PCP n00b

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Kasfranks99
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Post by Kasfranks99 »

The main thing is you understand PCP and know what you plan to do which is good even though situations can change.
Clearly you have thought about this which is great 👍
Too many (mainly younger folk) getting themselves In a lot of PCP mess which is yet to unfold into the mainstream imo.

Don't forget you can still negotiate the price of the car and get that discounted first and then get the PCP deal. Generally Volvo are heavily discounted but maybe not in the first few months of release.
GTS 😀

Col Lamb
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Post by Col Lamb »

If you take my advice you will steer clear of the Mark 1 version of something with developing technology, give it a year or so for the bugs to be ironed out.

The analogy is related to software where generally you do not upgrade until others have beta tested the update first. Twenty plus years of Adobe software drilled that into me.
Col
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goron59
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Post by goron59 »

I don't get the software mk1 analogy wrt PCP...?
Used to have 2016 Macan Turbo PHCKCL70
Previously a 2014 Macan Turbo.
Now a 2021 Tesla Model 3 LR
Retired
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Post by Retired »

goron59 wrote: Fri Jul 28, 2017 12:53 pm I don't get the software mk1 analogy wrt PCP...?
I think he means the car..........?
Retired
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Post by Retired »

Kasfranks99 wrote: Fri Jul 28, 2017 8:09 am depending on your monthly payment restrictions you can save thousands on the overall cost buy asking them to increase the monthly payments and reduce ththe final payment down as much as possible.
When I was looking at an Audi of similar value there was a finance incentive but I wanted to pay cash. Basically the final payment was less that £2k for the car and interest over the whole term was very low and I would of just paid the finance off in a few months anyway.
PCP is great if your situation does not change and you don't want to own the car outright and want low monthly payments. Overall it can cost you especially if you do more miles.
A friend of mine has to pay thousands just to hand the car back as she has far exceeded th agreed millage.
It's good that you have looked at the overall figure which unfortunately some have not and just see a monthly figure which is what the sales guy generally presents you with to do the deal.
At the end of the 3 years you hand car back and find a new deposit etc or you pay the balloon payment and car is yours.
If like me you are a low millage / keep car in great condition then PCP is very very expensive over the long term.

Not sure I follow.

If you reduce the final payment and increase the monthly payments and hand the car back at term this is more expensive than a high GFV with lower monthly payments. You are paying off capital down to the final value, this will cost more. Doing this I suppose at term you could end up with a final payment which is lower than the worth of the car. Paying for the car would then make sense if only to buy it and then sell it to recoup some of the extra you will have paid by then.

Edit to add doing this (increasing monthly payments and reducing final payment) only makes sense if you know you want to keep the car. But if you know that then HP or a loan almost always makes more sense. Although manufacturer incentives to use PCP can tip the balance. Need to do case by case calculation.
Last edited by Retired on Fri Jul 28, 2017 4:12 pm, edited 1 time in total.
Kasfranks99
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Post by Kasfranks99 »

Retired wrote: Fri Jul 28, 2017 3:53 pm
Kasfranks99 wrote: Fri Jul 28, 2017 8:09 am depending on your monthly payment restrictions you can save thousands on the overall cost buy asking them to increase the monthly payments and reduce ththe final payment down as much as possible.
When I was looking at an Audi of similar value there was a finance incentive but I wanted to pay cash. Basically the final payment was less that £2k for the car and interest over the whole term was very low and I would of just paid the finance off in a few months anyway.
PCP is great if your situation does not change and you don't want to own the car outright and want low monthly payments. Overall it can cost you especially if you do more miles.
A friend of mine has to pay thousands just to hand the car back as she has far exceeded th agreed millage.
It's good that you have looked at the overall figure which unfortunately some have not and just see a monthly figure which is what the sales guy generally presents you with to do the deal.
At the end of the 3 years you hand car back and find a new deposit etc or you pay the balloon payment and car is yours.
If like me you are a low millage / keep car in great condition then PCP is very very expensive over the long term.

Not sure I follow.

If you reduce the final payment and increase the monthly payments and hand the car back at term this is more expensive than a high GFV with lower monthly payments. You are paying off capital down to the final value, this will cost more. Doing this I suppose at term you could end up with a final payment which is lower than the worth of the car. Paying for the car would then make sense if only to buy it and then sell it to recoup some of the extra you will have paid by then.
This works if you want to own the car outright.
If you get a PCP deal ask them to reduce the final balloon figure as low as they can. They really do not want to do this but you need to ask nicely.

This happened to me as mentioned from Audi as they had a £2500 incentive to take PCP. I wanted to pay cash so did not want to pay the interest.
The monthly payments were over 24 months and final payment on a £60k car was £2k. Bottom line i always look at the final figure of what the car will cost me to own outright. This reduced that final figure by around £3000. I would of paid the balance off after 3 months which is the minimum term saving a lot more money in interest (Would of probably cost me a few hundred pounds in interest only) but gained the £2500 by taking PCP. As well as an additional £7k ish discount on the car to start with.
I did not purchase the Audi in the end anyway but the deal was there to be had all in writing. Ended up getting a Mini Countryman S all 4 and finance or cash is the same price as no incentives... I got my discount paying cash or will do when it arrives in September.

Its no good if you want to hand the car back. A number of manufacturers have a PCP incentives but if like me you want to own the car outright at the lowest possible cost after 3 years then this works and i decide what to do not them.
GTS 😀
Retired
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Post by Retired »

VW / Audi PCP incentives, I've done this, taken one out to get the discount, with both VW and Audi, and then cleared the finance. Didn't wait three months to so do, more like three days. The dealers in both cases were keen to tell me I had to wait three months. I suspect that this is because Audi /VW claw back bonus / commission if the PCP doesn't 'stick'. VW finance were unconcerned, must happen quite a lot.
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Paul
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Post by Paul »

+1 (or rather +2, once with my wife's BMW and then with my youngest's Polo...£1750 and £1250 as I recall..)
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