How did PCP work out in the end?

mickdw

beggars_bush wrote: »

This is going to be an interesting thread soon

Im sure there will be many cars going back and many people struggling to refinance final payment over the coming months.
Not a pcp issue though to be fair, just the mess we have now. Arguably if the **** really hits the fan, many of these cars on pcp will work out better for the consumer than if they had spent all their savings on the car day one.

Lantus

Abba987 wrote: »

What about your deposit?

Same as if you'd paid by cash, loan or hire purchase. You owe the money outstanding.

dhaughton99

beggars_bush wrote: »

This is going to be an interesting thread soon

It’ll be fine. The children’s allowance pays for it.

ShadowHearth

beggars_bush wrote: »

This is going to be an interesting thread soon

Obviously for some people other people miss fortune will be interesting and fun.

Ironically PCP finance is the best for this kind of disaster. People who will financially struggle, can just keep paying small payments and then Dump the car on to dealer, it's their problem then. So people who are on PCP are in better position then people who had other finance forms.

As I said on other threads, my PCP ends in June and when I took out my car I put away small bit in to separate savings account for balloon or upgrade. Planned on upgrading, but obviously decided not too, but if I want I can go in and pay off my car fully even now, without touching my other savings.
And yes, due to whole virus, my work is closed and I am out of income temporary. Still, my own financial planning payed off and I am not panicking or worried about my finance.

As always, those people who took out cars, they could not afford will burn now, but it will be everyone's fault, but not theirs. You will see, evil banks, evil dealers, evil salespeople etc, but not the darling himself.

McCrack

ShadowHearth wrote: »

Obviously for some people other people miss fortune will be interesting and fun.

Ironically PCP finance is the best for this kind of disaster. People who will financially struggle, can just keep paying small payments and then Dump the car on to dealer, it's their problem then. So people who are on PCP are in better position then people who had other finance forms.

As I said on other threads, my PCP ends in June and when I took out my car I put away small bit in to separate savings account for balloon or upgrade. Planned on upgrading, but obviously decided not too, but if I want I can go in and pay off my car fully even now, without touching my other savings.
And yes, due to whole virus, my work is closed and I am out of income temporary. Still, my own financial planning payed off and I am not panicking or worried about my finance.

As always, those people who took out cars, they could not afford will burn now, but it will be everyone's fault, but not theirs. You will see, evil banks, evil dealers, evil salespeople etc, but not the darling himself.

With a dollop of smugness to boot

dhaughton99

I noticed earlier that the neighbor across from us took delivery today of a new white Volvo 4 wheel drive. Poor girl home for the past few days either laid off or in quarantine.

L-M

ShadowHearth wrote: »

.

As always, those people who took out cars, they could not afford will burn now, but it will be everyone's fault, but not theirs. You will see, evil banks, evil dealers, evil salespeople etc, but not the darling himself.

There won’t be any evil salespeople or dealerships. What you’re forgetting is the PCP balloon is nothing to do with the dealer, it’s all underwritten by the bank.

So if anything there could be a bargain to be had.

That said that won’t come to fruition.

Rackstar

dhaughton99 wrote: »

I noticed earlier that the neighbor across from us took delivery today of a new white Volvo 4 wheel drive. Poor girl home for the past few days either laid off or in quarantine.

Or working from home?

beggars_bush

ShadowHearth wrote: »

Obviously for some people other people miss fortune will be interesting and fun.

Ironically PCP finance is the best for this kind of disaster. People who will financially struggle, can just keep paying small payments and then Dump the car on to dealer, it's their problem then. So people who are on PCP are in better position then people who had other finance forms.

As I said on other threads, my PCP ends in June and when I took out my car I put away small bit in to separate savings account for balloon or upgrade. Planned on upgrading, but obviously decided not too, but if I want I can go in and pay off my car fully even now, without touching my other savings.
And yes, due to whole virus, my work is closed and I am out of income temporary. Still, my own financial planning payed off and I am not panicking or worried about my finance.

As always, those people who took out cars, they could not afford will burn now, but it will be everyone's fault, but not theirs. You will see, evil banks, evil dealers, evil salespeople etc, but not the darling himself.

Fair play to you and your financial intuition

A lot of people haven't a clue how pcp works, and live from month to month with their debts, bills and direct debits.

Markcheese

Is there any chance that dealers or the finance provider will extend the finance in some way for those in trouble ?
If a few customers default the dealer can suck it up ,if loads do then the dealers ( and by extension the brands ),have a big problem ...the customer who looses his or her car ,and is then back to work won't go back to vw or Toyota or who ever in a hurry .. and mightnt be able to with a black mark on their credit history ..

bazz26

The finance is loaned by the finance company not the dealer so the dealer wouldn't have to suck up a customer who defaults.

Markcheese

Who gets landed with the car ? And whatever way the money goes with that ?

CIP4

Markcheese wrote: »

Who gets landed with the car ? And whatever way the money goes with that ?

It’s nothing to do with the dealer it’s the finance company. The dealer is paid in full when you get the car they aren’t lending you the money for it. A lot of them that are handed back seem to be auctioned off.

listermint

dhaughton99 wrote: »

I noticed earlier that the neighbor across from us took delivery today of a new white Volvo 4 wheel drive. Poor girl home for the past few days either laid off or in quarantine.

Sounds like your neighbor has a solid job nice car and working from home during the largest pandemic in recent Irish history

CIP4

listermint wrote: »

Sounds like your neighbor has a solid job nice car and working from home during the largest pandemic in recent Irish history

Yes but the story sounds better if you say she lost her job just after getting the car

L-M

CIP4 wrote: »

It’s nothing to do with the dealer it’s the finance company. The dealer is paid in full when you get the car they aren’t lending you the money for it. A lot of them that are handed back seem to be auctioned off.

There isn’t a lot, if any “handed back”. A very rare occasion.

What people are also forgetting is the bulk of PCPs would have been renewed in January and February so lots have people would either have already taken a new car or re finance/paid off the current one. I would say a huge percent of them are already done.

bazz26

I think next January or February with the next major round of PCP maturity that will be more telling. It's the knock on effects to the economy when we get over this.

micks_address

bazz26 wrote: »

I think next January or February will be more telling. It's the knock on effects to the economy when we get over this.

There would be quite a few due in July no?

I was due then but renewed in February

bazz26

micks_address wrote: »

There would be quite a few due in July no?

I was due then but renewed in February

Definitely but not as much as the beginning of the each new year, plus the full reputations on the global economy might not truly be felt until later in the year. This potentially could be worse than 2008.

Jeju

listermint wrote: »

Sounds like your neighbor has a solid job nice car and working from home during the largest pandemic in recent Irish history

And she will be smugly driving to work in her 4wd during the next snow crises as all her neighbours sit at home stranded with their unfit 2wd. Brilliant forward planning.

tinofapples

I'm guessing it didn't work out too well for the new owner of a 201 Juke who rocked up at Windsor Motor telling them he couldn't now afford the car, when they told him that's now it works he drove the car INTO the sales office!!






Mod - this is what really happened
https://www.dublinlive.ie/news/dublin-news/motorist-accidentally-drives-brand-new-17955665

L-M

That is a staff car

yabadabado

tinofapples wrote: »

I'm guessing it didn't work out too well for the new owner of a 201 Juke who rocked up at Windsor Motor telling them he couldn't now afford the car, when they told him that's now it works he drove the car INTO the sales office!!

That isnt what happened at all.FFS I hope you dont believe every bull**** WhatsApp message you recieve .

Atlantic Dawn

The banks are exposed to about €1.5 billion in PCP finance with Bank Of Ireland being the largest, they provide it for Ford, Toyota, Opel, Hyundai and Kia.

Fireball81

L-M wrote: »

That is a staff car

Yep, an accident....not what the WhatsApp message would have you believe.

tinofapples

yabadabado wrote: »

That isnt what happened at all.FFS I hope you dont believe every bull**** WhatsApp message you recieve .

I don't, certainly not after all the BS that has circulated during this crisis. It's a bit of banter fgs ;-)

Cape Clear

Atlantic Dawn wrote: »

The banks are exposed to about €1.5 billion in PCP finance with Bank Of Ireland being the largest, they provide it for Ford, Toyota, Opel, Hyundai and Kia.

We will see in the next couple of months just how effective the reforms and changes to banking rules brought in post 2008 are or if the banks are actually abiding by them. Any figures available on how many cars are involved.

Atlantic Dawn

Cape Clear wrote: »

We will see in the next couple of months just how effective the reforms and changes to banking rules brought in post 2008 are or if the banks are actually abiding by them. Any figures available on how many cars are involved.

Looks like around 35k new cars per year taken out with PCP...

The Central Bank economists said there was now an average of 35,000 PCPs every year, compared to 6,000 in 2012, while the average value of contracts rose from around €15,000 to over €23,000.

https://www.irishexaminer.com/breakingnews/business/alert-over-15bn-exposure-to-pcp-car-loans-834768.html

Heres Johnny

I wonder what the post corona car buying model will be. Pcp as most people know was the phoenix from the ashes of the financial crash. My guess is just actually a reduction in output and car companies merging. People will realise the folly of changing cars so regularly. A 50% plus depreciation rate on what is an expensive purchase for most people will be seen as the folly it is. A 100% rate over 10 years might become more palatable. Emissions regulations are making new cars much more expensive. As for a 10k+ premium for an electric version to save relatively tiny fuel money for most people, forget about it.

Just my 2c...

MojoMaker

Relatively tiny fuel money? €4-5 double EV charge vs €75 diesel for the same journeys?

Blowheads

Was due to change in September but can't across a nice replacement two weeks ago.
16 Merc to 18 Merc
Put 600 deposit down until end of the month
While job isn't currently at risk I'm thinking to cancel, what ye think?

Heres Johnny

MojoMaker wrote: »

Relatively tiny fuel money? €4-5 double EV charge vs €75 diesel for the same journeys?

I'll take it you're correct on those figures that you can do close to 1000kms on 5 euro of electricity as I'm not sure. Because my a6 does close to that for a tank which is about 75 euro now. That's maybe 3 weeks fuel for most people for a 15k kms per annum driver. More for some, less for others. Say 25 euro a week average on diesel/petrol, so 20 a week saving.

Your 10k premium on an electric will practically vanish over 3 years. Let's say even quarter of it is retained. That's 7500 of the premium lost, or 50 a week. No way is an electric driver saving that. I like electric cars and I'd have one in a shot, I like the drive and I like the environmental advantages but I don't for 1 second believe any of the owners are saving money at any stretch.
Electric cars will have to get much cheaper to compete. Government subsidies will be gone on them too you can be pretty confident of that.

carsfan2

Heres Johnny wrote: »

I wonder what the post corona car buying model will be. Pcp as most people know was the phoenix from the ashes of the financial crash. My guess is just actually a reduction in output and car companies merging. People will realise the folly of changing cars so regularly. A 50% plus depreciation rate on what is an expensive purchase for most people will be seen as the folly it is. A 100% rate over 10 years might become more palatable. Emissions regulations are making new cars much more expensive. As for a 10k+ premium for an electric version to save relatively tiny fuel money for most people, forget about it.

Just my 2c...

I agree with your thoughts but I think pcp will still be huge.
Manufacturers will reduce interest rates on their products and introduce large "deposit contributions" meaning the buyer doesn't have to bring much/any cash to the deal. this is what will be required to keep sales up and factories working.
I think this crash will set back electrification as car companies will not have resources to develop new models and governments will be more interested in getting economies moving than green issues.

Wildly Boaring

carsfan2 wrote: »

I agree with your thoughts but I think pcp will still be huge.
Manufacturers will reduce interest rates on their products and introduce large "deposit contributions" meaning the buyer doesn't have to bring much/any cash to the deal. this is what will be required to keep sales up and factories working.
I think this crash will set back electrification as car companies will not have resources to develop new models and governments will be more interested in getting economies moving than green issues.

Depends on what vw Merc and BMW want.
Have vw now enough capital and r&d gone into elec.

Either way to the Germans will push the EU toward what suits them to get out of this recession.

Won't be decided by green priority

Salary Negotiator

Heres Johnny wrote: »

I'll take it you're correct on those figures that you can do close to 1000kms on 5 euro of electricity as I'm not sure. Because my a6 does close to that for a tank which is about 75 euro now. That's maybe 3 weeks fuel for most people for a 15k kms per annum driver. More for some, less for others. Say 25 euro a week average on diesel/petrol, so 20 a week saving.

Your 10k premium on an electric will practically vanish over 3 years. Let's say even quarter of it is retained. That's 7500 of the premium lost, or 50 a week. No way is an electric driver saving that. I like electric cars and I'd have one in a shot, I like the drive and I like the environmental advantages but I don't for 1 second believe any of the owners are saving money at any stretch.
Electric cars will have to get much cheaper to compete. Government subsidies will be gone on them too you can be pretty confident of that.

Costs me 1c per KM in my EV versus 7-8c in my 2L diesel.

Wildly Boaring

Salary Negotiator wrote: »

Costs me 1c per KM in my EV versus 7-8c in my 2L diesel.

His point is that the equivalent ev is 10k dearer and looses 7.5k of that 10k over 3 years.

Dunno if he's right on either front

At that rate you need more than 2.5k fuel difference for it to pay over 3 years

Salary Negotiator

Wildly Boaring wrote: »

His point is that the equivalent ev is 10k dearer and looses 7.5k of that 10k over 3 years.

Dunno if he's right on either front

At that rate you need more than 2.5k fuel difference for it to pay over 3 years

Yeah I get that, just trying to make a comparison on fuel cost easier. A full charge of an EV isn’t equal to a full tank of diesel, the range is massively different.

I reckon I’ve a fuel saving of about €3.5K per year plus another €500 on tolls so for me the EV premium made sense, for others it may not.

FDave

Salary Negotiator wrote: »

Yeah I get that, just trying to make a comparison on fuel cost easier. A full charge of an EV isn’t equal to a full tank of diesel, the range is massively different.

I reckon I’ve a fuel saving of about €3.5K per year plus another €500 on tolls so for me the EV premium made sense, for others it may not.

3.5K per year equates to about 50K km a year in driving. Your figures are way off The average driver would do about half that figure, unless you are managing to do about 70K km a year on electric to save that much.

Salary Negotiator

FDave wrote: »

3.5K per year equates to about 50K km a year in driving. Your figures are way off The average driver would do about half that figure, unless you are managing to do about 70K km a year on electric to save that much.

Closer to 60K, though the current situation is impacting on that.

You’re right though, as far as I can see EV’s only really work for those doing high mileage or others who are happy to pay the premium for the newer tech.

Wildly Boaring

Salary Negotiator wrote: »

Closer to 60K, though the current situation is impacting on that.

You’re right though, as far as I can see EV’s only really work for those doing high mileage or others who are happy to pay the premium for the newer tech.

60k min here.
I see the merits in EV for my mileage.

Diesel card these days so 3 year old niceish diesel car and drive on.

Wildly Boaring

Wildly Boaring wrote: »

60k min here.
I see the merits in EV for my mileage.

Diesel card these days so 3 year old niceish diesel car and drive on.

Wife's car on PCP. We're ok.

I'd hate to see people struggle.
Surely the likes of VW bank could just extend payment phase by 2 months and a very slight increase of the montlys after a 2 month stay to cover off any additional depreciation.

Obviously if you lose the job completely they're need to be deals don't to sort people. Long as you've reasonable deposit and gmv there should be an amenable outcome

mickdw

Wildly Boaring wrote: »

Wife's car on PCP. We're ok.

I'd hate to see people struggle.
Surely the likes of VW bank could just extend payment phase by 2 months and a very slight increase of the montlys after a 2 month stay to cover off any additional depreciation.

Obviously if you lose the job completely they're need to be deals don't to sort people. Long as you've reasonable deposit and gmv there should be an amenable outcome

In the short term im sure there is no issue but this isnt going to go away today or tomorrow so we already have people cancelling cars that are arriving from the factory these days.
Dealers will go bust, not many will be in a position to buy new, finance will be impossible. It will surely be a complete mess.
Some financed cars being returned is probably the least of the problem.

yop

mickdw wrote: »

In the short term im sure there is no issue but this isnt going to go away today or tomorrow so we already have people cancelling cars that are arriving from the factory these days.
Dealers will go bust, not many will be in a position to buy new, finance will be impossible. It will surely be a complete mess.
Some financed cars being returned is probably the least of the problem.

Cancelling their orders for new cars? Thats mad that its happening so quickly.

My PCP is up in Sept. Have not made a decision on what I will do, was looking at changing but now I am wonder if I will just refinance.

nedkelly123

Not PCP but just showing what can be done if you choose the right car..
in 2011 i bought a 2002 Manual Porsche 911 (996.2) C4 for 16k...
9 years later the car is worth 23k to 24k ...
even if i sold it for 16 k .. i had 9 years of 911 motoring for zero cost ..

mickdw

yop wrote: »

Cancelling their orders for new cars? Thats mad that its happening so quickly.

My PCP is up in Sept. Have not made a decision on what I will do, was looking at changing but now I am wonder if I will just refinance.

Coupe of people on here cancelling or thinking about it so its likely widespread.

ShadowHearth

nedkelly123 wrote: »

Not PCP but just showing what can be done if you choose the right car..
in 2011 i bought a 2002 Manual Porsche 911 (996.2) C4 for 16k...
9 years later the car is worth 23k to 24k ...
even if i sold it for 16 k .. i had 9 years of 911 motoring for zero cost ..

And how many miles you put on it?

I do 25k km a year and I am not sure classic Porsche would survive it, without major issues.

Don't understand me wrong, I like stuff like this, but it does not work in real life like that. If it would, I would still drive my r33 skyline.

nedkelly123

ShadowHearth wrote: »

And how many miles you put on it?

I do 25k km a u

bought it with 135k .. about 225k on it now .. hasnt missed a beat

mickdw

nedkelly123 wrote: »

Not PCP but just showing what can be done if you choose the right car..
in 2011 i bought a 2002 Manual Porsche 911 (996.2) C4 for 16k...
9 years later the car is worth 23k to 24k ...
even if i sold it for 16 k .. i had 9 years of 911 motoring for zero cost ..

There were some opportunities with the likes of porsches during and after the last recession where they were available for nice prices. Of course few bought as it didnt appear that they were going to be worth anything more anytime soon. The people like yourself who seem to have hit at the right time re recession and also picked a 996 at its least desireable time are seeing the gains now as good ones are getting rare so excellent work.
997 appear to be the same price for the last number of years as the booming ecomony brought more interest. I can see some bargains there shortly.

ShadowHearth

nedkelly123 wrote: »

bought it with 135k .. about 225k on it now .. hasnt missed a beat

9 years less then 10k a year.... Yeah...

nedkelly123

ShadowHearth wrote: »

9 years less then 10k a year.... Yeah...

Yeah ?