How did PCP work out in the end?

SteelyDanJalapeno

McCrack wrote: »

Lol okay

Never mind the 50 percent depreciation after 3 years.. Which is c.15k but yes the brochure says "0 percent finance" and a signing up bonus

Depreciation is a wild beast, it doesn't care how you've purchased your car, it will affect all cars.

DaveyDave

McCrack wrote: »

Are you seriously asking that question?

Yes. You're clearly against "finance at a cost for a depreciating asset" but if I was to save and buy with cash it would still depreciate. What's the alternative for a new buyer?

Blowheads

Use the bus..

Anything to do with buying a car is related to depreciation, not at our market does it appreciate.
0% APR is good value for your money compared to a bank loan (not sure CU %)
You have to work out for yourself the full cost of the car, deposit, contributions, monthly, final payment.
An alternative is to buy a 2nd hand car on PCP where a chunk of the major depreciation is done

bazz26

PCP is not as attractive on 2nd hand cars and makes little sense imo. You end up still having a fairly large balloon payment on a car after 3 years that's at the age where there is no equity left in it. Nobody wants to be still owing a balloon payment on a car that is at least 5 years years old.

PCP is geared towards new cars and manufacturers also generally give incentives to get customers into new cars in the form of cash contributions towards the PCP deposit, the car has a bit of equity in it after 3 years so that the customer uses that equity towards a PCP deal on another new car.

rustynutz

McCrack wrote: »

Lol okay

Never mind the 50 percent depreciation after 3 years.. Which is c.15k but yes the brochure says "0 percent finance" and a signing up bonus

What's your point? This is a thread about PCP, all new cars depreciate, whether you buy through PCP, bankloan or cash

Lantus

McCrack wrote: »

Lol okay

Never mind the 50 percent depreciation after 3 years.. Which is c.15k but yes the brochure says "0 percent finance" and a signing up bonus

Agreed, don't forget food, clothes, phones, nearly all bought goods and people eventually. It's a mugs game buying stuff... Who cares if it gives you pleasure or enjoyment....

McCrack

rustynutz wrote: »

What's your point? This is a thread about PCP, all new cars depreciate, whether you buy through PCP, bankloan or cash

Yes most of us understand that however it's a mug who takes out finance to buy a brand new car, not only are they paying interest etc but also taking a big hit on depreciation. Also these pcp deals are on fairly unremarkable bland vehicles that are common everywhere.

If a person has savings and/or earnings to enable them buy brand new then fair enough that's their own money and you are unlikely to find them in a 202 hyundai Kona etc

DaveyDave

McCrack wrote: »

Yes most of us understand that however it's a mug who takes out finance to buy a brand new car, not only are they paying interest etc but also taking a big hit on depreciation. Also these pcp deals are on fairly unremarkable bland vehicles that are common everywhere.

If a person has savings and/or earnings to enable them buy brand new then fair enough that's their own money and you are unlikely to find them in a 202 hyundai Kona etc

The person buying a car in cash has to deal with the same depreciation, you haven't given an answer as to what people who want to buy new are supposed to do with depreciation? Your original post clearly made a point about how finance is bad for something that depreciates. Not everyone wants to buy a 10 year old banger to get around depreciation.

Very, very few people pay cash. People have been buying cars on finance for a very, very long time. They're happy to pay interest because a service is being provided to them. Financial services, like all services, cost money.

Next you'll be telling me I'm a fool for paying tax and carbon charges on gas and electricity instead of buying solar...

McCrack

When you say a person buying in cash you mean a person that has enough of their own money (saved/earned) to make a purchase of a new car. Yes of course depreciation will kick in for them too however they can afford it and they not also paying interest etc on the purchase monies. That's the significant difference and we wonder why we have a "squeezed middle" in this country.

Pcp is not a service as you suggest. It's a product and a very cleverly marketed one. So yes as the saying goes... A fool and his money..

Steven81

We bought a 171 for cash new 3 years ago, wife drives it, when it gets 7-8 years old I will probably get it and drive it to the point that it is costing me money by being too much to repair.

I know the mileage is correct, I know it will be looked after and serviced right. Will it cost that much when I look at a new car as a 12-14 year project.

Wildly Boaring

McCrack wrote: »

When you say a person buying in cash you mean a person that has enough of their own money (saved/earned) to make a purchase of a new car. Yes of course depreciation will kick in for them too however they can afford it and they not also paying interest etc on the purchase monies. That's the significant difference and we wonder why we have a "squeezed middle" in this country.

Pcp is not a service as you suggest. It's a product and a very cleverly marketed one. So yes as the saying goes... A fool and his money..

0% or very low PCP costs the exact same as paying cash.

The massive difference is if you go PCP you can use your cash for something else. Even keeping it as savings is a better idea than trying it into a depreciating asset.

Say you have 60k
You buy a car for 50k
You have 10. Covid happens you lost you're previously rock solid job. Nobody wants to buy your 50k car at time of uncertainty. You've got 10k to survive on.

You put down a 10k deposit.
You intend paying 500 a month on 0%.
Covid happens.
You've 50k in the bank and the option to take the hit in bad credit history and throw the keys back.
You've also got 50k to keep paying the 500 a month until another job happens.

(I know anyone with 60k savings shouldn't be buying 50k cars)

Synode

McCrack wrote: »

When you say a person buying in cash you mean a person that has enough of their own money (saved/earned) to make a purchase of a new car. Yes of course depreciation will kick in for them too however they can afford it and they not also paying interest etc on the purchase monies. That's the significant difference and we wonder why we have a "squeezed middle" in this country.

Pcp is not a service as you suggest. It's a product and a very cleverly marketed one. So yes as the saying goes... A fool and his money..

Some amount of nonsense. Why don't you go to a forum where you know what you're talking about

McCrack

Synode wrote: »

Some amount of nonsense. Why don't you go to a forum where you know what you're talking about

Well maybe you got sucked in and have a shiny 201 **** box outside but that's the reality with taking out finance on a brand new car. It's a mugs game.

bazz26

I guess that car outside your door wasn't originally bought with some sort of finance either. Without that "mug" you would would have it now. A very begrudging mindset imo.

I wish people all the best buying new cars whatever way they want to pay for them as it gives me plenty of choice when I come to buy them when they are tired of them.

Comhrá

McCrack wrote: »

Well maybe you got sucked in and have a shiny 201 **** box outside but that's the reality with taking out finance on a brand new car. It's a mugs game.

If people can afford a nice new car, more luck to them. Your attitude is miserable and begrudging. Without 'fools' as you refer to them, there would be no motor industry to begin with. Not sure why you bother posting in this thread with your attitude to new car buyers.

Top Dog

McCrack wrote: »

Well maybe you got sucked in and have a shiny 201 **** box outside but that's the reality with taking out finance on a brand new car. It's a mugs game.

They turned you down for finance didn't they? It's ok, you can tell us :pac:

McCrack

Comhra wrote: »

If people can afford a nice new car, more luck to them. Your attitude is miserable and begrudging. Without 'fools' as you refer to them, there would be no motor industry to begin with. Not sure why you bother posting in this thread with your attitude to new car buyers.

As I said in a previous post if a person has their own money saved/earned then of course go ahead and buy brand new if they wish. Getting finance/pcp to buy brand new is not affording it and its foolish spending on a brand new depreciating asset and trust me I certainly dont "begrudge" anybody getting a pcp to drive some 201 uninspiring crossover Tuscon, captur or whatever else the masses have thesedays.

Bass Reeves

Steven81 wrote: »

We bought a 171 for cash new 3 years ago, wife drives it, when it gets 7-8 years old I will probably get it and drive it to the point that it is costing me money by being too much to repair.

I know the mileage is correct, I know it will be looked after and serviced right. Will it cost that much when I look at a new car as a 12-14 year project.

We did that for years. I took other half car and git her a newer one. Really saved money as it we were buying one car about 4-5 years old in a straight deal. Yes you had to.paynout a big lump of money but depreciation and dealer margin was not crippling us every 1-2 years if both buying and changing cars.

As well it means you have one decent car to go on holidays or to travel somewhere with

JCN12

bazz26 wrote: »

I guess that car outside your door wasn't originally bought with some sort of finance either. Without that "mug" you would would have it now. A very begrudging mindset imo.

I wish people all the best buying new cars whatever way they want to pay for them as it gives me plenty of choice when I come to buy them when they are tired of them.

+1

All these people in debt are doing us a tremendous favour in the long run.

I just hope they look after the cars well for us.

PCP is great.

Bass Reeves

JCN12 wrote: »

+1

All these people in debt are doing us a tremendous favour in the long run.

I just hope they look after the cars well for us.

PCP is great.

Agreed I just keep away from not a d I keep my children away from it as well

EndaHonesty

McCrack wrote: »

Well maybe you got sucked in and have a shiny 201 **** box outside but that's the reality with taking out finance on a brand new car. It's a mugs game.

There are 2 types of people in the world;

1. People who know what credit is, and how to use it.

2. People who don't know what credit is, or how to use it.

JCN12

EndaHonesty wrote: »

There are 2 types of people in the world;

1. People who know what credit is, and how to use it.

2. People who don't know what credit is, or how to use it.

I'm pretty sure there are many more types of people out there, with various opinions and understandings of credit and the subsequent debt to be paid.

However, one thing never changes with credit.

The house always wins.

mickdw

Wildly Boaring wrote: »

0% or very low PCP costs the exact same as paying cash.

The massive difference is if you go PCP you can use your cash for something else. Even keeping it as savings is a better idea than trying it into a depreciating asset.

Say you have 60k
You buy a car for 50k
You have 10. Covid happens you lost you're previously rock solid job. Nobody wants to buy your 50k car at time of uncertainty. You've got 10k to survive on.

You put down a 10k deposit.
You intend paying 500 a month on 0%.
Covid happens.
You've 50k in the bank and the option to take the hit in bad credit history and throw the keys back.
You've also got 50k to keep paying the 500 a month until another job happens.

(I know anyone with 60k savings shouldn't be buying 50k cars)

Fair comment. The funny thing is, tbe majority of people buying 50k cars wouldnt have anywhere even close to 60k cash in the bank.
Its pretty crazy but alot of households dont even have a months wages in savings. The more secure the job, the worse people are in terms of saving.
I know public sector workers who would be in all sorts of trouble if their money was 1 week late.

EndaHonesty

JCN12 wrote: »

I'm pretty sure there are many more types of people out there, with various opinions and understandings of credit and the subsequent debt to be paid.

However, one thing never changes with credit.

The house always wins.

Who's "the house"?

ShadowHearth

marty whelan wrote: »

I think he means scrappage of 3k +3k cash =6k deposit

Yes, sorry. I need to make it a bit more clear. I wanted to give as much details, but it got mashed up together, sorry.

It was 6k deposit, which was 3k cash + 3k scrapage I got for my alfa.


Edit: Jaysus feck all mighty. Just read the rest of the thread since my post. Wtf is wrong with some people. Its a thread where people can give real world examples not just on paper numbers of pcp purchases to help people understand it better. Not a "You are an idiot buying buying new car on finance, I drive my 99 Corrola and it actually printing me money instead of losing it!" thread. Every damn thread turns in to this **** lately.

DaveyDave

Imagine being that ignorant that you can't see the value of finance, even if you don't use it yourself. This has to be a wind up.

ELM327

EndaHonesty wrote: »

Who's "the house"?

The bank and the dealer. Two houses.

tscul32

We did it a few years ago. At the time the family car was on its last legs. We couldn't afford the bank loan repayments on a 3-4 year old second hand one so went for new with 0% pcp (repaid around €200 per month vs 400+). We knew our finances were improving over the next while. We put money aside aswell as the 200 and at the end of the 3 years we just paid it off, less than half the value. So it worked perfectly for us. We had a driving holiday booked 6 weeks from when we were advised not to bring the old car so needed to get sorted quickly, otherwise we'd have waited 6 mths or so until we were in a better position. But it worked out great. Car is now 5 years old and we'll keep it until it dies.
Our 2nd car was a 15 year old hyundai accent which finally failed an nct this year so at that age it wasn't worth fixing. In a round about way we benefitted from pcp again, as my brother was just at the end of his pcp term and wanted to upgrade. So he got the price from the garage for his current car and let us have it for the same amount (cash), giving us trade price and saving about 4k. And we know the car's history and benefitted from his low mileage.
Hopefully these cars will do us for a few years now.

Synode

McCrack wrote: »

Well maybe you got sucked in and have a shiny 201 **** box outside but that's the reality with taking out finance on a brand new car. It's a mugs game.

0% finance. Brand new car every 3 years for very little extra. Yeah, we're mugs :pac:

ELM327

Synode wrote: »

0% finance. Brand new car every 3 years for very little extra. Yeah, we're mugs :pac:

Very little extra in the monthlies, yes, but you're always topping up the deposit and the GFMV is increasing.

Bass Reeves

Synode wrote: »

0% finance. Brand new car every 3 years for very little extra. Yeah, we're mugs :pac:

There is no such thing as a free supper

DaveyDave

Please, no more posts about how people think 0% is built into the cost of the car...

EndaHonesty

ELM327 wrote: »

The bank and the dealer. Two houses.

So the person who bought the car they want, for the price they wanted to pay, using the payment method of their choice, doesn't win?

ELM327

EndaHonesty wrote: »

So the person who bought the car they want, for the price they wanted to pay, using the payment method of their choice, doesn't win?

on pcp thats not the end of the transaction.

EndaHonesty

ELM327 wrote: »

on pcp thats not the end of the transaction.

It depends on your point of view.

ELM327

EndaHonesty wrote: »

It depends on your point of view.

You can have all the points of view you want but after 3 years the balance is due. The transaction finishes then.
If your car is only worth the GFMV then you need to add another few k to "go again" in PCP

JCN12

DaveyDave wrote: »

Imagine being that ignorant that you can't see the value of finance, even if you don't use it yourself. This has to be a wind up.

It seems to me, that the users who have ushered concern over PCP's, can see the value of credit, but not on a depreciating asset by intrinsic nature, and the economic exposure it can lead too.

A mortgage for your home, may likely yield good value in the main.

Calling someone ignorant implies a lack of understanding and education on the accusers part.

Bass Reeves

DaveyDave wrote: »

Please, no more posts about how people think 0% is built into the cost of the car...

TBH it very hard to discuss how PCP works without factoring n how the credit side of it works

Synode

ELM327 wrote: »

Very little extra in the monthlies, yes, but you're always topping up the deposit and the GFMV is increasing.

Didn't have to put another cent in.

ELM327

Synode wrote: »

Didn't have to put another cent in.

This time.
If the bubble bursts and you dont have any "equity" you will next time

Bass Reeves

EndaHonesty wrote: »

So the person who bought the car they want, for the price they wanted to pay, using the payment method of their choice, doesn't win?

They win sometimes like any roulette wheel but the house always we wins. The bank is the house and always wins. The dealer dose not necessarily always win as he carried the risk of the bubble bursting in a downturn like in 2008-2010.

Synode

ELM327 wrote: »

This time.
If the bubble bursts and you dont have any "equity" you will next time

Yes, if. No crystal ball here but I certainly won't have an issue taking out a loan to repay the balloon payment if that happens. Things have got to be paid for.

EndaHonesty

Bass Reeves wrote: »

They win sometimes like any roulette wheel but the house always we wins. The bank is the house and always wins. The dealer dose not necessarily always win as he carried the risk of the bubble bursting in a downturn like in 2008-2010.

It's not gambling, there's no roulette wheels involved, you do know we're talking about financing cars with PCP?! Not a trip to Vegas. :rolleyes:

CoBo55

ShadowHearth wrote: »

Yes, sorry. I need to make it a bit more clear. I wanted to give as much details, but it got mashed up together, sorry.

It was 6k deposit, which was 3k cash + 3k scrapage I got for my alfa.


Edit: Jaysus feck all mighty. Just read the rest of the thread since my post. Wtf is wrong with some people. Its a thread where people can give real world examples not just on paper numbers of pcp purchases to help people understand it better. Not a "You are an idiot buying buying new car on finance, I drive my 99 Corrola and it actually printing me money instead of losing it!" thread. Every damn thread turns in to this **** lately.

Exactly, the stupid negative for the sake of being negative posts should really be removed.

CoBo55

ELM327 wrote: »

You can have all the points of view you want but after 3 years the balance is due. The transaction finishes then.
If your car is only worth the GFMV then you need to add another few k to "go again" in PCP

Yea we all know that. That's all been covered from the start of this thread. Have you anything new to offer?

CoBo55

JCN12 wrote: »

It seems to me, that the users who have ushered concern over PCP's, can see the value of credit, but not on a depreciating asset by intrinsic nature, and the economic exposure it can lead too.

A mortgage for your home, may likely yield good value in the main.

Calling someone ignorant implies a lack of understanding and education on the accusers part.

Try telling that load of rubbish to someone who bought a house in 2007.

CoBo55

This was a great thread until all the "hate everything you're all stupid numptys" turned up.

JCN12

CoBo55 wrote: »

Try telling that load of rubbish to someone who bought a house in 2007.

Note how I said 'home' and not 'house'.

A home for you and your family is one of the most fundamental things in life. If that means prudent credit useage, then so be it.

Prudency wasn't all to common in 2007 unfortunately. Many Irish people suffered due to reckless credit useage.

It was dubbed the credit bubble by economists. Many people during that time thought that they knew how to use credit, and work low interest rates.
People who warned against it we're called begrudgers and ignorant, and told to keep quiet because it wasn't what the majority wanted to hear. Sound familiar?

Reliance on finance can be a difficult mindset to break.

ELM327

CoBo55 wrote: »

Yea we all know that. That's all been covered from the start of this thread. Have you anything new to offer?

Clearly some dont.

Have you anything worthwhile to offer?

Lantus

DaveyDave wrote: »

Please, no more posts about how people think 0% is built into the cost of the car...

yeah but it's safe zero resting on a flat earth overseen by the lizard people.