Ask the OPC if they do a short term loan. 12 months from memory.
2 years ago I got under 1%. Not sure what’s available now.
Paid deposit on 24 month interest free credit card.
Money all stayed in my bank earning.
Alternative is to pay cash is best value and always has been in my experience on all my cars and has always outperformed any PCP deal by some margin.
PCP experience with Porsche
-
- Posts: 1
- Joined: Fri Jun 21, 2019 5:17 am
- Location: Alberta
- Contact:
CharlesElliott wrote: ↑Thu Jan 31, 2019 8:08 pm In pure financial terms, PCP costs you a lot of money. You are paying interest on the full value and paying back capital to the tune of the difference between the purchase price and the GFV. The reason dealers like it is a) because they make money on the finance and b) it is much more likely to produce a turnover of cars for them.
Let's say you buy a 100K car, 20K down with a GFV of 60K over three years. You pay your monthly payment...and after 18 months or so, the dealer rings you up and says he can get you into a new car for the same monthly fee - maybe with you putting in 'just 5K' - so you take it. Dealer has sold two cars, you are now in a new car for the same payment so it 'feels' good.
What's happened is your 100K car is worth 85K to the dealer after 18 months, which is enough to pay off the loan and put 20K into the new car, which then results in the same financials.
I've simplified it and not worked out the maths in detail, but you get the idea. Financially though, you are for ever paying interest on a 100K loan which isn't so good.
Hey Charles,
Thank you so much for explaining it with an example, this will really helpful for me as I am buying a new car.
I got a one year 0% deal on HP from my OPC. The deposit was very small. Didn't really save me much with the low interest rates for savings but better in my bank than theirs. And made the SE happy, guess must have been an incentive on it.
PCP s are quite tricky because unlike HP you cannot just return the car and pay the difference between its current value and outstanding loan. I know people who have been made redundant whilst on a PCP and had to continue with the PCP because the penalties for early redemption are prohibitively bad. So I would never take a PCP.
PCP s are quite tricky because unlike HP you cannot just return the car and pay the difference between its current value and outstanding loan. I know people who have been made redundant whilst on a PCP and had to continue with the PCP because the penalties for early redemption are prohibitively bad. So I would never take a PCP.
?? PCP or HP - you can own the car whenever you want provided you settle the outstanding balance. There are no penalties for early settlements with either method.davewf wrote: ↑Fri Jun 21, 2019 7:59 am
PCP s are quite tricky because unlike HP you cannot just return the car and pay the difference between its current value and outstanding loan. I know people who have been made redundant whilst on a PCP and had to continue with the PCP because the penalties for early redemption are prohibitively bad. So I would never take a PCP.
Are you maybe thinking of personal lease or personal contract hire where you are indeed locked in for the whole term....
1st Sapphire SD
2nd Sapphire GTS
viewtopic.php?f=23&t=4296
Current 992 S Cab
viewtopic.php?f=23&t=9845&p=196465#p196465
2nd Sapphire GTS
viewtopic.php?f=23&t=4296
Current 992 S Cab
viewtopic.php?f=23&t=9845&p=196465#p196465
This is spot on. Buying a new car is a luxury few can afford. Except if you then get finance added which then opens up the world to the rest of the world which mostly means people who can’t afford it end up paying huge interest charges and the heftiest part of the depreciation curve for people with cash to then buy the car used.CharlesElliott wrote: ↑Thu Jan 31, 2019 8:08 pm In pure financial terms, PCP costs you a lot of money. You are paying interest on the full value and paying back capital to the tune of the difference between the purchase price and the GFV. The reason dealers like it is a) because they make money on the finance and b) it is much more likely to produce a turnover of cars for them.
Let's say you buy a 100K car, 20K down with a GFV of 60K over three years. You pay your monthly payment...and after 18 months or so, the dealer rings you up and says he can get you into a new car for the same monthly fee - maybe with you putting in 'just 5K' - so you take it. Dealer has sold two cars, you are now in a new car for the same payment so it 'feels' good.
What's happened is your 100K car is worth 85K to the dealer after 18 months, which is enough to pay off the loan and put 20K into the new car, which then results in the same financials.
I've simplified it and not worked out the maths in detail, but you get the idea. Financially though, you are for ever paying interest on a 100K loan which isn't so good.
As others have said you should take finance if :
- discount associated justifies it. I have seen crazy discount from Merc and Bmw
- if the rate is very low.. anywhere between 0 and 2% I consider as very low
- sometimes the 2 above are combined with GFV which is unreasonably high.. so might save some depreciation costs
All three above rare for a Porsche, they just don’t need whilst merco and bmw seem to want to go down the buyer spectrum by offering deals for people who can’t afford their cars to be under the impression they can.
No different than a 24months iPhone contract sold to a person who should probably not be spending 1.2k on a vanity object.
But hey
-
- Similar Topics
- Replies
- Views
- Last post
-
- 14 Replies
- 2179 Views
-
Last post by Neil1911
-
- 3 Replies
- 700 Views
-
Last post by ScotMac
-
- 14 Replies
- 753 Views
-
Last post by Nuclear Nick
-
- 11 Replies
- 1417 Views
-
Last post by bennachie
-
- 30 Replies
- 2785 Views
-
Last post by Plyphon