PCP finance.

jca

veryangryman wrote: »

Due to pay my balloon payment this week so then i own car outright.

What happens next? Do they send me a receipt, call me etc?

Anyone care to answer this person or is the GP rubbish going to go on for ages?

ELM327

jca wrote: »

Anyone care to answer this person or is the GP rubbish going to go on for ages?

I know RCI (Renault) send a letter a couple of months before the end of the PCP period inviting the final payment.
I presume others are the same?

veryangryman

ELM327 wrote: »

I know RCI (Renault) send a letter a couple of months before the end of the PCP period inviting the final payment.
I presume others are the same?

Ah yeah got all that, just wondering if i get some sort of documentation confirming that i now own the car, debt is cleared etc after the payment is taken.

ELM327

veryangryman wrote: »

Ah yeah got all that, just wondering if i get some sort of documentation confirming that i now own the car, debt is cleared etc after the payment is taken.

Once you make the final balloon payment you should be sent a receipt confirming the same.

Important to note: The balloon payment is not your last monthly payment, it's the remaining 20-40% of the car's price. It will not be taken automatically, you need to initiate the payment yourself.

acronym Chilli

Andres Slimy Staircase wrote: »

Most gps drive proper cars so no need for the condescending stuff.

My gp has always driven a golf gti, upgraded regulalry another gp in the area drives a Range Rover. I don't know many gp's driving rubbish old cars.

What tyres do they have?

dil999

ELM327 wrote: »

Once you make the final balloon payment you should be sent a receipt confirming the same.

Important to note: The balloon payment is not your last monthly payment, it's the remaining 20-40% of the car's price. It will not be taken automatically, you need to initiate the payment yourself.

My recent PCP is with VW bank. It is stated in my documentation that the final payment will be automatically deducted in month 37 from the account. I asked the finance person in the dealership also and they told be that is the case. I am 99% sure that it was the same situation in my previous PCP with Ford.

carloscorreia

dil999 wrote: »

My recent PCP is with VW bank. It is stated in my documentation that the final payment will be automatically deducted in month 37 from the account. I asked the finance person in the dealership also and they told be that is the case. I am 99% sure that it was the same situation in my previous PCP with Ford.

I think final payment is not the balloon.
In the end of the PCP you have 3 options (from volkswagen site)
https://www.volkswagen.ie/en/offers-and-finance/finance-explained0/pcp.html

Upgrade your car to a newer model using the equity in your car as a deposit for the next one

OR

Return your car to you dealer with no further payments

OR

Make a one-off payment or re-finance the final installment and take ownership of the car

ELM327

dil999 wrote: »

My recent PCP is with VW bank. It is stated in my documentation that the final payment will be automatically deducted in month 37 from the account. I asked the finance person in the dealership also and they told be that is the case. I am 99% sure that it was the same situation in my previous PCP with Ford.

Final payment is the last of the monthly payment, it is not the balloon.

You couldnt - say in the like of a premium car - send a DD to a user's account expecting 25-45k to be available!

For a Model S Tesla for instance, the PCP balloon payment is €45k

dil999

ELM327 wrote: »

Final payment is the last of the monthly payment, it is not the balloon.

You couldnt - say in the like of a premium car - send a DD to a user's account expecting 25-45k to be available!

For a Model S Tesla for instance, the PCP balloon payment is €45k

It is the Balloon Payment. It will automatically be debited out of my account in Month 37. I will be given a number of reminders prior to it happening.


They most certainly do expect it to be available. If you are planning to purchase the car, then you transfer in the €45K into the account before the payment date

ELM327

dil999 wrote: »

It is the Balloon Payment. It will automatically be debited out of my account in Month 37. I will be given a number of reminders prior to it happening.

As per their T+C you have to agree to that, it will not be taken automatically.
Additionally, before it is taken, you have to bring the car to them to be inspected and the mileage noted

https://www.volkswagen.ie/en/offers-and-finance/finance-explained0/pcp.html

At the end of a PCP contract, there are three options:
1. Part-exchange the vehicle for another vehicle of your choice;
2. Keep the current vehicle – pay the final instalment plus the ‘option to purchase fee’ and the car then belongs to you. Alternatively you can speak with a Volkswagen Bank Ireland customer care representative about options to extend the current finance agreement and repay the remaining amount (GMFV) over an agreed period;
3. Return the vehicle to the dealer with no further repayments.

jca

ELM327 wrote: »

As per their T+C you have to agree to that, it will not be taken automatically.
Additionally, before it is taken, you have to bring the car to them to be inspected and the mileage noted

https://www.volkswagen.ie/en/offers-and-finance/finance-explained0/pcp.html

At the end of a PCP contract, there are three options:
1. Part-exchange the vehicle for another vehicle of your choice;
2. Keep the current vehicle – pay the final instalment plus the ‘option to purchase fee’ and the car then belongs to you. Alternatively you can speak with a Volkswagen Bank Ireland customer care representative about options to extend the current finance agreement and repay the remaining amount (GMFV) over an agreed period;
3. Return the vehicle to the dealer with no further repayments.

How much is the “option to purchase fee” I can’t find a figure for that anywhere.

dil999

jca wrote: »

How much is the “option to purchase fee” I can’t find a figure for that anywhere.

There are 2 fees ar the start and end of €75 each. This is probably what the are talking about. In a 0% pcp three are no fees.

The stuff on the website is just basic info and marketing. Details are in the agreement documentation.

Casati

jca wrote: »

How much is the “option to purchase fee” I can’t find a figure for that anywhere.

That's the GMFV figure

What kind of interest rate are VW bank offering to extend I wonder?

Lantus

Casati wrote:

What kind of interest rate are VW bank offering to extend I wonder?

It's 3.9 generally.

dil999

Lantus wrote: »

It's 3.9 generally.

Are you referring to a rate to refinance the GMFV. If so 3.9% would be great I would guess though it's closer to or more than their HP rate, which is 5.9%. It would definitely be higher than the pcp rate. The dealer would prefer you to trade in and buy a new model than refinance the GMFV

dil999

Lantus wrote: »

It's 3.9 generally.

Are you referring to a rate to refinance the GMFV. If so 3.9% would be great I would guess though it's closer to or more than their HP rate, which is 5.9%. It would definitely be higher than the pcp rate. The dealer would prefer you to trade in and buy a new model than refinance the GMFV

arleitiss

Hopefully this is right place to ask.

Any comments/ideas on used cars PCP? (2012-2014)

I need new car soon (my 2001 golf is falling apart, recently failed dangerously NCT with brake fluid leaking, had it towed and fixed and passed, was given NCT until February) but I don't really have 10k in savings nor I have wish to put down 10k on 2017 PCP deposit.

Ideally - I would love to get PCP on some 2013/2014 and drive it for 3-4 years, then swap for 2017/2018 (this would be in 2021 now) and keep going this way.

I am not super crazy to get latest year but I would prefer something of beyond 2012.

Realistically - I can afford to repay 500-600 Euro monthly.

What about car loans? Do they require deposit?

(Another way I can think of is Personal loan but it's waaaay too high @ 11% APR)

dil999

ELM327 wrote: »

Additionally, before it is taken, you have to bring the car to them to be inspected and the mileage noted

https://www.volkswagen.ie/en/offers-and-finance/finance-explained0/pcp.html

They have no interest in the condition of the car if you are paying the GMFV.

Perhaps I'm the only person it's ever happened to, But they will be automatically taking the payment from my account. I had no choice, if I wished to proceed with the loan

I can't imagine that any finance company are going to allow the loanee to pay the final instalment i.e. the balloon payment any other way.

EndaHonesty

arleitiss wrote: »

Hopefully this is right place to ask.

Any comments/ideas on used cars PCP? (2012-2014)

I need new car soon (my 2001 golf is falling apart, recently failed dangerously NCT with brake fluid leaking, had it towed and fixed and passed, was given NCT until February) but I don't really have 10k in savings nor I have wish to put down 10k on 2017 PCP deposit.

Ideally - I would love to get PCP on some 2013/2014 and drive it for 3-4 years, then swap for 2017/2018 (this would be in 2021 now) and keep going this way.

I am not super crazy to get latest year but I would prefer something of beyond 2012.

Realistically - I can afford to repay 500-600 Euro monthly.

What about car loans? Do they require deposit?

(Another way I can think of is Personal loan but it's waaaay too high @ 11% APR)

You can buy a NEW Dacia Sandero on PCP from €99 per month with €3317 deposit. APR 5%.

A service pack is available for an extra €15.25 per month.

So no extra costs like servicing & NCT for 3 years. Just PCP, fuel, insurance and motor tax. So maybe €200-€300 per month total.

Your post above implies that you are not fussy about brands and just want a reliable car.

With deals like this Dacia one you'd be mad to spend €500-€600 per month on a used car.

26000 Elephants

EndaHonesty wrote: »

So no extra costs like servicing.... for 3 years.

Ah, you pay €550 for servicing.

Silly add-ons notwithstanding, thats still a reasonable deal if you are not fussy about cars.

mickdw

arleitiss wrote: »

Hopefully this is right place to ask.

Any comments/ideas on used cars PCP? (2012-2014)

I need new car soon (my 2001 golf is falling apart, recently failed dangerously NCT with brake fluid leaking, had it towed and fixed and passed, was given NCT until February) but I don't really have 10k in savings nor I have wish to put down 10k on 2017 PCP deposit.

Ideally - I would love to get PCP on some 2013/2014 and drive it for 3-4 years, then swap for 2017/2018 (this would be in 2021 now) and keep going this way.

I am not super crazy to get latest year but I would prefer something of beyond 2012.

Realistically - I can afford to repay 500-600 Euro monthly.

What about car loans? Do they require deposit?

(Another way I can think of is Personal loan but it's waaaay too high @ 11% APR)

Lots of options if you can afford 500 per month.
You could get a new polo on pcp with minimum deposit of around 1700 for under 300 per month. You could also get traditional hp on something similar owning the car over 5 years for well under your budget too, maybe 350 per month depending on rates.
You could borrow around 25k over 5 years for circa 500 per month.
Pcp options will depend on deposit but you could get a new passat with 3500 deposit on pcp for possibly low 400s.
Used pcp tend to have higher interest but seeing as you have a healthy monthly figure in mind, you can afford lots of different stuff.
A whole range of 3 year old cars are available to you at that budget regardless of finance type.

ELM327

dil999 wrote: »

They have no interest in the condition of the car if you are paying the GMFV.

Perhaps I'm the only person it's ever happened to, But they will be automatically taking the payment from my account. I had no choice, if I wished to proceed with the loan

I can't imagine that any finance company are going to allow the loanee to pay the final instalment i.e. the balloon payment any other way.

True actually re the condition.

But you must have to confirm the option to buy, ie that isnt the default option.

EndaHonesty

26000 Elephants wrote: »

Ah, you pay €550 for servicing.

Silly add-ons notwithstanding, thats still a reasonable deal if you are not fussy about cars.

It's not a silly add-on it's an optional payment.

How much would you expect servicing to cost for 3 years?

And don't bother with any main stealer cliches or self service hero stories :rolleyes:

arleitiss

EndaHonesty wrote: »

You can buy a NEW Dacia Sandero on PCP from €99 per month with €3317 deposit. APR 5%.

A service pack is available for an extra €15.25 per month.

So no extra costs like servicing & NCT for 3 years. Just PCP, fuel, insurance and motor tax. So maybe €200-€300 per month total.

Your post above implies that you are not fussy about brands and just want a reliable car.

With deals like this Dacia one you'd be mad to spend €500-€600 per month on a used car.

I have no particular car in mind as of yet, I kind of like Passat's but I assume deposit for those would be 10k or so?

dil999

ELM327 wrote: »

True actually re the condition.

But you must have to confirm the option to buy, ie that isnt the default option.

Why? You are taking out a loan. 37 monthly payments. The 37th is the balloon. Every loan I have ever taken out has all the payments debited out of my account. You hardly think volkswagen bank are going to wait around until I decide to pay the final payment.

dil999

arleitiss wrote: »

I have no particular car in mind as of yet, I kind of like Passat's but I assume deposit for those would be 10k or so?

A new highline passat on 0% PCP will require 10% deposit minimum - approx €3.5K. Payments will be in the high 400s, GMFV (final baloon payment) will be €13.7K

arleitiss

dil999 wrote: »

A new highline passat on 0% PCP will require 10% deposit minimum - approx €3.5K. Payments will be in the high 400s, GMFV (final baloon payment) will be €13.7K

That's actually reasonable, definitely an option I will look into tonight.
I was under the impression that passat is somewhere in same class/band as A4 or 3 series so it would be way more than that.
I had a quick glance at site - it says Highline/Trendline/Comfortline - are those purely cosmetics or does that affect car performance as well?

Also - once PCP is over in 3 years- are you tied to same dealer or can you switch?

dil999

arleitiss wrote: »

That's actually reasonable, definitely an option I will look into tonight.
I was under the impression that passat is somewhere in same class/band as A4 or 3 series so it would be way more than that.
I had a quick glance at site - it says Highline/Trendline/Comfortline - are those purely cosmetics or does that affect car performance as well?

Also - once PCP is over in 3 years- are you tied to same dealer or can you switch?

They are cosmetic, There is a choice of engines for each model. The volkswagen.ie site will give you all the details.

More importantly, do your homework on PCP & Hire Purchase. The dealers will be like Paul Daniels with smoke and mirrors when they 'explain' it to you.

As a starter, see the following for an explanation of PCP & Hire purchase that is relevant to Ireland. https://www.ccpc.ie/consumers/money/loans/paying-for-your-car/

With regards to trading in your car in 3 years, you can go back to any dealer anywhere. They will offer you a trade in value. If the value exceeds whats left owing on your existing PCP, the dealer will pay off your existing PCP loan, terminating that loan for you. It doesn't matter if the PCP was originally set up by a different dealer.
If there is excess, it can be used towards the purchase of a new car. You have the option to pay for that new car with cash, or set up a new PCP or HP arrangement.

26000 Elephants

EndaHonesty wrote: »

It's not a silly add-on it's an optional payment.

How much would you expect servicing to cost for 3 years?

And don't bother with any main stealer cliches or self service hero stories :rolleyes:

What does it matter what it costs? You said "No extra costs like servicing..." but you are clearly paying plenty for it.

Paying for something in installments does not mean you are not paying for it.

initial servicing on a new car is not expensive, anything other than oil & fluids should be covered by warranty.

EndaHonesty

26000 Elephants wrote: »

What does it matter what it costs? You said "No extra costs like servicing..." but you are clearly paying plenty for it.

Paying for something in installments does not mean you are not paying for it.

initial servicing on a new car is not expensive, anything other than oil & fluids should be covered by warranty.

The matter is you implied that the monthly service charge was "silly"!

The monthly service charge is optional and offers a discounted rate on servicing.

This would obviously be attractive to someone looking for a known monthly cost.

This point obviously has whooshed way over your head :rolleyes:

You could just have easily called the monthly pcp fee an extra. Or insurance. Or tax.

I clearly said it was an optional charge. Try engaging your brain before posting.

26000 Elephants

EndaHonesty wrote: »

You could just have easily called the monthly pcp fee an extra.

And you think this is a solid point? Seriously? <facepalm.gif:>

For a start, nothing is whooshing over my head. I think i made it pretty clear in my post that it was a good deal, but servicing is a clear extra, to be paid for. You remarked on how it was a good deal with not having to pay for servicing, etc. Is there some part of that you are still having problems understanding?

maidhc

dil999 wrote: »

A new highline passat on 0% PCP will require 10% deposit minimum - approx €3.5K. Payments will be in the high 400s, GMFV (final baloon payment) will be €13.7K

Why do they only do the 0% on the Highline I wonder? Better margin for VW to offset agaisnt the cost of the money?

arleitiss

What other saloon/coupe cars are available and are actually decent-ish?
I know Nissan has decent-ish PCP options but those cars are just small.

dil999

maidhc wrote: »

Why do they only do the 0% on the Highline I wonder? Better margin for VW to offset agaisnt the cost of the money?

Volkswagen are obviously trying to maximse their revenue and their profits. One was of doing this is to increase sales of their higher priced products. This has positive brand impact also. The Highline model looks much better and is much better specced than the Trendline. The real purpose of the Trendline is to make you want the Highline.

Rather than offsetting the cost of an individual loan vs an individual car, I think they are probably looking at the bigger picture. The overall cost of 0% financing is probably treated more as a marketing expense. VW have ten of billions in cash reserves. What's better to do with it than use it to increase revenue?

dil999

arleitiss wrote: »

What other saloon/coupe cars are available and are actually decent-ish?
I know Nissan has decent-ish PCP options but those cars are just small.

All the manufacturers have PCP and HP financing options:

Ford Mondeo, Toyota Avensis, Kia Optima, Hyundai i40 and more.

arleitiss

dil999 wrote: »

All the manufacturers have PCP and HP financing options:

Ford Mondeo, Toyota Avensis, Kia Optima, Hyundai i40 and more.

Many of them don't list price for PCP though.
From what I understand, it's:

Finance = Total RRP - 10/20/30% deposit.
Monthly Payments = (Finance - 33%) / 36
33% = Final payment?
+ any APR % on top.

Is that roughly right?

SteelyDanJalapeno

arleitiss wrote: »

Many of them don't list price for PCP though.
From what I understand, it's:

Finance = Total RRP - 10/20/30% deposit.
Monthly Payments = (Finance - 33%) / 36
33% = Final payment?
+ any APR % on top.

Is that roughly right?

Pretty much, but your monthly payments are obviously dependent on your initial deposit.

mickdw

And the final payment can be around 40 percent

arleitiss

ah okay, for some reason I thought it's a fixed 33% everywhere.

veryangryman

Today should be D-Day for balloon payment but no payment has been taken yet from my account. Will give till tomorrow to call them, but has anyone any experience with VW bank as to what happenned for final payment?

SteelyDanJalapeno

veryangryman wrote: »

Today should be D-Day for balloon payment but no payment has been taken yet from my account. Will give till tomorrow to call them, but has anyone any experience with VW bank as to what happenned for final payment?

Are you very angry because of this?

veryangryman

TiltedBrain wrote: »

Are you very angry because of this?

Sort of...

Sincerely
veryanxiousman

conzy

When I bought mine. They said it rarely actually happens as people intervene with another payment method. But the final Direct Debit payment is the balance.

So your last DD payment could be €20k or whatever presuming you had it sitting in your current account

ELM327

dil999 wrote: »

Why? You are taking out a loan. 37 monthly payments. The 37th is the balloon. Every loan I have ever taken out has all the payments debited out of my account. You hardly think volkswagen bank are going to wait around until I decide to pay the final payment.

You are taking out a 3 year PCP agreement, where you loan the car.
At the end you have 3 options. There is no default option IE "you must buy the car".

nebraska132

having done this recently there is in effect a default option - they take the GMFV amount from your account on the last day of the PCP deal in full settlement of your PCP deal.
There are other options like refinancing - or trading for a new car with a new PCP deal but they require you to take specific steps, they will assume you are paying off the rest of the financing if you don't engage with them.

mickdw

nebraska132 wrote: »

having done this recently there is in effect a default option - they take the GMFV amount from your account on the last day of the PCP deal in full settlement of your PCP deal.
There are other options like refinancing - or trading for a new car with a new PCP deal but they require you to take specific steps, they will assume you are paying off the rest of the financing if you don't engage with them.

If you don't engage! Obviously if you refuse all contact in advance of end date, you have to pay for the car. Most sensible people will visit dealer well in advance. See trade in options or arrange finance or just to confirm that you plan on keeping the car.

DaveyDave

I'm assuming when your PCP is almost up and you want to order a new one you do so in advance so that the new one arrives around when the 3 years is up?

I'd definitely be in the dealers months in advance looking at new models, prices, test drives etc so I'd be letting then know not to expect €11k to be debited on the last day...

R.O.R

If a dealer isn't in contact with you at least 3 months before the end of the PCP to try and sell you a new car, they chose the wrong profession.

Low hanging fruit is the easiest to harvest.

dil999

ELM327 wrote: »

You are taking out a 3 year PCP agreement, where you loan the car.
At the end you have 3 options. There is no default option IE "you must buy the car".

You do not "loan the car" you enter into a hire purchase agreement. which can be terminated by a number of conditions.

There is a default option if you do not either trade in the car, or arrange to hand back the car (you must give 30 days notice of this) The GMFV will be debited from your account. As R.O.R. stated, you can be sure the dealer will be on to you prior to that.

The dealer I purchased my car from told me that they had experience of 2 customers who ignored all contact from them and from VW bank, and were shocked that the money came out of their account.

who_ru

I was going over the SEAT PCP calculator last night for a new Leon FR.

Price = €25675
Deposit (30%) = €7702.50
Finance = €17972.50 over 36 months 0% (0% offer may be over now)
Final payment = €9757
36 monthly payment = €228.20

Overall price of 25675 is with no extras whatsoever - when I included extras in configuration price was >€28K.

If I was to put aside money each month to meet the final payment this would mean €9757/36 = €271.02 plus the monthly payment of €228.20 would mean I am effectively paying €499.22 per month for 36 months in order to own the car outright at the end of the 3 years.

That's a lot of cash per month for 36 months.

food for thought. Even with 0%. And this offer might be over as it was due to end 30 Sep.