Is PCP a good way to finance a car?

joer said:
If you take PCP you only have a limited driving "allowance". You can only have your car serviced by the place where you bought it. If there are any marks or scratches on it then that can have a bearing , so I believe.
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You have the option to set the driving allowance, and even if you go over that, it will only have a marginal effect on the trade-in value should you choose to roll-over onto a new PCP deal.

You are free to have the car serviced anywhere you like, unles you know of a dealer / make that are enforcing this? Any I've looked at have no restriction on servicing.

The T&Cs will allow some scratches and wear and tear, though full depth scratches over a couple of inches will have an affect as will bad dents or damage. Again, only affects the value if you want to roll-over onto a new deal.
 
IrishGunner said:
Can you get PCP on second hand cars. Just doing some research and wondering if this is an option?
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First Auto Finance are offering a PCP package available on second hand cars up to three years old at a rate of 8.9%. That covers all franchised dealers and the majority of independents. Some makes including Audi & BMW offer their own more used car PCP deals, suggesting more competitive rates, but looks like you need to contact them to confirm what they are.
 
In relation to PCP is it better to have a bigger deposit. So we have 2 cars and will use these with possible a cash top up(own money) to purchase car. Thus fewer payments over the term and after 3 years car should not depreciate that much....hopefully and we can use this as deposit to upgrade if we choose to do so?
 
A larger deposit will mean lower monthly repayments, but there's a max deposit allowable on many PCP deals. At the end of the 3 year deal, the car is likely to be worth more than the agreed final value so long as it's in good condition and that model/spec level is in demand. But if you choose to roll on to a new PCP deal, unless you come up with more cash for a deposit, your monthly repayments will increase.
 
Good article in the Irish Times : http://www.irishtimes.com/life-and-style/motors/car-sales-nervously-reliant-on-pcp-1.3088002

This bit has me worried:

In Ireland, PCPs are not licenced as a specific product, but comer under general financial conduct rules. ......the Central Bank when asked said that PCPs are a form of hire purchase and are therefore not really within the remit of the Central Bank. They are provided by “financial intermediaries” such as a car dealer and the credit agreements drawn up under a PCP are normally looked after by the Competition and[broken link removed] (CCPC).

As of yet, the CCPC is not looking at making PCP or any form of car hire purchase a specifically licenced product. A spokesperson for the CCPC told The Irish Times that “the Central Bank’s Consumer Protection Code, in particular, chapter five, requires regulated financial services providers to ‘know their customer’ in terms of assessing affordability and suitability of the product. However, the Code does not apply to certain categories of financial products including hire purchase and PCP. We believe the market, particularly the business practices of certain providers in the UK, is quite different to that in Ireland and that some of the practices of concern to the Bank of England may not be relevant in the Irish market.”


Major cop-out by the Central Bank. Given what happened to this country in 2008 the CB should be all over this. As for the CCPC, they are not even looking to to make PCPs a licensed product! Even better, the phrase "Ireland is different" is almost used.
 
More references to Sub-Prime lending:

http://www.irishtimes.com/business/...of-unregulated-finance-for-new-cars-1.3093726

One in three buyers of new cars in Ireland is using a form of finance that is entirely unregulated.

In the Irish market, subprime lenders have been picking up car finance business. In November 2016, Bluestone Asset Finance announced it had completed a €25 million securitisation of an Irish car finance portfolio. The company describes its customers as those who “are self-employed, have little or no credit history or who experienced financial difficulties during the financial crisis but can now demonstrate a stable income”.


Given the massive increase in purchases by PCP I really think the Central Bank needs to step in here.

Also, I note that we almost balanced the books as a country in 2016 - has VRT replaced Stamp Duty ????
 
An on-the-fence article from the Indo with references to sub-prime in the UK and the report due by the SIMI (which can probably be taken with a grain of salt!)
 
Yeah, Firefly, saw that too yesterday, also said that UK 2nd hand diesels will be flogged into this market due to impending legislation and emissions testing in the UK. More petrols are sold in the UK now.
It will be interesting to see how those on PCP fare when they trade in next year as PCPs really took late 2014 and start of 2015.
 
I just got a new car and financed it via PCP. It suits me because I was able to max out the deposit and I know that I'll have a significantly higher income come the end of the 36 months as well as an inheritance, so will be happy enough to pay the balloon (or roll over)

One thing I couldn't get over was how lax the underwriting was. I appreciate that the finance company aren't too bothered given that they can repossess the car if required, but if my experience is anything to go by, there's probably a lot of people driving around in new cars they can't afford. There's definitely another credit bubble in PCPs. If enough of them go bad it could be car finance companies looking for bail outs next.
 
24601 said:
One thing I couldn't get over was how lax the underwriting was.
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I'm not surprised as I've seen probably the biggest car dealership in the South east advertising that " Bad credit history is not a problem" in terms of securing car finance.
 
24601 said:
One thing I couldn't get over was how lax the underwriting was.
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That's nothing new with PCPs, they've always been very loose with credit for new cars. I remember speaking to a guy a couple of years back who was having a moan about not being able to afford to buy a house. I asked him about the BMW coupe he was standing beside, and he then admitted he had borrowed to buy it and was still paying off his previous two cars also!!
 
Leo said:
who was having a moan about not being able to afford to buy a house. I asked him about the BMW coupe he was standing beside, and he then admitted he had borrowed to buy it and was still paying off his previous two cars also!!
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Consider that story plagiarised the next time someone tells me that it's hard to save up to buy a house.

Brendan
 
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