PCP finance.

vintagevrs

Kaiser84 wrote: »

Can you use the equity at the end of pcp towards a deposit to go standard finance on a one year old car?

Yes...If they give you a trade in allowance that is greater than the amount owed you can use that towards your deposit.

boardsuser1

No idea about PCP finance.

Due to our expanding family we now require a 7 seater, preferably a Ford Galaxy.

Current car is a 2009 Ford Focus 1.6 tdci with a fresh NCT for 27 months and 1 years tax.

Mileage on the car is 115,000 miles (Imported at 6 months old) and during my ownership (16 months) it has been main dealer only serviced.

Is going down the PCP route viable?

Any advice is greatly appreciated.

Aka Ishur

KC161 wrote: »

No idea about PCP finance.
.....
.

If the bulk of those 115k miles was done by yourself in 16 months, you are talking what..200K miles so 320k Km by the end of the 36 month term. PCP will only work for you as a cheap car loan for a new car. You will have 0 equity to use to change cars. Only take it if you are absolutely sure you will afford the balloon payment at the end, or are comfortable re-financing it.

jameshayes

Has anyone moved manufacturer after a PCP deal is up? I'll have a little equity in the car that I can use as a deposit for my next car but I don't know how this would work if I change brands? Do I trade the car into the new dealer and they pay off the final payment to the original brand?

loyatemu

KC161 wrote: »

No idea about PCP finance.

Due to our expanding family we now require a 7 seater, preferably a Ford Galaxy.

Current car is a 2009 Ford Focus 1.6 tdci with a fresh NCT for 27 months and 1 years tax.

Mileage on the car is 115,000 miles (Imported at 6 months old) and during my ownership (16 months) it has been main dealer only serviced.

Is going down the PCP route viable?

Any advice is greatly appreciated.

S-Max? I've heard nothing but good things about it, and it's more car-like and cheaper than the Galaxy.

boardsuser1

Aka Ishur wrote: »

If the bulk of those 115k miles was done by yourself in 16 months, you are talking what..200K miles so 320k Km by the end of the 36 month term. PCP will only work for you as a cheap car loan for a new car. You will have 0 equity to use to change cars. Only take it if you are absolutely sure you will afford the balloon payment at the end, or are comfortable re-financing it.

Bought the car at 91k so i've done just short of 25k in 16 months roughly.

boardsuser1

loyatemu wrote: »

S-Max? I've heard nothing but good things about it, and it's more car-like and cheaper than the Galaxy.

I like them, they look sporty, is there much room for 2 people in the back?

I'll need it with 4 kids and buggies,shopping etc.

The focus is a nightmare for this reason alone.

A buggy in the boot and i can't fit shopping plus 1 child is always in the grandparents when we go out.

loyatemu

KC161 wrote: »

I like them, they look sporty, is there much room for 2 people in the back?

I'll need it with 4 kids and buggies,shopping etc.

The focus is a nightmare for this reason alone.

A buggy in the boot and i can't fit shopping plus 1 child is always in the grandparents when we go out.

ok - with 4 kids you probably do need the full Galaxy - the mini-MPVs (SMax, Scenic etc) are more suited to those who only need to carry the occasional extra friend etc.

boardsuser1

loyatemu wrote: »

ok - with 4 kids you probably do need the full Galaxy - the mini-MPVs (SMax, Scenic etc) are more suited to those who only need to carry the occasional extra friend etc.

That's what i was thinking.

The galaxy looks bigger at the rear than the S-Max, hence more space.

Does PCP have to be on a brand new vehicle?

jimmycrackcorm

jameshayes wrote:

Has anyone moved manufacturer after a PCP deal is up? I'll have a little equity in the car that I can use as a deposit for my next car but I don't know how this would work if I change brands? Do I trade the car into the new dealer and they pay off the final payment to the original brand?

Know someone who did this. The big advantage was a different dealer gave them a higher value for the trade in. The dealer also sorted the final payment and they went to a new pcp with a better spec different manufacturer.

EndaHonesty

loyatemu wrote: »

ok - with 4 kids you probably do need the full Galaxy - the mini-MPVs (SMax, Scenic etc) are more suited to those who only need to carry the occasional extra friend etc.

There's nothing "mini" about the S-Max, the Galaxy and the S-Max are pretty much the same size inside & out.

The S-Max is just a sportier version of the Galaxy with a lower roof over the boot.

The S-Max is a bit cheaper too...

https://www.carwow.co.uk/blog/ford-galaxy-vs-ford-s-max-comparison

mickdw

jameshayes wrote: »

Has anyone moved manufacturer after a PCP deal is up? I'll have a little equity in the car that I can use as a deposit for my next car but I don't know how this would work if I change brands? Do I trade the car into the new dealer and they pay off the final payment to the original brand?

There is no issue at all.
Contact your car finance provider if you have not already got a letter stating final settlement figure on your current car.
Take this with you to any dealer you like. They will put a value on your car and if this is greater than the settlement figure, the difference is your deposit to go forward.
Its just as easy as changing car at the same dealer. Of course the manufacturers / salesmen dont advertise this as they prefer a somewhat captive customer and can turn the screw alittle on price that way.

Kagawa

Does anyone know if you can change your car after two years on a three year PCP agreement? I may want to change my car to a different car after two years, and not a new new car either, probably a few years old. Do I just pay the balloon + whatever is left on the three year finance, i am with VW btw.

TIA

MarkN

Kagawa wrote: »

Does anyone know if you can change your car after two years on a three year PCP agreement? I may want to change my car to a different car after two years, and not a new new car either, probably a few years old. Do I just pay the balloon + whatever is left on the three year finance, i am with VW btw.

TIA

Yes you can change after 1, 2 or 3 depending on what the settlement is.

vintagevrs

You can change anytime you like. Call you dealer and ask what's owed on the car. They'll tell you over the phone, but as they checked the system it automatically will send you a letter in the post telling you what they told you over the phone.

Pay off the finance and you can do what you like.

mickdw

Kagawa wrote: »

Does anyone know if you can change your car after two years on a three year PCP agreement? I may want to change my car to a different car after two years, and not a new new car either, probably a few years old. Do I just pay the balloon + whatever is left on the three year finance, i am with VW btw.

TIA

yep get settlement figure which will be balloon amount plus total of remaining installments less some reduction due to some loan interest being avoided.
Pay that off and car is yours or walk into another dealer and if car is worth more than that settlement figure, dealer will allow difference as deposit on new car.

Soarer

KC161 wrote: »

Bought the car at 91k so i've done just short of 25k in 16 months roughly.

The car had done 91k miles in it's first 6 months? :eek:

All in all

Soarer wrote: »

The car had done 91k miles in it's first 6 months? :eek:

No - poster has a 2009 car.

youcancallmeal

I'm just starting to look into a pcp. Would do less than 10k km per year. We're a one car family so it needs to be reliable, buying new seems to make sense. I wondering about long term scenario, I'm probably missing something but say if I plan to trade in for a new car every 3 years for next 12-15 years would I be right in thinking that with each trade in I will be increasing my deposit amount(equity in car). So if I start with car valued at 30k with 10% deposit and then after 4/5 trade ins I would probably be in a position where we'd only have to pay off small balloon payment and own the most recent car outright?

Jobs OXO

youcancallmeal wrote: »

I'm just starting to look into a pcp. Would do less than 10k km per year. We're a one car family so it needs to be reliable, buying new seems to make sense. I wondering about long term scenario, I'm probably missing something but say if I plan to trade in for a new car every 3 years for next 12-15 years would I be right in thinking that with each trade in I will be increasing my deposit amount(equity in car). So if I start with car valued at 30k with 10% deposit and then after 4/5 trade ins I would probably be in a position where we'd only have to pay off small balloon payment and own the most recent car outright?

Nope that's wrong. After 3 years it's likely you would need to throw something on top of the car you are trading in to essentially "reset" everything to when you started the PCP for first car.

mickdw

no, that would not be correct.
At the end of each 3 year deal, you could reasonably expect equity of about 15 percent of new price to be available to you from the car you are returning.
Now if you can afford the first new car with 10 to 15 percent deposit, you should be able to jump from car to car without putting in additional cash deposit each time.
Where alot of people get caught is that they put 30 percent deposit into first deal because they have a fully owed car to trade first time, get a stupidly low monthly Deal then find they need a load of cash for next car or their monthly goes through the roof.
Operating with smaller deposit is a more realistic and sustainable way to go.
The only way you scenario could actually happen is if you were prepared to put in 10 percent deposit into savings account at start of each new deal, while the equity in the returned car would look after the 10 percent deposit needed to start new deal on new car.
After 5 deals, you would have enough to buy the car out at end of term.
You would be looking at 400 per month roughly to buy a 30000 car on zero interest deal with 10 percent deposit and a final payment of about 44 percent of new price.

youcancallmeal

Jobs OXO wrote: »

Nope that's wrong. After 3 years it's likely you would need to throw something on top of the car you are trading in to essentially "reset" everything to when you started the PCP for first car.

Okay I see where I've gone wrong, so the equity would come from the difference between the trade in value and the GFV. Taking my example above. If I buy 30k car with 5k deposit then I'm looking at 13k GFV after 3 years. I would need trade in value to be 18k in order to get a new PCP without having to top up. Is that right?

mickdw

youcancallmeal wrote: »

Okay I see where I've gone wrong, so the equity would come from the difference between the trade in value and the GFV. Taking my example above. If I buy 30k car with 5k deposit then I'm looking at 13k GFV after 3 years. I would need trade in value to be 18k in order to get a new PCP without having to top up. Is that right?

Yep

Jobs OXO

youcancallmeal wrote: »

Okay I see where I've gone wrong, so the equity would come from the difference between the trade in value and the GFV. Taking my example above. If I buy 30k car with 5k deposit then I'm looking at 13k GFV after 3 years. I would need trade in value to be 18k in order to get a new PCP without having to top up. Is that right?

Yes and that's where the exposure lies. If the trade in value is 17k you'd need to put in 1k cash to start again

jimmycrackcorm

youcancallmeal wrote:

I'm just starting to look into a pcp. Would do less than 10k km per year. We're a one car family so it needs to be reliable, buying new seems to make sense. I wondering about long term scenario, I'm probably missing something but say if I plan to trade in for a new car every 3 years for next 12-15 years would I be right in thinking that with each trade in I will be increasing my deposit amount(equity in car). So if I start with car valued at 30k with 10% deposit and then after 4/5 trade ins I would probably be in a position where we'd only have to pay off small balloon payment and own the most recent car outright?

If you ate able to save extra money each month then it is possible. Assuming the gmfv holds up without shocks like Brexit hitting second hand car prices, you should be able to do it over time.

It probably makes more sense though to not increase deposits, save the money separately because you can continually take advantage low pcp rates for the portion being borrowed. On top of that you have your savings not tied up in an asset with a choice to use in an emergency or eventually built up to pay off the balloon on a three year old car.

colm_mcm

The difference between the GMFV and the actual value is essentially your deposit the second time.

If, for arguments sake you had a deal where it was split 33/33/33 deposit/payments/GMFV, In order to keep your monthly payments the same on a car of the same value, the car would need to retain 66% of its value after 3 years.

Jobs OXO

jimmycrackcorm wrote: »

If you ate able to save extra money each month then it is possible. Assuming the gmfv holds up without shocks like Brexit hitting second hand car prices, you should be able to do it over time.

It probably makes more sense though to not increase deposits, save the money separately because you can continually take advantage low pcp rates for the portion being borrowed. On top of that you have your savings not tied up in an asset with a choice to use in an emergency or eventually built up to pay off the balloon on a three year old car.

The GMFV doesn't need to hold up as its set and won't change. The 'G' stands for 'GUARANTEED'

Shedite27

mickdw wrote: »

Where alot of people get caught is that they put 30 percent deposit into first deal because they have a fully owed car to trade first time, get a stupidly low monthly Deal then find they need a load of cash for next car or their monthly goes through the roof.
Operating with smaller deposit is a more realistic and sustainable way to go.
The only way you scenario could actually happen is if you were prepared to put in 10 percent deposit into savings account at start of each new deal, while the equity in the returned car would look after the 10 percent deposit needed to start new deal on new car.
After 5 deals, you would have enough to buy the car out at end of term.
You would be looking at 400 per month roughly to buy a 30000 car on zero interest deal with 10 percent deposit and a final payment of about 44 percent of new price.

I had a sales agent argue this logic with me so did the maths.

I had €4k trade in value, and €4k cash to put towards my new car. Was going to be €250 repayments for 3 years.

She was recommending I put a less deposit (€4k) and increased repayment, but my repayments were subject to 2.9% APR.

The other €4k I was going to put towards the car, was now going to be a loan at 2.9% (so paid more than €4k.

At the end of 3 years, I will have paid less to Peugeot, and we will have the same equity (Value-GMFV).

Shane732

Shedite27 wrote: »

I had a sales agent argue this logic with me so did the maths.

I had €4k trade in value, and €4k cash to put towards my new car. Was going to be €250 repayments for 3 years.

She was recommending I put a less deposit (€4k) and increased repayment, but my repayments were subject to 2.9% APR.

The other €4k I was going to put towards the car, was now going to be a loan at 2.9% (so paid more than €4k.

At the end of 3 years, I will have paid less to Peugeot, and we will have the same equity (Value-GMFV).

Basically your saying that you're paying interest on the 2.9%?

grogi

Shane732 wrote: »

Basically your saying that you're paying interest on the 2.9%?

Yes, unless there is 0% APR on offer, you are paying interest on the whole Price less Deposit.

Over x years you would pay approximately (Price-Deposit+GMFV)/2*APR*X.

For instance, on a car worth €30000, 3 years contract with APR 2.9%, GMFV €15000
- if you put down €10000 deposit, you pay €1550 interest
- if you put down €1000 deposit, you pay €1915 interest

Shedite27

Shane732 wrote: »

Shedite27 wrote: »

I had a sales agent argue this logic with me so did the maths.

I had €4k trade in value, and €4k cash to put towards my new car. Was going to be €250 repayments for 3 years.

She was recommending I put a less deposit (€4k) and increased repayment, but my repayments were subject to 2.9% APR.

The other €4k I was going to put towards the car, was now going to be a loan at 2.9% (so paid more than €4k.

At the end of 3 years, I will have paid less to Peugeot, and we will have the same equity (Value-GMFV).

Basically your saying that you're paying interest on the 2.9%?

Correct. Whichever way the sales agent cut it, I either paid 4K extra now, or 4K + 2.9% in repayments

jimmycrackcorm

grogi wrote:

For instance, on a car worth €30000, 3 years contract with APR 2.9%, GMFV €15000 - if you put down €10000 deposit, you pay €1550 interest - if you put down €1000 deposit, you pay €1915 interest

This didn't make sense to me so I put your figures into a pcp calculator and indeed I got the same interest figures.

However what was different was the monthly payments for each, 186 vs 456.

mickdw

Shedite27 wrote: »

I had a sales agent argue this logic with me so did the maths.

I had €4k trade in value, and €4k cash to put towards my new car. Was going to be €250 repayments for 3 years.

She was recommending I put a less deposit (€4k) and increased repayment, but my repayments were subject to 2.9% APR.

The other €4k I was going to put towards the car, was now going to be a loan at 2.9% (so paid more than €4k.

At the end of 3 years, I will have paid less to Peugeot, and we will have the same equity (Value-GMFV).

Yes you are correct that you pay less due to a lower amount to be financed by putting in as much deposit as you can however my point was more related to the ongoing ability of your average buyer to get into a new deal every 3 years.
What too many people tend to do is use their valuable trade which they own outright at start of first pcp to put in 30% deposit. They then stretch themselves to the max monthly they can afford therefore getting into the most expensive car possible. All is good until end of year 3 where they suddenly have only a fraction of the 30% deposit that they had the first time and now are looking at a huge monthly to get into same type of car again. To ensure people dont go down that road, stress testing any deal using 10 to 15% deposit is a very good idea - If you can afford the repayments based on the small deposit, you can afford the car and you can likely afford to replace it every 3 years. If you can only just scrape the repayments with 30% deposit gone in, you cannot afford the car really and will not be able to replace it.
In addition, if one is to avail of zero percent finance, it makes further sense to keep your cash and put in a lower deposit.

grogi

jimmycrackcorm wrote: »

This didn't make sense to me so I put your figures into a pcp calculator and indeed I got the same interest figures.

However what was different was the monthly payments for each, 186 vs 456.

Hardly surprising as you would put €9000 more upfront in the first case, right?

ctlsleh

These 0% PCP deals from Volkswagen are pretty good value right? You can finance the majority of the cars value by placing a minimum 10% on the deposit and have 0% finance for 3 years on basically about half the cars value and then buy at the GMFV at a normal bank rate.......

Am I missing anything...?

colm_mcm

Nope, that's it in a nutshell.

youcancallmeal

colm_mcm wrote: »

Nope, that's it in a nutshell.

Is there only certain models which have 0% pcp finance deals? When you go onto the VW Ireland to configure a model the resulting finance options only show the normal 5.9% apr? I guess you probably need to go into a show room to get a proper quote

Toyotafanboi

Yes, with most models you have to buy a "highline" (top spec) to get 0%, the lower the spec the higher the APR. Trendline is usually the lowest spec @ 5.9% and there are a few specs in the middle, comfortline, R-line etc.

mickdw

The vw website generally shows the correct rates for each model but when you configure a car, it's not right. Zero percent on a highline passat for example.
There is also a VW contribution on some models to help with deposit.
Pcp with zero interest is really a no brainer as long as you can actually afford the car.

SteelyDanJalapeno

Hi All,

I got a Seat Leon FR about 13 months ago on PCP for about 27k, at the time I was in 2 minds about getting an electric car but there was no options available that suited me with range anxiety etc. However the Hyundai Ioniq (28k) now boasts 200km range and I think that this suits me ideally.

I don't know where I now stand with my current PCP deal thou, do I need to see out my 3 years on the Leon or is there anyway I can trade the Leon against the Ioniq and move the finance? I've had the Leon independently valued at 24k trade in value if that makes any difference.

jca

TiltedBrain wrote: »

Hi All,

I got a Seat Leon FR about 13 months ago on PCP for about 27k, at the time I was in 2 minds about getting an electric car but there was no options available that suited me with range anxiety etc. However the Hyundai Ioniq (28k) now boasts 200km range and I think that this suits me ideally.

I don't know where I now stand with my current PCP deal thou, do I need to see out my 3 years on the Leon or is there anyway I can trade the Leon against the Ioniq and move the finance? I've had the Leon independently valued at 24k trade in value if that makes any difference.

What do you plan to do at the end of the three years with the Ioniq? With highish depreciation around the Hyundai name and the added depreciation that electric cars have at the moment I'd be worried about being in negative equity come trade in time.

grogi

jca wrote: »

What do you plan to do at the end of the three years with the Ioniq? With highish depreciation around the Hyundai name and the added depreciation that electric cars have at the moment I'd be worried about being in negative equity come trade in time.

If there is negative equity, just hand it back and wave to the salesman.

Jobs OXO

grogi wrote: »

If there is negative equity, just hand it back and wave to the salesman.

There will never ever be negative equity. The second hand value will always be more that the balloon payment.

Whether there is enough equity to cover a deposit at the same repayment amount for another new car is another question.

ELM327

jca wrote: »

What do you plan to do at the end of the three years with the Ioniq? With highish depreciation around the Hyundai name and the added depreciation that electric cars have at the moment I'd be worried about being in negative equity come trade in time.

Where do you see this?
Current second hand EV values are very strong.
I could sell mine now (after ~9 months of ownership) for what I paid for it.

grogi

ELM327 wrote: »

Where do you see this?
Current second hand EV values are very strong.
I could sell mine now (after ~9 months of ownership) for what I paid for it.

Did you buy new?

EV have very steep depreciation at the begining - as the new technology is constantly coming out pressuring the older cars down. But once they get 3 yrs old and cost in €8-12k territory and the cars are good enough, there is hardly any further depreciation.

ELM327

grogi wrote: »

Did you buy new?

EV have very steep depreciation at the begining - as the new technology is constantly coming out. But once they get 3 yrs old and cost in €8-12k territory, there is hardly any further depreciation.

No I bought at 2 years old for 12k

My exact model (2014, SVE,6.6 charger) are being listed now at 13-13.5-14 on donedeal. 9 months after my purchase I could potentially sell without loss. Crazy for a 2/3 year old car.

Anyone buying brand new will always lose money.

jameshayes

TiltedBrain wrote: »

Hi All,

I got a Seat Leon FR about 13 months ago on PCP for about 27k, at the time I was in 2 minds about getting an electric car but there was no options available that suited me with range anxiety etc. However the Hyundai Ioniq (28k) now boasts 200km range and I think that this suits me ideally.

I don't know where I now stand with my current PCP deal thou, do I need to see out my 3 years on the Leon or is there anyway I can trade the Leon against the Ioniq and move the finance? I've had the Leon independently valued at 24k trade in value if that makes any difference.

You can action the 'voluntary termination' clause on your Leon, means you can walk away after 1/2 of the PCP term has passed (you'll either have to pay the extra 5 months or wait it out).. not the best idea financially but it might suit you. All you need to do is ring seat, ask for the VT form and send it back, they will arrange a person to come inspect the car and take it back.

ELM327

OSI wrote: »

So not really relevant to someone looking to buy a new Ioniq on finance then?

Relevant as far as the expected 3 years valuation/depreciation anyway.

jca

ELM327 wrote: »

No I bought at 2 years old for 12k

My exact model (2014, SVE,6.6 charger) are being listed now at 13-13.5-14 on donedeal. 9 months after my purchase I could potentially sell without loss. Crazy for a 2/3 year old car.

Anyone buying brand new will always lose money.

Listed but not selling, anyone with 2 brain cells wanting a 2 year old leaf is going to the UK

ELM327

jca wrote: »

Listed but not selling, anyone with 2 brain cells wanting a 2 year old leaf is going to the UK

Yes, however the supply of ex lease leafs (which was keeping the supply high and price low) in the UK has ended. The UK are seeing price stability. The days of £6k (non flex) leafs in the UK is over for now.