PCP finance.

Doddles88

maidhc wrote: »

Maybe the posters income just isn't high enough for the underwriters and VW bank are just being prudent. This sense of entitlement to borrow is just the ****e I used to listen to 10 years ago.

Maybe, maybe not. The monthly repayment agreed was around 13% of my monthly net income. Not a stretch for me at all and I'm fairly certain I'd still have been able to afford a couple of holidays throughout the year and a few pints at the weekend. I don't feel entitled to anything. I worked hard for 5 years to get my bachelors degree and then masters and then the good job I have today. Don't be wrong, not being approved is not because of my income, it because I have never needed to borrow money before and thus have no credit history. Confirmed by the business manager in the dealer.

maidhc

Doddles88 wrote: »

Maybe, maybe not. The monthly repayment agreed was around 13% of my monthly net income. Not a stretch for me at all and I'm fairly certain I'd still have been able to afford a couple of holidays throughout the year and a few pints at the weekend. I don't feel entitled to anything. I worked hard for 5 years to get my bachelors degree and then masters and then the good job I have today. Don't be wrong, not being approved is not because of my income, it because I have never needed to borrow money before and thus have no credit history. Confirmed by the business manager in the dealer.

Fair enough. Seems inherently manageable. You don't necessarily need a credit history to borrow though. My first loan was 60k for a business, unsecured, in the depths of the credit crunch. It wasn't necessarily easy to get, but not too hard either.

DaveyDave

Doddles88 wrote: »

Maybe, maybe not. The monthly repayment agreed was around 13% of my monthly net income. Not a stretch for me at all and I'm fairly certain I'd still have been able to afford a couple of holidays throughout the year and a few pints at the weekend. I don't feel entitled to anything. I worked hard for 5 years to get my bachelors degree and then masters and then the good job I have today. Don't be wrong, not being approved is not because of my income, it because I have never needed to borrow money before and thus have no credit history. Confirmed by the business manager in the dealer.

Fair play to you OP, getting through college is something very few can do these days.

My payment is 12.5% of my Net monthly, I'm 25 with no previous credit history or loans. I was approved based off of bank statement, savings statement and payslips. I had almost all of the deposit saved when I initially placed the order which might have helped as I was told this is vital for people without credit history.

My salary was actually a bit lower at the time of approval but I was also living at home at the time so was putting 90% into savings so I'm not sure if that made much difference.

Maybe go back in a few months time with a higher deposit if possible?

SteelyDanJalapeno

My approval too was based on pay slips, nothing to do with whether I borrowed money before.

Had 30% deposit in the form of trade in thou

DaveyDave

DaveyDave wrote: »

Hi all, dealer said to bring a bank draft for my deposit when collecting the car but I initially used card when placing the order. Can I use my card again for the remaining €5,500 or will I need to get a bank draft? Don't have time to call them right now as I'm heading to work...

Also would anyone know the answer to this?

GustavoFring

Most likely will want a bank draft for a hefty amount of money as the card will have fees associated with it.

CeilingFly

DaveyDave wrote: »

Also would anyone know the answer to this?

Your card, if its a debit card, will have a transaction limit of about €1500

R.O.R

EFT is the way to go.

You don't know have to go to the Bank and neither does the salesman to lodge it.

Lantus

Dealers don't allow cars to be paid on cards.

They don't want the fee to eat their margin and some cards offer consumer insurance which is a risk for them.

Draft, EFT, cash is your main options.

SSr0

CeilingFly wrote: »

Your card will have a transaction limit of about €1500

That's funny, I just transferred well over €10k in to my CU account via my Visa card last week.

CeilingFly

SSr0 wrote: »

That's funny, I just transferred well over €10k in to my CU account via my Visa card last week.

That's unusual unless it was a credit card (which would have hefty fees of 1%-2% on the transaction) as almost all banks will have a daily transaction limit on debit cards and a single tarnsaction limit.

For AIB its 2500 daily limit and 1500 in one transaction unless you apply for the limit to be lifted and that may mean any fraudulent use above that limit would be your responsibility.

SSr0

CeilingFly wrote: »

That's unusual unless it was a credit card (which would have hefty fees of 1%-2% on the transaction) as almost all banks will have a daily transaction limit on debit cards and a single tarnsaction limit.

For AIB its 2500 daily limit and 1500 in one transaction unless you apply for the limit to be lifted and that may mean any fraudulent use above that limit would be your responsibility.

It was with a Visa Debit with Ulster Bank. I know there is a limit with cash withdrawals, but there seems to be no limit with card transactions from my account.

dil999

Best way to find out if they'll accept a card is to ask them. I would be surprised if they didn't. After that a bank transfer is the most convenient way, except you will have to wait until their accounts department confirms the payment goes through. This will be at worst next working day.

CeilingFly

CeilingFly wrote: »

Your card, if its a debit card, will have a transaction limit of about €1500

This is not true. My Ebs debut card had a 3k per day transaction limit but my BOI debit card is only limited to the funds in your account so if you have 10k in your account you can spend 10k on your debit card in one go. I'm even still on a student account (despite it being years since I was one) so my account is just bog standard with no allowances for high transactions. Sounds like your account is a pretty limited one.

Cash withdrawals are a different thing and are usually subject to daily limits.

DaveyDave

Thanks for the replies guys, seems there is a 2% charge for using card and also a daily limit of €2,500 for me. Bank draft it is!

CeilingFly

Andres Slimy Staircase wrote: »

This is not true. My Ebs debut card had a 3k per day transaction limit but my BOI debit card is only limited to the funds in your account so if you have 10k in your account you can spend 10k on your debit card in one go. I'm even still on a student account (despite it being years since I was one) so my account is just bog standard with no allowances for high transactions. Sounds like your account is a pretty limited one.

Cash withdrawals are a different thing and are usually subject to daily limits.

seems to depend on your bank.

AIB have a daily limit of 2500 and transaction limit of 1500. Different to cash withdrawal limit.

Ulster bank have a transaction limit of 1500 for retail transactions. Not sure if they have an overall limit.

ShadowHearth

TiltedBrain wrote: »

My approval too was based on pay slips, nothing to do with whether I borrowed money before.

Had 30% deposit in the form of trade in thou

When I decided to pop in to Seat to find out more and if they even had the car I wanted, we sat down and applied for the finance. We didnt even had agreed deal or anything. Then we went to test drive a car, wasnt even the car I wanted, but was closesed to the real thing.
After we came back from test drive he checked his pc and told me that I was approved for finance. I only needed to bring my passport and prove of adress, thats it. I have to admit I was surprised. I knew my credit history is pretty good, but it was the biggest finance deal I applied for.

maidhc

CeilingFly wrote: »

seems to depend on your bank.

AIB have a daily limit of 2500 and transaction limit of 1500. Different to cash withdrawal limit.

Ulster bank have a transaction limit of 1500 for retail transactions. Not sure if they have an overall limit.

The business cards have a higher limit too. No idea what the amount is, but I have often paid 5k plus on a visa debit.

SteelyDanJalapeno

ShadowHearth wrote: »

When I decided to pop in to Seat to find out more and if they even had the car I wanted, we sat down and applied for the finance. We didnt even had agreed deal or anything. Then we went to test drive a car, wasnt even the car I wanted, but was closesed to the real thing.
After we came back from test drive he checked his pc and told me that I was approved for finance. I only needed to bring my passport and prove of adress, thats it. I have to admit I was surprised. I knew my credit history is pretty good, but it was the biggest finance deal I applied for.

Mine too was with SEAT, (VW Bank)

Micky 32

Same here, i was approved with no request for statements etc. Just ID and a utility bill. Then the next car i bought it was approved straight away once thedetails were put in. I could have told them i was making 10k a week. Vw never even asked for proof.

Doddles88

Micky 32 wrote: »

Same here, i was approved with no request for statements etc. Just ID and a utility bill. Then the next car i bought it was approved straight away once thedetails were put in. I could have told them i was making 10k a week. Vw never even asked for proof.

Beginning to think they just didn't like me haha

Pelvis

DaveyDave wrote: »

Fair play to you OP, getting through college is something very few can do these days.

Ya wha??

DaveyDave

Pelvis wrote: »

Ya wha??

The vast majority of people I know can't even get into college, myself included, and the people I know who have gotten a degree have said it wasn't easy, so fair play to people with them. A few people I know dropped out. Could be different for you and the people you know though, just saying fair play for him for working hard for himself. Hopefully he gets a car sorted

DaveyDave

Got a letter from VW the other day after picking the car up last week, explaining the three options I have at the end of the 3 years. Didn't read as I already know but I must have a look and see how well it explains it for anyone who isn't too sure as it appears not a lot of people actually know.

It was good to see a letter being sent out after the excitement of picking up the car wears down.

jca

DaveyDave wrote: »

Got a letter from VW the other day after picking the car up last week, explaining the three options I have at the end of the 3 years. Didn't read as I already know but I must have a look and see how well it explains it for anyone who isn't too sure as it appears not a lot of people actually know.

It was good to see a letter being sent out after the excitement of picking up the car wears down.

I got the same letter, it makes it very clear, as you said it's a great idea.

TheShow

Micky 32 wrote: »

Same here, i was approved with no request for statements etc. Just ID and a utility bill. Then the next car i bought it was approved straight away once thedetails were put in. I could have told them i was making 10k a week. Vw never even asked for proof.

They get your details and run an ICB check. If that comes back with a decent bit of history that is clean, then you get approved. If you’ve had arrears in the past then you’ll most likely be declined. If you’ve a limited history, I.e. maybe just one or two facilities, then they might look for statements and/or pay slips. PCP is not governed by CPC therefore the lender is not strictly required to demonstrate that repayment capacity exists, unlike a bank who must document that repayment capacity has been clearly established. Mostly it’s just a check of your risk profile.

TheShow

Doddles88 wrote: »

So I had agreed a deal with VW for a new car being delivered 2018. Everything signed, deposit down and car ordered. It was agreed I would be financing it through PCP. They asked for statements etc etc which I provided. They subsequently came back requesting a guarantor because I had no previous credit history (even though through my bank statements and payslips it shows that I can easily cover the monthly repayments). This was reluctantly agreed to by myself because I just feel I am old enough not to need help from my parents but anyway I got them to be guarantor. VW Bank then came back requesting that the repayments would be taken out of my Dad’s account as opposed to my own. Basically as if my Dad was the one getting the car financed. So hypothetically after 3 years if I was looking to trade in for a new PCP I still would have no credit history because the previous loan was in my Dad’s name.

Am I right in thinking this is rather unfair. I would have thought no previous debt and a proven ability to comfortably cover the repayments would be the ideal situation for these places? Should I expect the same conditions if purchasing a different brand?

Maybe your bank statements didn’t demonstrate any capacity to take on a commitment. Do you have savings or a build up of credit funds in the account? If you spend all your money every month (which your entitled to do) and you have no ICB profile; then that’s not a strong risk profile, and I would agree with their decision. Save/build up some cash for c6 months then try again.

XsApollo

I got a seat Ibiza for my wife on finance from VW bank last year.

Simple process, few numbers on the computer and approved in an hour or 2.

A few months ago I was in Audi and was going to buy an A6.
Different ballgame all together.
Pay slips, bank account statements, and a lot more questions and was a day or 2 waiting to find out.
They were a lot more thorough with Audi, never the less I didn’t get the car.
Was refused finance.
Actually happy I was refused because I didn’t need the car :-D
But it was a savage looking 2016 A6 black edition ultra in Sepang blue.
So wanted it. -P

Anyway i think possibly ? VW bank treat their Marques differently with regards to finance.
That’s the impression I got anyway.

mickdw

Surely it must be down to the higher value car putting the figures too close to what they would deem dodgy territory. There is a significant cost difference in financing a next to new A6 versus a Seat Ibiza.

mickdw

Surely it must be down to the higher value car putting the figures too close to what they would deem dodgy territory. There is a significant cost difference in financing a next to new A6 versus a Seat Ibiza.

XsApollo

Actually it was a 15 A6 not a 16 as my other post suggests.

Car was 39k I was putting near enough 30% down, the finance amount was under 30k.
The finance amount for the Ibiza was 17k.
Yes A bit of a difference :-P

But still the way they were handled were
Totally different.
I don’t think I gave any paper work for the Ibiza, just my bank account number.

And the dealer actually got me finance through another company for the full amount.

micks_address

Has anyone done any figures on whether it's better to change every one, two or three years with PCP?

Lantus

micks_address wrote:

Has anyone done any figures on whether it's better to change every one, two or three years with PCP?

Changing after 1 year isn't really feasible as I understand it as a new car devalues sharply in the first year and repayments won't of matched this. Of course you can do it but equity in the vehicle would likley be zero or even negative.

2 years is very feasible however.

mickdw

In general, the longer you leave it towards the end of the 3 years, the cheaper it should be overall however other factors come into play. For example it may be a good idea to trade up a bit early if doing so means you are trading in well before a new model arrives versus attempting to trade in your old model a few months later.

Doddles88

TheShow wrote: »

Maybe your bank statements didn’t demonstrate any capacity to take on a commitment.  Do you have savings or a build up of credit funds in the account?  If you spend all your money every month (which your entitled to do) and you have no ICB profile; then that’s not a strong risk profile, and I would agree with their decision.  Save/build up some cash for c6 months then try again.

As I said before repayments are around 13% of my net income. I'm car mad so wouldn't really spend big on other things during the year except maybe a holiday in the summer. Bank statements clearly demonstrate my ability to comfortably make the repayments. You are correct though, the fact I have never been in debt before means I have no history at all with the ICB( I requested a credit history statement and it confirmed this). I also have the majority of the deposit saved in accounts with 3 months pay still to collect.
I haven't let it lie, I went direct to VW Bank and looked for them to reconsider their decision. They confirmed what the dealer had said that it is my lack of a credit history which makes me too much of a risk. They have since requested some further documents and I am hopeful/confident it will be resolved soon. Fingers Crossed!

micks_address

mickdw wrote: »

In general, the longer you leave it towards the end of the 3 years, the cheaper it should be overall however other factors come into play. For example it may be a good idea to trade up a bit early if doing so means you are trading in well before a new model arrives versus attempting to trade in your old model a few months later.

Yes I'm wondering when say the cost of new tyres and extra servicing costs might come into play. I'm doing about 28k km per year. The interest rate on the PCP also comes into play I suppose. I'm currency on 0% with vw bank with 3 services included.

dil999

micks_address wrote: »

Yes I'm wondering when say the cost of new tyres and extra servicing costs might come into play. I'm doing about 28k km per year. The interest rate on the PCP also comes into play I suppose. I'm currency on 0% with vw bank with 3 services included.

Its impossible to know when you get the best deal, but I would have to agree to wait at least 2 years. I traded mine in 2 years 4 months and I think I did okay.

I don't think the servicing costs will have any impact on it. I think you probably would have been better off paying for that seperately

The biggest issue you will have is mileage, you are doing over twice the average annual mileage. Bottom line you will get a trade in value based on mileage and condition, including tyres. It all depends on the market at the time.

micks_address

dil999 wrote: »

Its impossible to know when you get the best deal, but I would have to agree to wait at least 2 years. I traded mine in 2 years 4 months and I think I did okay.

I don't think the servicing costs will have any impact on it. I think you probably would have been better off paying for that seperately

The biggest issue you will have is mileage, you are doing over twice the average annual mileage. Bottom line you will get a trade in value based on mileage and condition, including tyres. It all depends on the market at the time.

Servicing deal was tied to 0%. Yeah I'm thinking maybe two years and see what sort of finance deals are in the offing

mickdw

There are very few who would trade in every 2 years in the times before pcp.
New car depreciation has not improved in recent times. It is still frightfully expensive to be buying new cars every 2 years. The costs are somewhat hidden but they are still there.
If you want a car every 2 years fair enough but it's unlikely to be the best value.

dil999

mickdw wrote: »

There are very few who would trade in every 2 years in the times before pcp.
New car depreciation has not improved in recent times. It is still frightfully expensive to be buying new cars every 2 years. The costs are somewhat hidden but they are still there.
If you want a car every 2 years fair enough but it's unlikely to be the best value.

I know loads of people who changed their car every two to three years before PCP. Myself included

The only way to have a new car every 2 to 3 years is to change your car every 2 to 3 years. Value is relative. The cost is approximately 20% of the selling price of the car per year. So for a 30K car it's 6K per year, €500 per month. for a 15K car its 3K per year or €250 per month. Hardly frighteningly expensive. Two cups of garage coffee every day is €150 per month.

Frighteningly expensive is relative to what you can afford.

mickdw

3 years is far more palitable as the steep initial depreciation is averaged out somewhat.
3 years would be reasonably common. 2 years not so much. That is what I said. Very few would see value in changing every 2 years before pcp.
I very much see the sense in keeping a new car every 3 years if you can afford it and want the reliability, efficiency and style of such a car and have regularly argued that point here. My point here is that people are now with pcp going back at 2 years and believing because the car is worth more at that stage that they are somehow doing better than waiting until year 3.
There are a few situations where there may be benefit in going in alittle early but in general the longer the better as the depreciation is slowing all the time.

micks_address

mickdw wrote: »

There are very few who would trade in every 2 years in the times before pcp.
New car depreciation has not improved in recent times. It is still frightfully expensive to be buying new cars every 2 years. The costs are somewhat hidden but they are still there.
If you want a car every 2 years fair enough but it's unlikely to be the best value.

Friend always trades his top end superb every two years
More often than not for about 10k

mickdw

Fair enough. I know passats are costing roughly 5k per year on average over first 3 years and that is a reasonable price. If he can swap a superb every 2 for 10k, he is doing well.

dil999

mickdw wrote: »

3 years is far more palitable as the steep initial depreciation is averaged out somewhat.
3 years would be reasonably common. 2 years not so much. That is what I said. Very few would see value in changing every 2 years before pcp.
I very much see the sense in keeping a new car every 3 years if you can afford it and want the reliability, efficiency and style of such a car and have regularly argued that point here. My point here is that people are now with pcp going back at 2 years and believing because the car is worth more at that stage that they are somehow doing better than waiting until year 3.
There are a few situations where there may be benefit in going in alittle early but in general the longer the better as the depreciation is slowing all the time.

I disagree. I have traded cars after 1, 2 and 3 years and the cost has been the same 20% per year. If you get a good discount on the purchase price then the first years depreciation is more or less the same as the second's and third's. That depreciation is independent of whatever method is used to finance the purchase.

The only advantage of waiting 3 years, and it applies only to situations where finance is used, is that any deposit is spread over a longer period, and therefore the yearly cost over the period is slightly lower. But if you minimize the deposit, then it doesn't make a huge difference.

viper5

dil999 wrote: »

I disagree. I have traded cars after 1, 2 and 3 years and the cost has been the same 20% per year. If you get a good discount on the purchase price then the first years depreciation is more or less the same as the second's and third's. That depreciation is independent of whatever method is used to finance the purchase.

The only advantage of waiting 3 years, and it applies only to situations where finance is used, is that any deposit is spread over a longer period, and therefore the yearly cost over the period is slightly lower. But if you minimize the deposit, then it doesn't make a huge difference.

Perhaps im misunderstanding you here but despite all the defense you spin on buying a new cars so often, it appears a truly staggering waste of money . On 30k car, in 2 years that is 12k lost with really little to show for it other than the vanity of number plate while new. If you bought a new car every 2 years for 10 years so would actually 60k spend on depreciation alone for the 5 cars to drive a new car that 100s of other people who upgraded less regularly have on the road as well.

Like you say it’s all relative, I can afford it if I waned but just makes no logical sense to me . I’ve always felt the practice of upgrading annually or bi annually is all about showing off really and keeping up appearances than making any logical argument despite how hard you are trying here .

dil999

viper5 wrote: »

Perhaps im misunderstanding you here but despite all the defense you spin on buying a new cars so often, it appears a truly staggering waste of money . On 30k car, in 2 years that is 12k lost with really little to show for it other than the vanity of number plate while new. If you bought a new car every 2 years for 10 years so would actually 60k spend on depreciation alone for the 5 cars to drive a new car that 100s of other people who upgraded less regularly have on the road as well.

Like you say it’s all relative, I can afford it if I waned but just makes no logical sense to me . I’ve always felt the practice of upgrading annually or bi annually is all about showing off really and keeping up appearances than making any logical argument despite how hard you are trying here .

Yes you are misunderstanding me.

My point is that for the first 3 years of a cars life, depreciation is more or less linear at 20%. And I know that because I have changed cars after 1, 2 and 3 years.

Regarding your own point; The advantages/disadvantages of buying a new car vs a used car is probably for another thread.In your case I get the impression you see buying a car as a financial decision, I treat it as a necessary expense. There are many reasons for changing car every 1,2 or 3 year. Cost is only one. Keeping up appearances and "number plate vanity" falls way down the list for most people.

As I said its an interesting topic for another thread, go ahead and start one. It might be a good discussion

carsfan2

I would class myself as a car enthusiast and have changed cars in the past after one or two years, mainly because I want to try something different. I can’t see the point in changing to the same car after a year or two unless it is a business tool that requires updating.
I disagree that the cost to change is linear however. The first year depreciation is definitely more than the second and subsequent years.
I can see how sometimes if a manufacturer has offers on or your car is readily sale able you might do better but I think this is rarely the case.

Leprechaun77

I think off-setting the discount you get from the list price of a new car against year 1 depreciation is stretching it a bit......but it does take the spike somewhat out of the YR.1 loss to be fair.

dil999

Leprechaun77 wrote: »

I think off-setting the discount you get from the list price of a new car against year 1 depreciation is stretching it a bit......but it does take the spike somewhat out of the YR.1 loss to be fair.

Just giving my experience. I changed a car after one year and it cost me 20% of the value of the new car to change I changed that car after 2 years and it cost me 40%. My last car I changed after 2.5 years, and it cost me 50% of the value of the new car. Its pretty consistent.

If you have a different personal experience, let us know. If you are just guessing then also let us know.

viper5

viper5 wrote: »

Perhaps im misunderstanding you here but despite all the defense you spin on buying a new cars so often, it appears a truly staggering waste of money . On 30k car, in 2 years that is 12k lost with really little to show for it other than the vanity of number plate while new. If you bought a new car every 2 years for 10 years so would actually 60k spend on depreciation alone for the 5 cars to drive a new car that 100s of other people who upgraded less regularly have on the road as well.

Like you say it’s all relative, I can afford it if I waned but just makes no logical sense to me . I’ve always felt the practice of upgrading annually or bi annually is all about showing off really and keeping up appearances than making any logical argument despite how hard you are trying here .

You aren't taking into account things like very high annual mileage etc. Changing after 2 years might make little sense for someone doing 5k per year but if you are doing 60k miles a year then even two years could be a lot.