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Author Topic: Pcp's  (Read 25608 times)

Offline Top Cat

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Re: Pcp's
« Reply #15 on: April 23, 2011, 10:27:23 pm »
Quote from: andrewparker on April 23, 2011, 10:22:59 pm
Out of interest, what happens with PCP finance if you loose your job, or for any other reason are unable to make the monthly repayments? I'm guessing you don't own the car, so you'd be unable to sell it to finance th debt...

Dont quote me on this but i think if you are over half way through the term and cant afford the up keep then you can just hand it back to them.  :innocent: I think you end up with a big X on your credit rating though.  :happy2:
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Offline Beddie

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Re: Pcp's
« Reply #16 on: April 23, 2011, 10:34:20 pm »
Quote from: andrewparker on April 23, 2011, 10:22:59 pm
Out of interest, what happens with PCP finance if you lose your job, or for any other reason are unable to make the monthly repayments? I'm guessing you don't own the car, so you'd be unable to sell it to finance the debt...

Exactly the same if you couldnt keep up loan payments to the bank or finance house...
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Offline Beddie

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Re: Pcp's
« Reply #17 on: April 23, 2011, 10:37:59 pm »
Quote from: Top Cat on April 23, 2011, 10:27:23 pm

Dont quote me on this but i think if you are over half way through the term and cant afford the up keep then you can just hand it back to them.  :innocent: I think you end up with a big X on your credit rating though.  :happy2:

Although i am technically quoting you lol, you are quite correct TC  :happy2:

Due to recent changes and as long as its done correctly you no longer end up with the credit rating of a Jeremy Kyle guest...
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Offline andrewparker

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Re: Pcp's
« Reply #18 on: April 23, 2011, 10:40:12 pm »
Quote from: Beddie on April 23, 2011, 10:34:20 pm
Quote from: andrewparker on April 23, 2011, 10:22:59 pm
Out of interest, what happens with PCP finance if you lose your job, or for any other reason are unable to make the monthly repayments? I'm guessing you don't own the car, so you'd be unable to sell it to finance the debt...

Exactly the same if you couldnt keep up loan payments to the bank or finance house...

Is that a correct comparison though? If you finance a car through an unsecured loan and are unable to keep up payments on the loan, you can sell the car to pay off (hopefully) most of the debt, however if you end up being unable to keep up PCP payments won't they reclaim the car and pursue you for the debt for the remainder of the term of the agreement?
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Offline Beddie

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Re: Pcp's
« Reply #19 on: April 23, 2011, 10:48:25 pm »
Yeah i'd argue it was a decent comparison imo...

Car A: Bought for 10K with an unsecured loan, 2 moths later you cant afford the repayments so sell for say 8K and have to find the remainder to clear the loan...
Car B: Bought for 10K on PCP, 2 months later you cant afford the repayments so sell for say 8K and have to find the remainder to clear the loan...

Assuming that both cars are bought for the same amount and therefore the same amount of financed money and a similiar APR you are effectively in the same boat in a brown river without a paddle either way...

I've bought and know plenty of people who have bought cars owned by finance companies, it's suprisingly easy nowadays  :happy2:
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Offline andrewparker

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Re: Pcp's
« Reply #20 on: April 23, 2011, 10:56:20 pm »
Ah right, to be honest I wasn't aware you were able to sell the car with a PCP deal until you had reached the end of the agreement and paid the final payment.

So what's in it for them? Presumably the total amount you pay is greater in the long run, especially if you take the option to purchase?
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Offline no golf clubs at all

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Re: Pcp's
« Reply #21 on: April 23, 2011, 11:03:19 pm »
I'm glad I brung this up.  :popcornsoda:
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Offline andrewparker

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Re: Pcp's
« Reply #22 on: April 23, 2011, 11:05:20 pm »
Quote from: no golf clubs at all on April 23, 2011, 11:03:19 pm
I'm glad I brung this up.  :popcornsoda:

Yeah, I'll be honest, I've never looked into them. Cheers for the info Beddie, very interesting :happy2:
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Offline Beddie

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Re: Pcp's
« Reply #23 on: April 23, 2011, 11:10:13 pm »
Quote from: andrewparker on April 23, 2011, 10:56:20 pm
Ah right, to be honest I wasn't aware you were able to sell the car with a PCP deal until you had reached the end of the agreement and paid the final payment.

So what's in it for them? Presumably the total amount you pay is greater in the long run, especially if you take the option to purchase?

There are many ways to get out of the agreement in the same way as you would with a straight finance deal...

One way i have done it when buying is to have the seller get a settlement figure, head to the bank with them and you pay the finance company the outstanding amount and any extra to the seller, done correctly its very simple and the reverse if you are the seller  :happy2:

I've 'sold' 3 cars that were under a PCP deal before the end of the term, when i say sold i mean traded in but it's effectively the same, new car dealer gets a settlement figure and pays the finance company the outstanding balance and any extra to me for a deposit on the new car...

I can get a settlement figure over the phone in 30 secs..

Yeah you are correct that there is a financial penalty to a PCP over a straight finance or loan deal if you take both deals to completion (including balloon on the PCP)

In the case of my current ED30 i will pay £897 more for the 3 year PCP if i choose to pay the balloon than i would have done if i had took 5 years finance, this for me is worth the extra options i have within the PCP and also allows me to get a better deal if i wanted to pay the balloon, by that i mean that the interest rate is much lower now than when i started so i have the option to finance the remaining balloon at a lower finance rate and hence clawing back some of my deficit...
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Offline stealthwolf

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Re: Pcp's
« Reply #24 on: April 24, 2011, 12:10:04 am »
I bought my car on PCP. I had a relative who changes cars every three years and at the time it seemed like a good idea. Little did I know how much I was going to fall in love with the car, especially an ED30.

Paying it off in full makes life a lot easier.
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Offline Beddie

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Re: Pcp's
« Reply #25 on: April 24, 2011, 12:24:06 am »
Couple of things i forgot to point out...  :happy2:

Modding a car on PCP is technically frowned upon as the finance house have an interest in the car until at the very least the halfway stage, never stopped me although i dont go mad with the mods on any car tbh and it's never presented a problem and the VW dealers never bat an eyelid, keep up the payments and dont hand it back dragging its arse on coilies and running stage 3 and it's usually fine lol

I do however remember a guy on seatcupra.net who had a very heavily modded MK2 Cupra which developed an ECU/starting fault after an intercooler fit, had it towed to Seat and demanded they fix it under warranty etc, got a bit shouty when they couldnt and then threw his toys out at them, they retaliated by throwing their toys out and demanding he return their car to standard and pay the remaining finance, so play nice is the moral of that story lol!

Also you are not obliged to take the PCP through VW/Audi etc, there are plenty of 3rd party companies who will fund the deal on PCP via the supplying dealer on your behalf and you can use this facility to get a better deal from the dealer or simply get a better deal from the 3rd party...

As with any finance deal, resist the temptation to have the road tax/gap/autosh*te etc thrown on the deal as you'll pay interest on it all and just make sure you go over ever aspect of the deal a good few times before pulling the trigger  :happy2:

PCPs are in no way the golden egg of cheap car buying but can work extremely well on the right car and personal circumstances, for me they retain monthly affordability and some stability of the car value in what is an uncertain market but i appreciate that some people will find the idea of a PCP off putting  :smiley:
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Re: Pcp's
« Reply #26 on: April 24, 2011, 07:32:47 am »
I was under the impression the 'PCP' is a personal lease plan so you never own the car until that 50% payed thing and even then you need a letter of permission to sell it?

You can walk in at any time and hand the keys back?

Or have things changed now because people were just walking in and handing in cars which weren't worth sh*t?

I always go on money supermarket and get the cheapest loan as your in a good bargaining position and you pay a bit off every month.

AND ITS YOURS TO SELL, MOD, CRASH, KEEP! Kind of! :signLOL:
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Offline no golf clubs at all

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Re: Pcp's
« Reply #27 on: April 24, 2011, 07:36:17 am »
Yeah I reckon if you are the person who takes a car loan out for 3 years and keeps the car for six then it's not for you.

If like me you accept there's likely to be a monthly charge then it makes less odds.

I'm in the position where I'm paying something for the next 2 years on a 5 year old car. I can start again from scratch, get a dsg GTD (with 3k) 2009 on it for an additional £100 per month for 3 years. At the end of the deal I'll have to pay £8k to keep (no chance) or take the difference if greater to deposit a new one or walk.

Seems a lot for a 2009 golf. Which is why I posted really.

If I were sane I'd keep the gti for the two years then trade in but if I do I guess in 2 years I'll have a 7 year old car with 80000 miles on it as opposed to a 3.5 year old GTD (still warrantied under Vw extended) with 23k on it.

I am not sure about it tbh.

I may just check out a brand new car on a similar pcp package first. Though a new golf dsg these days with any spec hits the >£25,000 bracket!  :sick:


« Last Edit: April 24, 2011, 07:39:06 am by no golf clubs at all »
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Offline Greeners

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Re: Pcp's
« Reply #28 on: April 24, 2011, 08:18:50 am »
You can't hand back at any time as such without penalties. You can hand back penalty free however once you have paid at least half of your payments. So if you have a 36 month deal you can hand back after payment 18.
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Offline garrardrj

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Re: Pcp's
« Reply #29 on: April 24, 2011, 10:19:10 am »
Do any of you ever add up what the car actually costs on pcp or other finance ? My Sister had a 325 m sport coupe a few years ago , it was £700 a month (all servicing/tyres etc included)  and after 3 years she gave it back and had nothing to show for it . She spent £25k and had nothing ! Seems ridiculous to me as i have always bought cars for cash with no finance :innocent:
or
The £700 (after tax) a month really was the result of earning around £1200 month , so she had earnt £42k to pay for this car !


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