

http://www.independent.ie/business/personal-finance/charlie-weston-pcp-car-finance-deals-could-be-a-subprime-mess-all-over-again-35331251.html

Mantis Toboggan

Still the best way to buy a new car imo.

NIMAN

.... as long as you can afford it.

mickdw

Poor article. Very basic information tbh.
While the argument is valid, it is over simplified really.
Say the industry tanks, and people just hand back their pcp car at 3 years old. The worst case is that they have to look at buying another 3 year old car of similar standard. They should be able to finance such a car with an affordable monthly even with very little deposit especially so if the market has tanked.
Very unlikely to tank to that degree though so the most likely outcome would be people buying out existing car at end of deal if there is little equity available.
The think the industry has further steps to promote sales.
Low and zero deposit deals with manufacturer contributions. we are seeing the start of this while uk have stronger versions with little deposit requirement. If those deals become common, it would take all the fear out of pcp - no equity at end to worry about as no deposit up front. Would generally take heavy discounting from manufacturers to make the figures work.
In additional, supply and demand will also be in play so if new car sales reduced heavily due to tanked values and people started to buy up the plentiful ex pcp cars, it wouldn't take long for the supply of used cars to dry up and as such values build etc making a new car a good option again.
I don't have a PCP but at low rate, it's a good way to buy if you can truly afford the car. No doubt there are cars being sold to people who can't afford the deals and will end badly but that is the case across all finance in all markets.

NIMAN

Charlie Weston......the master of the bleeding obvious.

I often listen to him on Matt Coopers Last Word, as I know as much about finance as he does, for a man that does it for a living. And didn't he get some award recently too? Some people are easily impressed.

sheff the ref

PCP definitely has its advantages.

My car was 20,000 or so new and I have 3 years on 0% finance. I think there is €6500 owed at the end of the three years. I will be keeping it as my mileage is too high

You wont get many 3 year old cars of any size for €6500

c montgomery

NIMAN wrote: »

Charlie Weston......the master of the bleeding obvious.

I often listen to him on Matt Coopers Last Word, as I know as much about finance as he does, for a man that does it for a living. And didn't he get some award recently too? Some people are easily impressed.

I'm always shocked how basic his slot on matt Cooper is. Common sense must be in short supply if his advice is winning him awards.

grogi

c montgomery wrote: »

I'm always shocked how basic his slot on matt Cooper is. Common sense must be in short supply if his advice is winning him awards.

You would be surprised how sparse it is unfortunately...

Villain

He didn't mention the half rule either which given the scenario he paints is very apt

Soarer

sheff the ref wrote: »

PCP definitely has its advantages.

My car was 20,000 or so new and I have 3 years on 0% finance. I think there is €6500 owed at the end of the three years. I will be keeping it as my mileage is too high

You wont get many 3 year old cars of any size for €6500

You should probably know how much is owing at the end of 3 years.

ShadowHearth

Soarer wrote: »

You should probably know how much is owing at the end of 3 years.

That's one thing is unclear for me as it's now mixed information.

If igo pcp, even do whole calculator thing. They show price, let's say, 8K eu left. So it's 100% what you own on that car and is up to you what to do with it? Or dealer can put some bull**** charges on top of it?

vintagevrs

The balloon payment or what the call GFMV in PCP contracts is the outstanding amount owed. Pay it and the car is yours. Nothing hidden - millage, condition etc make no difference at all here.

mickdw

ShadowHearth wrote: »

That's one thing is unclear for me as it's now mixed information.

If igo pcp, even do whole calculator thing. They show price, let's say, 8K eu left. So it's 100% what you own on that car and is up to you what to do with it? Or dealer can put some bull**** charges on top of it?

Think about it logically. You have paid for all the car bar 8k at the end of the term. If you pay that 8k, you own it. The car can have 200k miles and be missing 2 wheels. nobody cares- is your car.
Option 2 is to trade against a new car. dealer will offer trade in price. Anything over and above the gfv who form deposit on next car. Condition and mileage will clearly effect the trade in offer in this case just as it would taking in any car. It is possible that a car in poor condition may not even cover the gfv in an extreme case.
Option 3 is to hand back keys and walk away. If car is damaged or has high miles, there may be charges applied.

Paulzx

NIMAN wrote: »

Charlie Weston......the master of the bleeding obvious.

I often listen to him on Matt Coopers Last Word, as I know as much about finance as he does, for a man that does it for a living. And didn't he get some award recently too? Some people are easily impressed.

So it's not only me then!!!!

Every 6 months he gets a 4 page spread in the Indo telling people how to save money with their personal finances and he trots out that nugget of wisdom to "shop around" for the best deal.

I don't know how he gets away with it

jimmycrackcorm

NIMAN wrote:

Charlie Weston......the master of the bleeding obvious.

Not even that! He compared pcp's to sub prime lending with absolutely no understanding what sub prime lending is.

Pcp: buyer only gets car having shelled out a deposit plus then paying an affordable monthly rate.

Whereas from wiki... In finance, subprime lending (also referred to as near-prime, non-prime, and second-chance lending) means making loans to people who may have difficulty maintaining the repayment schedule, sometimes reflecting setbacks, such as unemployment, divorce, medical emergencies, etc.

Incompetent reporting, traditional hp in comparison is closer to sub prime than a pcp, given the more potentially difficult monthly repayments.

ShadowHearth

mickdw wrote: »

Think about it logically. You have paid for all the car bar 8k at the end of the term. If you pay that 8k, you own it. The car can have 200k miles and be missing 2 wheels. nobody cares- is your car.
Option 2 is to trade against a new car. dealer will offer trade in price. Anything over and above the gfv who form deposit on next car. Condition and mileage will clearly effect the trade in offer in this case just as it would taking in any car. It is possible that a car in poor condition may not even cover the gfv in an extreme case.
Option 3 is to hand back keys and walk away. If car is damaged or has high miles, there may be charges applied.

Thx, I done my research a lot about it and that was the conclusion I came in, but during last few weeks in other threads people put some weird things about paying off balloon payment.
If its still the same figure you signed for after paying zero apr and using scrapage deal, then it's as good as ever.

I think a lot of people overlook last option. Yes, financially it looks worst and a real kick in the teeth of you need to give away car and walk away. Thing is, it is an option for people who will have a financial struggle for one reason or other. If shot went south after 3 years, then you can just throw keys and walk away. In hp you will suffer all 5 years. We had threads here before about hp loop hole, where you could just turn in car after half term and walk away. Some people did it as it was best financial choice. Cut your losses and move on without any debt.

Soarer

So "shef the ref" above would've been given a GMFV of €6,500 when he signed the PCP agreement?

Seems very low doesn't it? Especially at 0%.

Villain

ShadowHearth wrote: »

I think a lot of people overlook last option. Yes, financially it looks worst and a real kick in the teeth of you need to give away car and walk away. Thing is, it is an option for people who will have a financial struggle for one reason or other. If shot went south after 3 years, then you can just throw keys and walk away. In hp you will suffer all 5 years. We had threads here before about hp loop hole, where you could just turn in car after half term and walk away. Some people did it as it was best financial choice. Cut your losses and move on without any debt.

Well in HP or PCP once you have paid back half the value including interest you can walk away and hand the car back to bank.

.G.

Interested in getting a new car this year, however not brand new. I'd imagine there'll be alot of 141's arriving back from pcp's over the coming months. Is pcp finance possible/worth it on a 3 year old car?

The_Honeybadger

jimmycrackcorm wrote: »

Not even that! He compared pcp's to sub prime lending with absolutely no understanding what sub prime lending is.

Pcp: buyer only gets car having shelled out a deposit plus then paying an affordable monthly rate.

Whereas from wiki... In finance, subprime lending (also referred to as near-prime, non-prime, and second-chance lending) means making loans to people who may have difficulty maintaining the repayment schedule, sometimes reflecting setbacks, such as unemployment, divorce, medical emergencies, etc.

Incompetent reporting, traditional hp in comparison is closer to sub prime than a pcp, given the more potentially difficult monthly repayments.

In fairness to him I don't think he was saying that they are the same thing. He was saying that the PCP could cause a crisis on the same scale as sub-prime lending. I don't have any figures on it so can't agree or disagree.

I often hear him on the last word on my way home. His analysis is often very basic, I agree, and I'd rarely learn anything I didn't already know from his piece. It's probably targeted at people with very limited knowledge on the subject. People who are a bit more savvy will likely have done their own research on the subject anyway.

mickdw

superg wrote: »

Interested in getting a new car this year, however not brand new. I'd imagine there'll be alot of 141's arriving back from pcp's over the coming months. Is pcp finance possible/worth it on a 3 year old car?

It's possible but I'd imagine in most cases it might be more sensible to do traditional finance on something 3 years old. Payments should not be massive unless it's pretty special car. imo 6 years old is too old to have money outstanding on a car.
I think a useful product for the motor trade could be zero deposit pcp on used stock. So as an example, a new passat might be 350 per month with 10k deposit on pcp.
If they could offer 3 year old with zero deposit at under 300 per month it might be a runner. when you go back at 6 years old, you wouldn't need any equity to do the same deal again.

bazz26

superg wrote: »

Interested in getting a new car this year, however not brand new. I'd imagine there'll be alot of 141's arriving back from pcp's over the coming months. Is pcp finance possible/worth it on a 3 year old car?

Problem with doing PCP on a 3 year old car is that there is still a balloon payment when the PCP term matures when the car is 6 years old. While the balloon payment may not be very high at that stage, you maybe required to put in a sizable deposit on day 1 to keep monthly repayments respectable. Also if you decide to hand the car back at year 3 and take out another car on PCP then you may be required to put a substantial deposit up front again to keep repayments close to what you were paying before. Your 6 year old car may not have enough value in it either to put towards that deposit if you want to go again. In this case it might make more sense to go PCP on a brand new car imo but you would need to do some maths.

.G.

mickdw wrote: »

It's possible but I'd imagine in most cases it might be more sensible to do traditional finance on something 3 years old. Payments should not be massive unless it's pretty special car. imo 6 years old is too old to have money outstanding on a car.
I think a useful product for the motor trade could be zero deposit pcp on used stock. So as an example, a new passat might be 350 per month with 10k deposit on pcp.
If they could offer 3 year old with zero deposit at under 300 per month it might be a runner. when you go back at 6 years old, you wouldn't need any equity to do the same deal again.

bazz26 wrote: »

Problem with doing PCP on a 3 year old car is that there is still a balloon payment when the PCP term matures when the car is 6 years old. While the balloon payment may not be very high at that stage, you maybe required to put in a sizable deposit on day 1 to keep monthly repayments respectable. Also if you decide to hand the car back at year 3 and take out another car on PCP then you may be required to put a substantial deposit up front again to keep repayments close to what you were paying before. Your 6 year old car may not have enough value in it either to put towards that deposit if you want to go again. In this case it might make more sense to go PCP on a brand new car imo but you would need to do some maths.

Makes sense. Cheers lads.

sheff the ref

I can quote the exact figure if I root out my paperwork but it is in or around 6500.

From memory, my deal was based on three portions that were similar enough amounts

1.The trade in value of my old car
2.The amount paid over three years
3.The remaining sum owed on the car

Give or take a few quid, you are talking 6500 to 6700 each portion

Soarer wrote: »

So "shef the ref" above would've been given a GMFV of €6,500 when he signed the PCP agreement?

Seems very low doesn't it? Especially at 0%.

368100

superg wrote: »

Interested in getting a new car this year, however not brand new. I'd imagine there'll be alot of 141's arriving back from pcp's over the coming months. Is pcp finance possible/worth it on a 3 year old car?

I've just bought a 152 Mercedes on pcp....Mercedes star finance (boi finance) won't do it but this is with first auto finance, arranged through merc dealer and at same rate as Mercedes star finance

26000 Elephants

368100 wrote: »

I've just bought a 152 Mercedes on pcp....Mercedes star finance (boi finance) won't do it but this is with first auto finance, arranged through merc dealer and at same rate as Mercedes star finance

Sounds great - would you mind giving an indication of the deal?

368100

26000 Elephants wrote: »

Sounds great - would you mind giving an indication of the deal?

Figures?

€36k less €10k trade in so €26k......Gfmv €11k

37 monthly payments of €480.....5.9% Apr

26000 Elephants

total cost of finance for a 152 merc - €2700 (excl. the deposit of course) - not bad.
Well wear.