PCP finance.

Marcusm

R.O.R wrote: »

You pay the depreciation between the cost price and the GMFV.

You pay interest on the cost price.

The interest should be stated as a Apr based on cost price less deposit as that is the amount by if finance being raised.

nebraska132

R.O.R wrote: »

Try this - I've checked it against a few PCP figures that you can get online, and it's not giving exactly the same results but it's within a few Euro.

Thanks you for that it's very helpful!

artheb

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

TheShow

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

Sounds logical.

For those on about the interest cost, be under no illusions that the finance amount is the cost of the car less the deposit, and interest will be accrued to the outstanding total balance as the facility amortises.

artheb

TheShow wrote: »

Sounds logical.

For those on about the interest cost, be under no illusions that the finance amount is the cost of the car less the deposit, and interest will be accrued to the outstanding total balance as the facility amortises.

That's very complex statement. In my opinion the interest is charged from the total amount even though you finance the part of it. I just did a simulation for PCP over 3y and loan for full amount for 3 years. Cost of credit is almost the same. See attached and correct me if I have it wrong.

grogi

artheb wrote: »

That's very complex statement. In my opinion the interest is charged from the total amount even though you finance the part of it. I just did a simulation for PCP over 3y and loan for full amount for 3 years. Cost of credit is almost the same. See attached and correct me if I have it wrong.

No, it is not. The interest is charged on the remaining part = price - deposit.

Remember that the RRP is not what you pay - there are documentation charges, delivery charges etc.

acronym Chilli

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

What's the purchase price of the car? i.e. the cash price to buy outright today?

artheb

acronym Chilli wrote: »

What's the purchase price of the car? i.e. the cash price to buy outright today?

Around 35k, can't remember exactly. New one same spec is around 55k

Klopp

artheb wrote: »

Around 35k, can't remember exactly. New one same spec is around 55k

I thought apr on all Audi's new or old was 7.9?

bazz26

Just take note the A6 is being replaced by a brand new model early next year so that will have a bearing on resale values of the current model. Equity in a 2015 model might not be great at the end of your PCP term so you may have to put a much larger deposit into your next PCP deal to keep similar monthly repayments. Something to be aware of.

Cyrus

Klopp wrote: »

I thought apr on all Audi's new or old was 7.9?

doubtful

last few i have seen was 0 and 2.9%

artheb

bazz26 wrote: »

Just take note the A6 is being replaced by a brand new model early next year so that will have a bearing on resale values of the current model. Equity in a 2015 model might not be great at the end of your PCP term so you may have to put a much larger deposit into your next PCP deal to keep similar monthly repayments. Something to be aware of.

Totally aware of that and not really concerned. I'll be happy if trading value on the car with extra miles would cover the balloon payment. I'm happy to pay another 7k and drive same type of car again. I do a lot of miles and I'll never make money on the car. On the Passat CC I lost around 8k over two years not counting the repairs I did.

artheb

artheb wrote: »

............. On the Passat CC I lost around 8k over two years not counting the repairs I did.

Would you expect to lose about €15k on the A6 over 2 years?

artheb

Augeo wrote: »

Would you expect to lose about €15k on the A6 over 2 years?

Hopefully little bit less, maybe around 12-13k time will show.

TheShow

artheb wrote: »

That's very complex statement. In my opinion the interest is charged from the total amount even though you finance the part of it. I just did a simulation for PCP over 3y and loan for full amount for 3 years. Cost of credit is almost the same. See attached and correct me if I have it wrong.

Loan amount is wrong should be 14000 (cost less deposit).

boardsuser1

Next door neighbour got a car last year on PCP,her relationship has now ended and she wanted to hand back the car, she was told she now can't and has fallen behind on the repayments as a result of the loss of income.

Anyone here in the know who can offer (non legal) advice i could pass on?

TheShow

Cork Truck Driver wrote: »

Next door neighbour got a car last year on PCP,her relationship has now ended and she wanted to hand back the car, she was told she now can't and has fallen behind on the repayments as a result of the loss of income.

Anyone here in the know who can offer (non legal) advice i could pass on?

talk to MABS or a similar agency. if the car gets repossessed or she does not engage with the lender, her icb will be screwed and she will have great difficulty in getting a loan in the future.

artheb

Cork Truck Driver wrote: »

Next door neighbour got a car last year on PCP,her relationship has now ended and she wanted to hand back the car, she was told she now can't and has fallen behind on the repayments as a result of the loss of income.

Anyone here in the know who can offer (non legal) advice i could pass on?

What type of car it is? She could try to find someone to "buy it back/takeover pcp finance" from her. That might be possible I suppose.

Casati

artheb wrote: »

What type of car it is? She could try to find someone to "buy it back/takeover pcp finance" from her. That might be possible I suppose.

She needs to contact the finance company used by the manufacturer e.g Volkswagen bank, and get a settlement figure. If the car is only a year old she should then go to the original dealer and indeed other franchise dealers and ask them to buy the car off her. If they offer her more than the settlement figure then she will be home and dry. you can't get somebody else to take over her finance

Casati

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

Sounds interesting. Question, if the value of the car is less than the GFMV in three years, how much of a penalty would have to pay assuming you stick 120k on it?

artheb

Casati wrote: »

Sounds interesting. Question, if the value of the car is less than the GFMV in three years, how much of a penalty would have to pay assuming you stick 120k on it?

I'll not be paying any penalties. I'm trading the car so in that case it is deprecation like with any other car financed or not. Value may as well be below GFMV. In that case I will need to have bigger deposit for a new car.

boardsuser1

artheb wrote: »

What type of car it is? She could try to find someone to "buy it back/takeover pcp finance" from her. That might be possible I suppose.

It's a 162 Peugeot 308.

The car has been keyed on all 4 corners also.

I assume it would need a full respray as a result.

It's metallic.

boardsuser1

Casati wrote: »

She needs to contact the finance company used by the manufacturer e.g Volkswagen bank, and get a settlement figure. If the car is only a year old she should then go to the original dealer and indeed other franchise dealers and ask them to buy the car off her. If they offer her more than the settlement figure then she will be home and dry. you can't get somebody else to take over her finance

She's fcuked there I'd say. She has it 12 months and is about 3 months behind.

DaveyDave

BadMor wrote: »

Wow. Franky, that you can't remember what you paid for the car is shocking.

My advice - Do not go near PCPs. They are a scam. As a rule of thumb, if anything is too complicated to understand, then do not do it. If you cannot afford a car though traditional methods (savings/loan), then walk away and buy an older model.

How are PCPs a scam? If you went in to pay cash up front on a car I'd pay the exact same as you. Why would you suggest people are better off geting a car with a loan? If you can afford to get a car on a loan, you can get it on PCP. Why would I want to get a loan and pay 8-9% interest when I can get it cheaper on PCP?

BadMor

DaveyDave wrote: »

How are PCPs a scam? If you went in to pay cash up front on a car I'd pay the exact same as you. Why would you suggest people are better off geting a car with a loan? If you can afford to get a car on a loan, you can get it on PCP. Why would I want to get a loan and pay 8-9% interest when I can get it cheaper on PCP?

They lure people into thinking they can afford a car that they cannot. If you can afford a car through traditional methods and you fully understand the pcp contract then maybe a pcp is for you. Beware though that the lower interest rates advertised are applied to the entire car price by some dealers - so the rate on the financed about is actually 8-9%,

When in a dealership, potential buyers are not made aware of the potential pitfalls like the unfortunate lady who has separated from her partner - e.g. in the event of loss of earnings, malicious damage to car etc, you cannot sell the car, it belongs to the dealership and they can chase you for the money. If you do not fully understand that you need to pay the GMFV at the end, you do not own the car - most people i know who have taken out pcps are not aware of this. I have a neighbour who bought a Range Rover paying 15k deposit and focused on the 500EUR monthly payments - she thinks she has 30k to put towards her next car at the end of the 3 years.

From my experience, this product preys on the vulnerable and bamboozles them complication financial structures. That a standard car salesman has to send you to the finance team to explain it tells you everything.

Casati

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

Very long post with a simple message, buying an older car is cheaper than a newer one.

Casati

artheb wrote: »

I'll not be paying any penalties. I'm trading the car so in that case it is deprivation like with any other car financed or not. Value may as well be below GFMV. In that case I will need to have bigger deposit for a new car.

Fair enough, I read the post incorrectly that you'd be handing I back. Overall I think it's great that they are offering low Apr on two year old cars, would make me look at this further next time round

sheff the ref

As I see it PCP is not a scam. It is quite straightforward and more often than not the graphic images of a car split into three explain it visually

1.You put up your deposit, generally a trade in
2.You make payments on a fixed amount
3.You are left with a car after 3 years which you can upgrade (depending on a range of factors and potential changes to repayments), pay a final sum to keep, or else hand it back

It couldn't be more straightforward

Lantus

BadMor wrote:

When in a dealership, potential buyers are not made aware of the potential pitfalls like the unfortunate lady who has separated from her partner - e.g. in the event of loss of earnings, malicious damage to car etc, you cannot sell the car, it belongs to the dealership and they can chase you for the money. If you do not fully understand that you need to pay the GMFV at the end, you do not own the car - most people i know who have taken out pcps are not aware of this. I have a neighbour who bought a Range Rover paying 15k deposit and focused on the 500EUR monthly payments - she thinks she has 30k to put towards her next car at the end of the 3 years.

If I get a 30k car loan from boi and lose my job and stop paying the loan are you saying I am safe? That they won't come after me or seize the car to pay the debt.

There are people that enter into all sorts of financial arrangements without fully understanding them. It's not a reason to not have them. Sure half the country took out mortgages on overpriced property that still isn't worth the loan value today.

artheb

sheff the ref wrote: »

As I see it PCP is not a scam. It is quite straightforward and more often than not the graphic images of a car split into three explain it visually

1.You put up your deposit, generally a trade in
2.You make payments on a fixed amount
3.You are left with a car after 3 years which you can upgrade (depending on a range of factors and potential changes to repayments), pay a final sum to keep, or else hand it back

It couldn't be more straightforward

4. Trade the car, dealer pays the balloon and if you have additional equity you can put it toward a new car. Equity may not be high so you may need to come up with extra cash. to keep the same repayments. This is what many people do not understand. They think that after 3 years car will be worth much more than GFMV and they will have enough equity to enter a new deal without extra cash.

TheShow

All the scaremongering about PCPs being a scam is hokem from the "I don't know what a tracker mortgage is" crowd. If you are entering into a financial product and you are unsure as to how it works, or if you can't afford it, then instead of finding out details and trying to understand it, you put your head in the sand and hope for the best, you deserve to be on the losing end.

Make your deposit.
Make your repayments at a low Apr, or zero % if you're lucky.
Be in the knowledge that the GMFV is a balloon payment at the end which may be more than the car is worth, depending on market conditions and this will have financial implications if you wish to trade to a new car. Alternatively the GMFV will be less than the market value, giving you equity to trade up.

I'm not sure why people expect to have the same loan repayment amount on the next finance agreement. It's a new loan for a more than likely different amount.

Get over the shock people. It's all very straight forward.

Cyrus

BadMor wrote: »

They lure people into thinking they can afford a car that they cannot. If you can afford a car through traditional methods and you fully understand the pcp contract then maybe a pcp is for you. Beware though that the lower interest rates advertised are applied to the entire car price by some dealers - so the rate on the financed about is actually 8-9%,

so you don't understand how it works either?

The interest is applied to the entire price (less your deposit) by ALL dealers, and the rate is the rate quoted

acronym Chilli

Cyrus wrote: »

so you don't understand how it works either?

The interest is applied to the entire price (less your deposit) by ALL dealers, and the rate is the rate quoted

The interest rate doesn't really matter, nor what they tell you it's calculated on. What matters are the repayments (all of them). Anything else is part of marketing communication.

e.g. To pitch the deal differently I (as a dealer/manufacturer) can move interest rate up and down while keeping the cost of credit constant by charging it on different amounts (e.g. 1% on 30k or 3% on 10k). The interest rate would be more relevant if you could do things like with a mortgage: e.g. if interest was charged on the reducing balance, and then you could elect to make accelerated payments in early years to reduce your principal and cost of credit.

The other angle is that there are lots of ways for the dealer to tweak the deal and lots of places to hide the cost of credit. e.g. offering/not-offering a discount on the top line price, charge structure for extras packs, the price offered on a traded in vehicle, penalty fees on mileage etc., the headline price for the car itself (list price).

For a no trade in deal, only 3 numbers are important:
P1: the deposit
P2: the monthly repayment
P3: the GFMV payment
Non-discounted total cashflows are in general P1+(12)(3)(P2)+P3.

You should really discount, and if you've a mortgage, then you could do that calculation discounting by your mortgage rate to get Net present value.

That's the financials at least, gets trickier when you start thinking of which cars you prefer, who's more reliable, who has better warranties, parts costs, blah, blah.

And if you really want to settle the "which part of the price is the interest calculated on", then just do the calculations and check. But it's not really that interesting since they give you a fixed monthly repayment and it's €€€ you need to pay, not %%%.

Cyrus

acronym Chilli wrote: »

The interest rate doesn't really matter, nor what they tell you it's calculated on. What matters are the repayments (all of them). Anything else is part of marketing communication.

e.g. To pitch the deal differently I (as a dealer/manufacturer) can move interest rate up and down while keeping the cost of credit constant by charging it on different amounts (e.g. 1% on 30k or 3% on 10k). The interest rate would be more relevant if you could do things like with a mortgage: e.g. if interest was charged on the reducing balance, and then you could elect to make accelerated payments in early years to reduce your principal and cost of credit.

The other angle is that there are lots of ways for the dealer to tweak the deal and lots of places to hide the cost of credit. e.g. offering/not-offering a discount on the top line price, charge structure for extras packs, the price offered on a traded in vehicle, penalty fees on mileage etc., the headline price for the car itself (list price).

For a no trade in deal, only 3 numbers are important:
P1: the deposit
P2: the monthly repayment
P3: the GFMV payment
Non-discounted total cashflows are in general P1+(12)(3)(P2)+P3.

You should really discount, and if you've a mortgage, then you could do that calculation discounting by your mortgage rate to get Net present value.

That's the financials at least, gets trickier when you start thinking of which cars you prefer, who's more reliable, who has better warranties, parts costs, blah, blah.

And if you really want to settle the "which part of the price is the interest calculated on", then just do the calculations and check. But it's not really that interesting since they give you a fixed monthly repayment and it's €€€ you need to pay, not %%%.

totally agreed but people do still get hung up on APR etc

acronym Chilli

Cyrus wrote: »

totally agreed but people do still get hung up on APR etc

I know.
It's like road tax.

An anecdote from a marketing prof I had, where he emphasised the importance of what you charged on. He grew up in Switzerland and family had a local restaurant. From a business point of view: if diner went in, and ate "a salad, fish with potatoes and asparagus, chocolate ice-cream and an espresso"; what matters to the restaurant was what money they paid on the final bill. Say that was CHF56.
What he said was that, at least in Switzerland, people were very particular about the price of a coffee. Say that was CHF1.20. If the restaurant wanted to get an extra franc out of their customer, they could put the price of the coffee up from 1.20 to 2.20; but if they did that customers would be super annoyed and they'd all be complaining to each other about "who do they think they are", "that's crazy money", "coffee in the place down the street is only 1.15", etc., Even a small change would annoy people: 1.20->1.30 would be noticed.

But it was relatively easy to change the price of the main course, even by bigger amounts, say from 22 to 26, nobody notices; especially if you also tweak the contents "fish with potatoes and asparagus" at CHF22 becomes "fish with rice and avocado" at CHF26. It's harder to compare the dishes than to compare 2 cups of black coffee.

Bringing it back to cars, what matters to the dealer/seller is the overall price. What matters most to the buyer should also be the overall price, which simplifies a big chunk of the decision process. Then you can spend some time looking at the product and preferences (you want to eat asparagus or avocado?).

What's funny is that even knowing this rationally, I still fall into same trap. Builder priced a job with 2 components: overall price was fine. His price for part-A was much cheaper than expected, his price for part-B was a bit dearer than expected. It annoyed me so much to look at price on part-B, even though I was happy with the overall bill.

grogi

acronym Chilli wrote: »

I know.
It's like road tax.

An anecdote from a marketing prof I had, where he emphasised the importance of what you charged on. He grew up in Switzerland and family had a local restaurant. From a business point of view: if diner went in, and ate "a salad, fish with potatoes and asparagus, chocolate ice-cream and an espresso"; what matters to the restaurant was what money they paid on the final bill. Say that was CHF56.
What he said was that, at least in Switzerland, people were very particular about the price of a coffee. Say that was CHF1.20. If the restaurant wanted to get an extra franc out of their customer, they could put the price of the coffee up from 1.20 to 2.20; but if they did that customers would be super annoyed and they'd all be complaining to each other about "who do they think they are", "that's crazy money", "coffee in the place down the street is only 1.15", etc., Even a small change would annoy people: 1.20->1.30 would be noticed.

But it was relatively easy to change the price of the main course, even by bigger amounts, say from 22 to 26, nobody notices; especially if you also tweak the contents "fish with potatoes and asparagus" at CHF22 becomes "fish with rice and avocado" at CHF26. It's harder to compare the dishes than to compare 2 cups of black coffee.

Classic example of Penny wise, pound foolish

Bringing it back to cars, what matters to the dealer/seller is the overall price. What matters most to the buyer should also be the overall price, which simplifies a big chunk of the decision process. Then you can spend some time looking at the product and preferences (you want to eat asparagus or avocado?).

What's funny is that even knowing this rationally, I still fall into same trap. Builder priced a job with 2 components: overall price was fine. His price for part-A was much cheaper than expected, his price for part-B was a bit dearer than expected. It annoyed me so much to look at price on part-B, even though I was happy with the overall bill.

Realizing how you react to marketing strategies is first step to starting taking advantage of them.

acronym Chilli

grogi wrote: »

Classic example of Penny wise, pound foolish

absolutely. And also a bias where we latch onto things because we feel able to analyse them, even if not that important. With the coffee: if it's 1.20, you could not possibly be more than 1.20 over-charged for it, so it can't be that important. Yet it is easy to remember what a "coffee should cost" and bring that handy benchmark around in your head.

Realizing how you react to marketing strategies is first step to starting taking advantage of them.

Yep. And coming back to the cars example, the car dealer works with these deals every day and knows the ropes. The more complex it is, the more likely he is to be able to achieve his goals at the (unwitting) expense of the buyer.

grogi

acronym Chilli wrote: »

coming back to the cars example, the car dealer works with these deals every day and knows the ropes. The more complex it is, the more likely he is to be able to achieve his goals at the (unwitting) expense of the buyer.

PCP helps them a lot. It hides future liabilities under very well formed terms, such as GUARANTEED FUTURE VALUE. Not only I pay very little monthly, they guarantee the future value! How awesome it is!

artheb

grogi wrote: »

PCP helps them a lot. It hides future liabilities under very well formed terms, such as GUARANTEED FUTURE VALUE. Not only I pay very little monthly, they guarantee the future value! How awesome it is!

Not sure if this negative or positive comment. PCP is a product same way as any other loan HP or Personal. There are always hidden charges. The main point is that if you understand it you may get a newer car on lower interest with lower monthly repayments.

indizzle

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

I wonder was that my old A6. Is there a 000 in the reg? Anyway, I got a new 152 A6 sline black edition 190bhp on PCP. Had it 1.5 yrs when I got a call from the dealer. I did a swap for a brand new 171 back in April, same spec but with self park etc. Paid 1,250euro difference, mine had around 22k on the clock. Dealer told me that new models are harder to shift and that their are people who want a good spec car a year or two old so he was happy to flip my car and sell (new PCP) me a new one so he was quids in on target and I was a happy camper. The 152 needed a service and 4 new tyres plus I was heading over the agreed 15k per annum although they told me not to worry about that, milage really only comes into play when it's seriously excessive or you are moving away from Audi to another brand. Dealer told me the new model was coming out next year and he would give me a shout to see if a similar deal could be done, I'll be waiting for that call.

artheb

indizzle wrote: »

I wonder was that my old A6. Is there a 000 in the reg? Anyway, I got a new 152 A6 sline black edition 190bhp on PCP. Had it 1.5 yrs when I got a call from the dealer. I did a swap for a brand new 171 back in April, same spec but with self park etc. Paid 1,250euro difference, mine had around 22k on the clock. Dealer told me that new models are harder to shift and that their are people who want a good spec car a year or two old so he was happy to flip my car and sell (new PCP) me a new one so he was quids in on target and I was a happy camper. The 152 needed a service and 4 new tyres plus I was heading over the agreed 15k per annum although they told me not to worry about that, milage really only comes into play when it's seriously excessive or you are moving away from Audi to another brand. Dealer told me the new model was coming out next year and he would give me a shout to see if a similar deal could be done, I'll be waiting for that call.

No 000 in the Reg. However description would match the car
It looked like two tyres were changed couple months before the trade in. Front and rear were different brands. I did not like the ride on the initial tyres. I got 4 new goodyears and they transformed the car.

dil999

I recently did another PCP on a new car. This is definitely the best way to purchase a new car. A couple of important points that have been mentioned here that I can vouch for from experience.
1: A PCP in a financial arrangement for the purchase of a car at the present time. Nothing more nothing less. Its got nothing to do with buying a car in 3 years time.
2: Put in the minimum deposit, don't tie up your cash in a car.
3: If the monthly payments are too high with the minimum deposit, the reality is you can't afford the car. go for a different car.
4 Make the assumption that there will be no 'equity' in your car at the end. You won't be disappointed.
5 A car is an expense, not an asset. You buy a car to get you to work or school or wherever. It should not be thought of as a financial investment. in other words to repeat point 2, don't tie up your cash in a car. Tie up someone else's.

maidhc

dil999 wrote: »

I recently did another PCP on a new car. This is definitely the best way to purchase a new car. A couple of important points that have been mentioned here that I can vouch for from experience.
1: A PCP in a financial arrangement for the purchase of a car at the present time. Nothing more nothing less. Its got nothing to do with buying a car in 3 years time.
2: Put in the minimum deposit, don't tie up your cash in a car.
3: If the monthly payments are too high with the minimum deposit, the reality is you can't afford the car. go for a different car.
4 Make the assumption that there will be no 'equity' in your car at the end. You won't be disappointed.
5 A car is an expense, not an asset. You buy a car to get you to work or school or wherever. It should not be thought of as a financial investment. in other words to repeat point 2, don't tie up your cash in a car. Tie up someone else's.

Call me old fashioned, but I think the only way to purchase a car is just to buy it outright. The pcps don't add up at all as a long term proposition, and I do understand them and studied them in some detail.

dil999

maidhc wrote: »

Call me old fashioned, but I think the only way to purchase a car is just to buy it outright. The pcps don't add up at all as a long term proposition, and I do understand them and studied them in some detail.

They are not a long term proposition. They are a 37 month loan arrangement that gives you the most cost effective and risk free way to buy your car outright. If you decide after three years the car is not for you, you don't have to worry about selling it. Hand it back and buy a different one.

If you plan to buy a new car every three years you would be crazy to pay for it all upfront. Think of it this way, You want to buy a 30K car and keep it for 3 years. The value of the car after 3 years may be 12K (40% is a pretty good estimate) would you:
a) give the garage 30K and wait for 3 years then hopefully get 12K back in a trade in
b) give the garage 3K up front, 420 a month over the next 3 years and then have the option to buy the car for 12K, or if you want, walk away.

30K car cost example based on 3.9% PCP and AIB carloan 8.95%
1) buy the car upfront: 10% deposit, 27K 60 month loan from AIB. Total interest 6.5K over 5 years
2) PCP 10% upfront, and then borrow the final 12K from AIB over 2 years - Total interest 3.4K over 5 years

I know which I would do.

Lantus

maidhc wrote:

Call me old fashioned, but I think the only way to purchase a car is just to buy it outright. The pcps don't add up at all as a long term proposition, and I do understand them and studied them in some detail.

My total cost analysis of a variety of car loans and financial products showed PCP to be cheaper for the car I was looking at even compared to 2nd hand cars.

But there will be variation as you look at different makes and models. It's also highly dependant on the type of car you need and its importance for you.

I commute 100km a day and pick up and drop off kids so reliability is a huge factor. Downtime in garages has a huge cost impact on my work and my family in terms of planning and stress. I don't even factor that into my cost analysis.

Traditional loans tend to have higher interest rates and if it suits your circumstances go for it.

Cars are depreciating lumps of metal that one way or another you need to throw money at to run.

I owned a car for years and it was great as I had no loan. But that cars value was 1k when I went to trade it in so swings and roundabouts.

Sweeping statements about one product being better than another are akin to the false assumption that running a diesel car is cheaper than petrol. A mantra most people espouse without thinking about. Most of my cost analysis shows it to be more expensive in many cases. But that doesn't stop old indoctrinated ways of thinking being triggered.

acronym Chilli

dil999 wrote: »

have the option to get at least 12K back as a trade in or buy the car for 12K, or if you want, walk away.

Second and third parts are fine, but first is not: you don't have the car as a 12k trade in after 3 years. You still have the outstanding debt, which is why you might hand car back to clear debt, or why you would pay money to clear debt and hang onto car.

PCP might be a grand option, might even be best in many situations, but it's not the only way, Lantus's post shows right approach/mind-set: get the details and Ts&Cs straight, run the numbers, find the optimum, tweak it with intangibles if necessary (e.g. reliability/disruption/etc.,) and then make a decision.

Casati

acronym Chilli wrote: »

Second and third parts are fine, but first is not: you don't have the car as a 12k trade in after 3 years. You still have the outstanding debt, which is why you might hand car back to clear debt, or why you would pay money to clear debt and hang onto car.

PCP might be a grand option, might even be best in many situations, but it's not the only way, Lantus's post shows right approach/mind-set: get the details and Ts&Cs straight, run the numbers, find the optimum, tweak it with intangibles if necessary (e.g. reliability/disruption/etc.,) and then make a decision.

The main advantage pcp brings is the low interest rate offered. You simply can't get 0% or even 1.9% outside of this dealer financing. As long as you are not paying the interest up front by not getting a discount a cash buyer would get I don't see any downside at all

Sam Kade

Casati wrote: »

The main advantage pcp brings is the low interest rate offered. You simply can't get 0% or even 1.9% outside of this dealer financing. As long as you are not paying the interest up front by not getting a discount a cash buyer would get I don't see any downside at all

You're only getting 0% finance on a third of the cost of the car as you pay a third up front and the balloon payment at the end.

SteelyDanJalapeno

Sam Kade wrote: »

You're only getting 0% finance on a third of the cost of the car as you pay a third up front and the balloon payment at the end.

Not sure you're correct there!

carsfan2

Sam Kade wrote: »

You're only getting 0% finance on a third of the cost of the car as you pay a third up front and the balloon payment at the end.

If 0% finance available, the logical thing is to put minimal deposit of 10% in and then you get 0% interest rate on the other 90%.