There's loads of threads on CS about it - a fair few have got pcp deals so plents of good info. Even my mum has a car on pcp!
Basically you pay a deposit, then monthly payments for say 3 years, then you get the option of.... Paying a balloon payment. Giving the car back and getting the agreed price for the car (you agree a price at the start of the term) Or you can simply hand the car back and walk away. I decided against it because I couldnt hand over money every month and end up with nothing at the end!
I think sometimes it works out better if the guaranteed final value is better than the loss through depreciation. So sometimes better to PCP than not.
Aye if you cam get a decent price for the car at the end, then you can carry the extra money over and use it as your next deposit. But what happens if you lose out? Do you have to pay the extra yeah?
But the GFV is usually a minimum that the car will be worth, so its rare that you would make money by the car depreciating more than the gfv.
Yup, they're usually very pessimistic in terms of the GFV from what I've seen though. It's why for example if you had a Golf and a Megane of the same RRP the Megane would be more expensive on PCP due to the lower GFV at the end.
Yes I guess you do. I don't think a Renault is the best bet for PCP is you want neutral cost ( payments over 3 years equal to the depreciation) as Renaultsport aren't exactly known for their cast iron residuals! I remember on Pistonheads seeing a PCP deal on a BMW 6 series which effectively worked out as leaving you in a better position at the end of the contract than if you'd bought it outright.:eek:
Right we've been into BMW for a second hand 120d and the salesman who is actually a mate of mine , anyway the deal was 5k down and £222 per month on a 4 year deal or 3k and £270 a month on the same deal he said I should be able to walk away after 30 months and not have a penny to pay, I worked it out that I'd lose the same amount if I were to buy the 116d sport out right and keep the car for 3 years, I think I'll just look for one around 3 years old , it seemed a good deal though, free tax for the first year then £30 after that, deal inc service pack , but like others have said when you walk away with nothing after the term
Depends on how long you keep the your cars? why put all your money into an item that's loosing money, and then you want to change it after 3 or 4 years anyway? Lets say a £15,000 car - (these are very rough numbers, before I get shot down) Normal HP deposit -£2000 borrowing £13,000 Interest £2500 48 months at £322 per month total payment inc interest £17,456 PCP (or as Renault say 'Selections'h deposit -£2000 borrowing £8000 interest £2000 (most PCP's have a lower interest as on most your not paying much or any interest on the final payment) 48 months at £208 final payment £5000 (last payment, where you can pay off, re finance to keep the car, part exchange it or walk away) total payment inc interest and final payment £16,984... Plus if you want to keep the car and can't afford to pay the final payment in one lump, and have to re finance it.. Lets add £1000 interest. So total £17,984. The PCP is better if you budget yourself each month, as your driving a nice car for a lower payment. Lets say 36 months in you want to change the car... Settlements on both - 12 x £322 - £3864 (HP) 12 x £208 - £2496 + £5000 final payment £7496 going on the above, say the car is worth £8000 after 36 months, you'll be getting £4136 back from having it on HP and £504 back from the PCP. BUT you need to remember you have being paying less each month! If its a car your keeping for a long time and can afford the higher payment go HP. But if you think you'll change the car after 3 or 4 years PCP, as let's be honest you will not care what the car is worth as you'll be wanting a new one and been living with a lower payment each month. just my 2 pence worth.....
Cheers , I think we will end up looking for a 2.0 petrol as she only does around 8-10,000 miles a year so may not be worth paying the extra for a diesel
To be able to walk away, you must have paid half the amount financed, including ALL interest. But be warned, finance companies do not like it, they can't black list you as such but you'll find it hard (shall we say) to get BMW finance again, they will more than likely want a 35-40% deposit next time. Hope that helps.. Dan
Cheers dan I don't think I'll bother, my mrs has just said lets go buy one out right for around 12k , it'll be ours then
You will lose money either way. If you buy a 12k car and sell it 2yrs later for 7k, you've lost 5k in depreciation. If you lease a 12k car and hand it back after 2yrs, you've lost 5k in finance. You spend money either way, its just a matter of how
If your going to buy one outright then have a look at auctions. For 12k you will get a car that probably retails around the 14k mark. Search BCA and see when BMW are sending their cars through. That way you wont lose as much when you come to sell.
I looked into both of these when purchasing a new car and it appears that it was never explained correctly. If It had been I would've probably looked more into HP as changing the car after 36 months + having a large sum back for desposit would've been very handy. Nevermind!
