PCP finance.

maidhc

Ivefoundgod wrote: »

Anecdotal evidence is not evidence. You might have no problem heading to the UK to get a bargain but the majority have no interest in doing that. Yes there are greater numbers heading to UK/NI but to say that this means that the equity is gone from PCP deals is frankly ridiculous. If that really was the case the Irish motor industry would be in full meltdown mode, that clearly isn't the case.

Both of your posts are "i doubt" and "i did", not evidence or proof of anything and are at best misguided.

So the value of sterling and consequential increase in the supply of second hand cars won't cause a decrease in the value (equity) of the cars already on the road?

Also the fickle vagaries of the human condition will probably cause people to spurn diesel as already mentioned.

I speak not of anecdotal evidence but economics. There will be no equity, accept it and move on!

dil999

maidhc wrote: »

So the value of sterling and consequential increase in the supply of second hand cars won't cause a decrease in the value (equity) of the cars already on the road?

Also the fickle vagaries of the human condition will probably cause people to spurn diesel as already mentioned.

I speak not of anecdotal evidence but economics. There will be no equity, accept it and move on!

In fact, this is one of the advantages of PCP. You are protected from falling residual values, because to have a Guaranteed Minimum Future Value GMFV.

Its very likely that there will be a resurgence in the value of Irish second hand cars in 3 years time due to the UK leaving the EU, I would think that it will be very difficult if not impossible to legally import a car from the UK.

If this is the case, with PCP you will benefit from the upside. As you will be able to purchase your 3 year old car for less than the market value

Bottom line is treat PCP as a loan to buy a car. you will pay 10% upfront and 50% plus any interest in payments over 3 years. The cost is 60% of the price of the car plus interest over 3 years.

Equity and trade in values really have nothing to do with the financial arrangement.

maidhc

dil999 wrote: »

In fact, this is one of the advantages of PCP. You are protected from falling residual values, because to have a Guaranteed Minimum Future Value GMFV.

Its very likely that there will be a resurgence in the value of Irish second hand cars in 3 years time due to the UK leaving the EU, I would think that it will be very difficult if not impossible to legally import a car from the UK.

If this is the case, with PCP you will benefit from the upside. As you will be able to purchase your 3 year old car for less than the market value

Bottom line is treat PCP as a loan to buy a car. you will pay 10% upfront and 50% plus any interest in payments over 3 years. The cost is 60% of the price of the car plus interest over 3 years.

Equity and trade in values really have nothing to do with the financial arrangement.

I agree that once people treat PCP as a loan (that might or not be more expensive than other loans) they are fine. If they buy into equity and other magic beans it sounds like 2007 all over again.

dil999

maidhc wrote: »

I agree that once people treat PCP as a loan (that might or not be more expensive than other loans) they are fine. If they buy into equity and other magic beans it sounds like 2007 all over again.

I forgot to mention of course if you don't want to hand back the car, you also have to pay off the 40% at the end. You can do this by using your own cash, or selling the car and using the proceeds to pay off the remainder. This can be privately or to a garage as part of a trade in.

The finance company don't care about how you pay off the 40%, and if you hand the car back, you hand it back to the finance company.

Cyrus

maidhc wrote: »

With the value coming in from the U.K. At the moment you can forget equity right now.

At the moment the dealer's are still incentivised to sell new cars

I traded a 152 Audi a5 (now a superceded model ) last week against a new mercedes glc and got a very strong trade in

dil999

Cyrus wrote: »

At the moment the dealer's are still incentivised to sell new cars

I traded a 152 Audi a5 (now a superceded model ) last week against a new mercedes glc and got a very strong trade in

It does depend on the car. The A5 would have much higher residual value than a standard mid size family car. How much discount did you get on the list price? My experience was the "strong trade in" values included the dealers discount. I would be expecting 8 to 10% off list.

Cyrus

dil999 wrote: »

It does depend on the car. The A5 would have much higher residual value than a standard mid size family car. How much discount did you get on the list price? My experience was the "strong trade in" values included the dealers discount. I would be expecting 8 to 10% off list.

Obviously as it was a trade in the discount was included in the trade value but I was happy with the trade in having compared it to what was offered at a number of other marques incl BMW Audi and jaguar

I was happy to buy one of 3 different cars so that helped but dealers are still keen to sell new cars and in order to do that they need to prop up used trades

That may change but maidhcs assertion was incorrect in my case ( and remember I was reading a superceded model as well )

dil999

Cyrus wrote: »

Obviously as it was a trade in the discount was included in the trade value but I was happy with the trade in having compared it to what was offered at a number of other marques incl BMW Audi and jaguar

I was happy to buy one of 3 different cars so that helped but dealers are still keen to sell new cars and in order to do that they need to prop up used trades

That may change but maidhcs assertion was incorrect in my case ( and remember I was reading a superceded model as well )

Not necessarily. The trade in value that the dealer said he was giving you was not a trade in value if it included the discount. The real trade in value was probably 5K less than that.

When it comes to PCP its important that you know the actual trade in value, (the trade price) if that trade price is less than the GMFV then you are better off giving back the car. You can then start again and you will get all the dealer discounts in full.

jca

dil999 wrote: »

Not necessarily. The trade in value that the dealer said he was giving you was not a trade in value if it included the discount. The real trade in value was probably 5K less than that.

When it comes to PCP its important that you know the actual trade in value, (the trade price) if that trade price is less than the GMFV then you are better off giving back the car. You can then start again and you will get all the dealer discounts in full.

Start again with what? In the real world where people don't have pockets stuffed with fifties they're depending on the car as their deposit to either start their first PCP or continue into a following PCP.

dil999

jca wrote: »

Start again with what? In the real world where people don't have pockets stuffed with fifties they're depending on the car as their deposit to either start their first PCP or continue into a following PCP.

Unfortunately if you want a new car you have to pay for it. PCP is not a magic formula that generates value out of old cars. You need a deposit and you need to be able to pay the monthly payments, and you need to be able to do that every 3 years.
If you get a bit extra in a trade in or sale of the previous car, then great. but if you are relying on that you will be in trouble

jca

dil999 wrote: »

Unfortunately if you want a new car you have to pay for it. PCP is not a magic formula that generates value out of old cars. You need a deposit and you need to be able to pay the monthly payments, and you need to be able to do that every 3 years.
If you get a bit extra in a trade in or sale of the previous car, then great. but if you are relying on that you will be in trouble

If you buy the right car, keep the initial deposit around the 15% and know what the balloon payment is you should be able to go into another PCP with some equity plus about 2000. That's how it looks for me anyway. The example posted earlier with the huge deposit, tiny monthlies and big balloon is doomed to failure, but I think the poster knows that already.

Cyrus

dil999 wrote: »

Not necessarily. The trade in value that the dealer said he was giving you was not a trade in value if it included the discount. The real trade in value was probably 5K less than that.

When it comes to PCP its important that you know the actual trade in value, (the trade price) if that trade price is less than the GMFV then you are better off giving back the car. You can then start again and you will get all the dealer discounts in full.

if you hand the car back you have no deposit so you start from scratch get the discounts and then you have to come up with a 10-15 percent deposit

I didn't have to come up with anything as my deposit was my trade in so I just continue with a monthly payment I am happy with .

So while you have a point in theory in practice it's probably not as clear cut as you try to make it

Cyrus

dil999 wrote: »

Not necessarily. The trade in value that the dealer said he was giving you was not a trade in value if it included the discount. The real trade in value was probably 5K less than that.

When it comes to PCP its important that you know the actual trade in value, (the trade price) if that trade price is less than the GMFV then you are better off giving back the car. You can then start again and you will get all the dealer discounts in full.

In any event if the real trade in was 5k less than I got it was still a strong value in my opinion, but it varied greatly between different marques

dil999

Cyrus wrote: »

if you hand the car back you have no deposit so you start from scratch get the discounts and then you have to come up with a 10-15 percent deposit

I didn't have to come up with anything as my deposit was my trade in so I just continue with a monthly payment I am happy with .

So while you have a point in theory in practice it's probably not as clear cut as you try to make it

Assuming you didn't owe anything on your A5 then the trade value of that car was your deposit. If you decide to use a PCP in 2 or 3 years time you will need to come up with close to that same value in cash to maintain the same payments on your next PCP

dil999

Cyrus wrote: »

In any event if the real trade in was 5k less than I got it was still a strong value in my opinion, but it varied greatly between different marques

The trade in value was almost certainly the same. They all would have called the same trade dealers to price your car. What varied was the discounts you were being offered.

In the end of the day you got a car you were happy with, at a price you were happy with. and the very best of luck with it.

Lantus

For pcp to stop working as intended the 2nd hand value of cars has to decrease by a reasonable margin.

UK imports is strong but as a percentage of total sales is it enough to affect the overall market?

Short term slightly but long term doubtful that once brexit has concluded we will as easily import cars from overseas.

I will give my dealer a shout and enquire on terms for a new PCP based on my current car. If he starts to sweat and stutter then I'll know it's all tits up. Ford Skoda and Toyota have the highest residuals so luckily I'm in that group which may help?

Cyrus

dil999 wrote: »

Assuming you didn't owe anything on your A5 then the trade value of that car was your deposit. If you decide to use a PCP in 2 or 3 years time you will need to come up with close to that same value in cash to maintain the same payments on your next PCP

I did it was coming off an existing PCP

Hence my point what I was offered left plenty of deposit v the gmfv

dil999

Lantus wrote: »

For pcp to stop working as intended the 2nd hand value of cars has to decrease by a reasonable margin.

UK imports is strong but as a percentage of total sales is it enough to affect the overall market?

Short term slightly but long term doubtful that once brexit has concluded we will as easily import cars from overseas.

I will give my dealer a shout and enquire on terms for a new PCP based on my current car. If he starts to sweat and stutter then I'll know it's all tits up. Ford Skoda and Toyota have the highest residuals so luckily I'm in that group which may help?

If the UK is not in the EU, you won't be importing cars from there without additional customs duties. All the finance companies have to do is adjust the GMFV to allow for changes in the second hand car market.

dil999

Cyrus wrote: »

I did it was coming off an existing PCP

Hence my point what I was offered left plenty of deposit v the gmfv

As I mentioned before, I think the A5 has higher residual %s than a standard family car. Also with a 50K Merc the dealer has a tonne of margin to play with. So your deposit was probably a mixture of excess value of trade in and discount.

My own experiece of trading in a 151, 30K common or garden family car was a 15K trade in (real trade in value) vs 13.7K left to pay off, so I had 1.3K to add to my deposit. That 1.3K is approx 4% of the value of the car. If anyone is thinking 10% to 15% they will be sorely dissapointed at the end of their term.

Lantus

dil999 wrote:

My own experiece of trading in a 151, 30K common or garden family car was a 15K trade in (real trade in value) vs 13.7K left to pay off, so I had 1.3K to add to my deposit. That 1.3K is approx 4% of the value of the car. If anyone is thinking 10% to 15% they will be sorely dissapointed at the end of their term.

So how did the dealer explain this?

As the main deposit is 10% did they indicate that an additional 6pc would be needed to roll over?

What was your reaction? (I'd blow a fuse...) And if you don't mind what make and model is this?

maidhc

Lantus wrote: »

So how did the dealer explain this?

As the main deposit is 10% did they indicate that an additional 6pc would be needed to roll over?

What was your reaction? (I'd blow a fuse...) And if you don't mind what make and model is this?

Why blow a fuse? If you actually do the sums this is how things calculate. You can't have a €30,000 car for €300pm. If you simply take the lifespan of a car as 7 years (not unreasonable imo given Revenue rules), the capital cost is €360pm forgetting the cost of credit.

Cyrus

dil999 wrote: »

As I mentioned before, I think the A5 has higher residual %s than a standard family car. Also with a 50K Merc the dealer has a tonne of margin to play with. So your deposit was probably a mixture of excess value of trade in and discount.

My own experiece of trading in a 151, 30K common or garden family car was a 15K trade in (real trade in value) vs 13.7K left to pay off, so I had 1.3K to add to my deposit. That 1.3K is approx 4% of the value of the car. If anyone is thinking 10% to 15% they will be sorely dissapointed at the end of their term.

i think you over estimate the margin on new cars for dealers, and i have some pretty reliable information on that front.

i take your point re the a5 versus say a mondeo but i can only put forward my recent experience.

dil999

Lantus wrote: »

So how did the dealer explain this?

As the main deposit is 10% did they indicate that an additional 6pc would be needed to roll over?

What was your reaction? (I'd blow a fuse...) And if you don't mind what make and model is this?

I changed from a Mondeo to a Passat. The trade in value was exactly the same with the ford dealer for a new Mondeo, It was more or less what I was expecting.

Wrt PCP the concept of roll over is meaningless. The loan is the loan and has to be paid off. The trade value of the car is the trade value of the car and you won't get a penny more for it. You are starting again with a new loan for a new car.

You may get a trade in higher than the GMFV, you may not. You may sell the car for for more than your GMFV, you may not. The only thing you are guaranteed is that the maximum you will have to pay at the end is the GMFV.

dil999

Cyrus wrote: »

i think you over estimate the margin on new cars for dealers, and i have some pretty reliable information on that front.

i take your point re the a5 versus say a mondeo but i can only put forward my recent experience.

There is the dealers margin, and then there is the list price vs the recommended selling price. The latter is generally 5% to 10% and with some brands it can be more. I don't have experience buying Mercs but perhaps the list versus recommended is at the lower end for the luxury brands.

vintagevrs

dil999 wrote: »

Wrt PCP the concept of roll over is meaningless. The loan is the loan and has to be paid off. The trade value of the car is the trade value of the car and you won't get a penny more for it. You are starting again with a new loan for a new car.

Well said

MidMan25

I find it hard to see dealers ending up in a situation where people are coming back to them at the end of the 3 years and they are having to tell them that they'll need to find 10% deposit (2 - 3k for the average family car) as they don't have any equity in their own. This scenario would make a new car a much harder sale and would lead to more people just refinancing the remainder which is not good for the manufacturer or dealer.
Having said that, if someone offered me 10% equity when I trade in my car next year, i'd bite their hand off!

maidhc

MidMan25 wrote: »

I find it hard to see dealers ending up in a situation where people are coming back to them at the end of the 3 years and they are having to tell them that they'll need to find 10% deposit (2 - 3k for the average family car) as they don't have any equity in their own. This scenario would make a new car a much harder sale and would lead to more people just refinancing the remainder which is not good for the manufacturer or dealer.
Having said that, if someone offered me 10% equity when I trade in my car next year, i'd bite their hand off!

Manufacturers will just need to discount. Not really a sustainable solution for anyone as is is just a vicious cycle.

The discounts are flying already. I got a 10% or so discount on a 172 Astra. The dealer we bought from was honest enough to say it was a discount and we were getting about €800 for the trade in. The other tried to convince us he was giving 4K for an 06 Astra that had 300k on the clock, no NCT and a failed ABS unit.

Expand the figures to Mercedes money and you see what is happening!

Lantus

Duffryman wrote:

Think we'll go see about a test drive.....

MidMan25 wrote:

I find it hard to see dealers ending up in a situation where people are coming back to them at the end of the 3 years and they are having to tell them that they'll need to find 10% deposit (2 - 3k for the average family car) as they don't have any equity in their own. This scenario would make a new car a much harder sale and would lead to more people just refinancing the remainder which is not good for the manufacturer or dealer. Having said that, if someone offered me 10% equity when I trade in my car next year, i'd bite their hand off!

Agreed, I'd just refinance for 3 years and then trade in the car after that. I don't have magic cash in addition to the car. Even if people ventured back into a new car that's a 50% drop in new car sales.

We had no issue with Mrs lantus car in Jan. Just started a new deal with slightly higher monthlys reflecting a very slight increase in car price and a slightly higher deposit initially. (18 to 20pc from memory.)

She wants to keep car anyway which is fine and I am not fussed either way.

mickdw

dil999 wrote: »

My own experiece of trading in a 151, 30K common or garden family car was a 15K trade in (real trade in value) vs 13.7K left to pay off, so I had 1.3K to add to my deposit. That 1.3K is approx 4% of the value of the car. If anyone is thinking 10% to 15% they will be sorely dissapointed at the end of their term.

You traded in early. That makes little sense. That has to be costing you additional money plus a mondeo was never going to be a winner in terms of retained value.
Id wager if you keep your passat 3 years, you will have more than 1.3k equity. If on the other hand you sell after 18 months, you probsbly wont break even.

artheb

mickdw wrote: »

You traded in early. That makes little sense. That has to be costing you additional money plus a mondeo was never going to be a winner in terms of retained value.
Id wager if you keep your passat 3 years, you will have more than 1.3k equity. If on the other hand you sell after 18 months, you probsbly wont break even.

Not necessarily. I think trading in early makes sense if you do more mileage. I plan to trade after 2 years. My PCP is on second hand 2 year old car.

dil999

mickdw wrote: »

You traded in early. That makes little sense. That has to be costing you additional money plus a mondeo was never going to be a winner in terms of retained value.
Id wager if you keep your passat 3 years, you will have more than 1.3k equity. If on the other hand you sell after 18 months, you probsbly wont break even.

Thats a myth. Mondeo's residual % are slightly higher than the equivalent Passat. I'll take your wager and double you.
I did extensive research into the trade in values before I changed, including with some friends in the trade, I am more than confident that I hit the sweet spot in terms of trade in.
I know that residuals are a little higher in Ireland, but here's a link to WV's UK fleet management site where they compare cost of ownership of different brands. Compare the Passat residuals vs Mondeo residuals

http://www.volkswagencomparison.co.uk/private-customer?kee=530691

lcstress2012

Quick question about pcp. I have a 171 Ford Fiesta on pcp at the end of the 36 months the guaranteed minimum future value (gmfv) of the car is €7,000. If I want to keep the car do I have to pay if the gmfv in full or can I pay it by the month ?

Cyrus

lcstress2012 wrote: »

Quick question about pcp. I have a 171 Ford Fiesta on pcp at the end of the 36 months the guaranteed minimum future value (gmfv) of the car is €7,000. If I want to keep the car do I have to pay if the gmfv in full or can I pay it by the month ?

you would have to refinance it with someone,

dealer will do it for you im sure, but check around for the best interest rate

artheb

lcstress2012 wrote: »

Quick question about pcp. I have a 171 Ford Fiesta on pcp at the end of the 36 months the guaranteed minimum future value (gmfv) of the car is €7,000. If I want to keep the car do I have to pay if the gmfv in full or can I pay it by the month ?

You can finance it with credit union or bank. Which ever suits you better.

jca

lcstress2012 wrote: »

Quick question about pcp. I have a 171 Ford Fiesta on pcp at the end of the 36 months the guaranteed minimum future value (gmfv) of the car is €7,000. If I want to keep the car do I have to pay if the gmfv in full or can I pay it by the month ?

Surely you should have researched this before entering the deal, but to answer your question, yes you can re-finance the outstanding amount, the interest rates can be higher so make sure to ask as you might get better rates from other lenders.

artheb

jca wrote: »

Surely you should have researched this before entering the deal, but to answer your question, yes you can re-finance the outstanding amount, the interest rates can be higher so make sure to ask as you might get better rates from other lenders.

You are correct here. It should be researched. However it is also another example that salesmen do not provide full information on how PCP works.

In example, I was told that I can do top up to balloon payment during 3 year contract. When I rang VW bank they told me that they used to do that but not anymore. I let the salesman know about it. I would expect they would be up to date with the lending terms and conditions.

mickdw

dil999 wrote: »

Thats a myth. Mondeo's residual % are slightly higher than the equivalent Passat. I'll take your wager and double you.
I did extensive research into the trade in values before I changed, including with some friends in the trade, I am more than confident that I hit the sweet spot in terms of trade in.
I know that residuals are a little higher in Ireland, but here's a link to WV's UK fleet management site where they compare cost of ownership of different brands. Compare the Passat residuals vs Mondeo residuals

http://www.volkswagencomparison.co.uk/private-customer?kee=530691

Whats all this uk stuff. This is Ireland.
So you dont believe your passat will be worth more than 1300 above gfv at 3 years old? Do you do huge mileage or do you destroy your cars?
Im talking trade in offer against a new vw, not price within the trade!
Trading early might seem like a good idea but alot of people dont realise that they are after throwing their deposit away over 2 years instead of 3 years by going back early. It can make sense if there is good equity over and above amount owed being offered or if your model is soon to be obsolete but in the case of little equity being available, trading in early is lunacy.

artheb

mickdw wrote: »

Whats all this uk stuff. This is Ireland.
So you dont believe your passat will be worth more than 1300 above gfv at 3 years old? Do you do huge mileage or do you destroy your cars?
Im talking trade in offer against a new vw, not price within the trade!
Trading early might seem like a good idea but alot of people dont realise that they are after throwing their deposit away over 2 years instead of 3 years by going back early. It can make sense if there is good equity over and above amount owed being offered or if your model is soon to be obsolete but in the case of little equity being available, trading in early is lunacy.

New deposit should be smaller if you trade earlier. 2 year old car would be worth more than 3 years old. Have a look at this post. Guy traded 151 A6 for 171 A6 with higher spec paying 1250e.

maidhc

artheb wrote: »

New deposit should be smaller if you trade earlier. 2 year old car would be worth more than 3 years old. Have a look at this post. Guy traded 151 A6 for 171 A6 with higher spec paying 1250e.

Sweet mother of Jesus. He also commited to at least a year and a half of payments, maybe 10k or more.

The aim should be to not have a monthly repayment!

morrga

PCP is disguised as a rental scheme designed to provide repeat business every 3 years. Over 15 years you could have 5 cars and never owned it once yet made a repayment every month for 180 months.

Get a credit union loan and at least have the option of owning it outright.

Second hand market is going to be a dream for buyers in 2/3 years as the first batch of cars come on to the market.

artheb

maidhc wrote: »

Sweet mother of Jesus. He also commited to at least a year and a half of payments, maybe 10k or more.

The aim should be to not have a monthly repayment!

Sorry if I missed the point but are we not talking about PCP rollover? I am talking about moving from one PCP to another PCP with as little new deposit as possible. What are you talking about?

artheb

morrga wrote: »

PCP is disguised as a rental scheme designed to provide repeat business every 3 years. Over 15 years you could have 5 cars and never owned it once yet made a repayment every month for 180 months.

Get a credit union loan and at least have the option of owning it outright.

Second hand market is going to be a dream for buyers in 2/3 years as the first batch of cars come on to the market.

First batch of the cars have already hit the market.

Cyrus

maidhc wrote: »

Sweet mother of Jesus. He also commited to at least a year and a half of payments, maybe 10k or more.

The aim should be to not have a monthly repayment!

did he not get a brand new car?

artheb

Cyrus wrote: »

did he not get a brand new car?

He did.

Cyrus

morrga wrote: »

PCP is disguised as a rental scheme designed to provide repeat business every 3 years. Over 15 years you could have 5 cars and never owned it once yet made a repayment every month for 180 months.

Get a credit union loan and at least have the option of owning it outright.

Second hand market is going to be a dream for buyers in 2/3 years as the first batch of cars come on to the market.

so you rent a car for 15 years, over the 15 years you have 5 new cars, all covered by warranty, potentially never have to buy a set of tyres or have any unforeseen expense

no one is saying its the cheapest way of doing it, buts convenient.

if you want to be pragmatic everyone should be buying from the luxobarges thread (which is where id go if i needed a second car)

artheb

Cyrus wrote: »

so you rent a car for 15 years, over the 15 years you have 5 new cars, all covered by warranty, potentially never have to buy a set of tyres or have any unforeseen expense

no one is saying its the cheapest way of doing it, buts convenient.

if you want to be pragmatic everyone should be buying from the luxobarges thread (which is where id go if i needed a second car)

Exactly! That's why I think it is suitable for those who need reliability. I dont mind paying for using the car. I do mind paying for repairing it.

R.O.R

maidhc wrote: »

The aim should be to not have a monthly repayment!

Why?

maidhc

Cyrus wrote: »

so you rent a car for 15 years, over the 15 years you have 5 new cars, all covered by warranty, potentially never have to buy a set of tyres or have any unforeseen expense

Woe betide droppping €800 on a set of tyres?

At the end of 15 years you have dropped probably €120k with nothing to show for it. My father has an 02 Avensis from new, in 15 years it has cost €25k plus the odd set of tyres, oils and a second hand gearbox. I'm not saying driving a 15 year old Avensis is for everyone, but pcp shouldn't be sold as a CHEAP way to own a car.

Incidentally the cheapest way to run a car I think is to buy new or very fresh for cash, maintain it well, and run it into retirement.

R.O.R wrote: »

Why?

Maybe old fashioned, but I personally prefer to own my car outright. I'm all for borrowing for commercial reasons, and have a few business loans for buildings etc, but I'll pass on something as frivolous as a car. It is only a step away from buying a new washing machine on the drip...

Cyrus

maidhc wrote: »

Woe betide droppping €800 on a set of tyres?

At the end of 15 years you have dropped probably €120k with nothing to show for it. My father has an 02 Avensis from new, in 15 years it has cost €25k plus the odd set of tyres, oils and a second hand gearbox. I'm not saying driving a 15 year old Avensis is for everyone, but pcp shouldn't be sold as a CHEAP way to own a car.

Incidentally the cheapest way to run a car I think is to buy new or very fresh for cash, maintain it well, and run it into retirement.



Maybe old fashioned, but I personally prefer to own my car outright. I'm all for borrowing for commercial reasons, and have a few business loans for buildings etc, but I'll pass on something as frivolous as a car. It is only a step away from buying a new washing machine on the drip...

I wouldn’t want to drive an avensis for 15 years personally

Who said it’s cheap ? Anyone that thinks buying a new car is cheap is mad

But your argument isn’t against pcp it’s against buying new cars and the frivolity of it (in your mind )

I’ve run plenty of old cars generally performance ones so things like tyres and servicing meant they cost 2-3k a year to run besides the expensive insurance tax and fuel costs and I’ll do it again but in our current situation where we have one car pcp makes sense for us

artheb

maidhc wrote: »

Woe betide droppping €800 on a set of tyres?

Incidentally the cheapest way to run a car I think is to buy new or very fresh for cash, maintain it well, and run it into retirement.

.

Maybe you are one of those who have 30k laying around to be thrown on the car which will drop 50% of it's value within 3 years. That is ok. However not everyone can do that or does not want to do that or both. 0% APR is just build for that purpose. You can own the new car and paying for it as you use with 0% APR.

Maybe you are old fashioned. It is just a matter of time when you will see more goods sold as a service. You don't buy mobile phone, you don't buy skybox, you can have cloud storage instead of home server. You don't need to buy servers, you rent them either on premise or in the cloud.

Car is a service and that's why you have leasing for the companies. Since leasing is not allowed to private customers in Ireland they built PCP. Again I am not trying to convince you to PCP. I am just trying to show you a trend.