PCP experience with Porsche

[Eon]

Hiya
Have always bought cars outright with cash and was going to do the same with my new Macan S order, but I just wanted to check what all the fuss was about with PCP.

Obviously the dealers are keen to sign you up as the amount of interest is ludicrous if you take it to completion. But the dealer is mentioning that on a four year PCP deal they will be chasing you down after 18 months to 2 years to swap the car. Just wondered if anyone has done this and their experience with Porsche? We’re you in pocket/ out of pocket, were offers on existing car and new deals more favourable?

Am meeting them next week for another drive and a chat about finance etc-if it gets me another playing a new Macan before I buy then it’s worth it
Cheers!

[MCDK]

How you finance it in no way has any impact on whether you can change it after a couple of years.

[Paul]

^^
if the car is on finance, no matter what the type of finance, any good dealership will be chasing you when the residual value vs finance outstanding gives roughly a 10% equity for the next deposit, or they calculate they can change you for a similar monthly payment.

[Eon]

How you finance it in no way has any impact on whether you can change it after a couple of years.

Wow! Thanks!?!
Sorry, was just exploring an option that is alien to me and was after some friendly opinions.

[SAC1]

Hi Eon

The difference I find with Porsche is that they give no discount off the vehicle. Nor do they give any finance deposit incentive.

I used PCP on four new Mercs as I got circa 15% discount and £1k incentive. I then walked away at the end of the contract period, as no equity left in them. Happy with that as still better than the depreciation hit if I'd bought them for cash.

With Porsche an outright cash buy is king in my book.

[CharlesElliott]

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.

[Eon]

^^
if the car is on finance, no matter what the type of finance, any good dealership will be chasing you when the residual value vs finance outstanding gives roughly a 10% equity for the next deposit, or they calculate they can change you for a similar monthly payment.

Cool! Thanks!

[Paul]

This is also worth a read....

viewtopic.php?f=20&t=8126&hilit=PCP

[Virage11]

The difference I find with Porsche is that they give no discount off the vehicle. Nor do they give any finance deposit incentive.

[MCDK]

And the best bit of advice is don't take Porsche finance. As mentioned above they do not offer any discount or incentives to take their finance and in return they charge you a much higher interest rate. There are more competitive similar type finance schemes available, Clydesdale bank is one route many have found to be very competitive.

As with any finance product you pay interest that's the nature of the beast. Some people are just fine with that and others think it's the work of the devil. Choose what suits you and don't let the dealer self interest cloud the issue.

This is a great friendly forum so ask any questions you want.