Is PCP a good way to finance a car?

[Bronte]

the out is that the GFV is set at such a level that if you did just hand it back that they are comfortable that the car will be worth more. its a risk obviously but one they must be prepared to take. PCP has functioned for years in the US and the UK.

second car was an audi a5 (not sure what difference this makes anyway) and the financing was probably something like 37k, 45k less the 'equity' in the first car (residual deposit)

again working from memory here

'Residual deposit'

We didn't hear of that before. So the garage decided they'd allow you 8K off the second car. How I wonder did they calculate that.

What was so great about the new spec that you switched. It's because you're really into cars I presume. Which is fine, I get that. I'm more concerned about how that can be manipulated on vulnerable customers.

In your case it's clearly different. You have plenty of cash and just choose to finance this way. You're not really, it seems to me, interested in the financials.

What I'd really like to understand is, would you have actually paid 45K out of your savings for a new car, or would you have been more sensible and gone for a family car that costs say 20 to 30K (how much is a decent family car in Ireland folks?)

 

[Bronte]

i

i shudder to think what tyres you have on the car

Odd statement. I go to a reputable dealer. For two decades now !

 

[Bronte]

No I think you are wrong Bronte. Any examples I have seen show that the loan is cost price - deposit - gmfv. See http://www.consumerhelp.ie/pcp or http://www.hyundai.ie/pcp/

Ok, but how come Blackrock came back to us at post 108 and said:

and apologies, i was wrong, the interest is charged on the whole sum, any pcp i have considered either had 0% interest or lower than 2% so i didnt give it much thought, mea culpa

Also for your cons - just a suggestion

People purchase a higher priced car than they would if they were using their own month or borrowing directly from a bank/cu

Which leads to higher costs, insurance, tax, tyres

(It never ceases to amaze me the way the garage reacts to my husband than with me. Two years ago the guy was apologising to me the cost of my service €209 because they had to do something extra, can't remember now what, but I think it helps arriving in my much loved tin can and dressed to match. And my husbands car is all electric and it cost something crazy to fix a pipe for the water to the wipers because a rat ate it)

 

[Ceist Beag]

Ok, but how come Blackrock came back to us at post 108 and said:

and apologies, i was wrong, the interest is charged on the whole sum, any pcp i have considered either had 0% interest or lower than 2% so i didnt give it much thought, mea culpa

Not sure Bronte but all the examples show it is only on the difference less the GMFV - Google PCP examples Ireland and you'll see they all show this.

Also for your cons - just a suggestion

People purchase a highter priced car than they would if they were using their own month or borrowing directly from a bank/cu

Which leads to higher costs, insurance, tax, tyres

I think I covered that one in point 5 (below)?
5. It can be very tempting to just look at the monthly payments when making the decision and lose fact of the overall cost of the package. This may be fine for some but may entice in others who are not so savvy.

 

[Blackrock1]

'Residual deposit'

We didn't hear of that before. So the garage decided they'd allow you 8K off the second car. How I wonder did they calculate that.

What was so great about the new spec that you switched. It's because you're really into cars I presume. Which is fine, I get that. I'm more concerned about how that can be manipulated on vulnerable customers.

In your case it's clearly different. You have plenty of cash and just choose to finance this way. You're not really, it seems to me, interested in the financials.

What I'd really like to understand is, would you have actually paid 45K out of your savings for a new car, or would you have been more sensible and gone for a family car that costs say 20 to 30K (how much is a decent family car in Ireland folks?)

you did hear about this before, it was mentioned ages ago, its how people roll from PCP to another. If your car is worth more than the GFV at the end of year 3 this is effectively residual deposit and used as a deposit to get you onto another PCP.

Yes i am into cars, i dont want to explain what the spec was as i dont think you would care or get it.

i would have paid 45k out of savings, i just dont see why i would bother at negligible interest rates.

 

[Firefly]

more of a rolex and iwc man myself but i had a dark side of the moon for a while and enjoyed it

Not mad on Rolex but I do like IWC a lot . The dark side of the moon is nice too. I tried one on though and it just didn't look as good.

so your car is worthless now

probably worth 1 or 2k but worth an awful lot more to me. Instead of paying 460 a month to a finance company I can instead lodge it to my savings account

you havent had free motoring, you had to pay for it in the first place and you are the only person i know who has run a BMW for 5 years at a cost of 1k on repairs and servicing, tyres alone should cost that (one replacement set)

I should have clarified that a bit better. The 1,000 doesn't cover servicing or tyres. I get the car serviced at 18 months usually and it usually costs me 200 - 300 or thereabouts. My tyres are changed every 2 years at a cost of about 450 euro (no runflats for me!). The 1,000 referred to expenses over and above normal servicing and tyres. For example last year my mechanic notified me of and oil leak and a coolant leak when servicing the car and I had both fixed. The heater had to be replaced also. Stuff like that. So taking that into consideration along with servicing and tyres it works out at about 670 euro per year. So when you are into the 3rd week in Feb with your repayments we're all square regarding costs.

 

[Blackrock1]

Odd statement. I go to a reputable dealer. For two decades now !

if you got brakes, tyres and a service for 600 quid they have skimped somewhere.

what brand are the tyres on your car

 

[Bronte]

INTEREST

37k at 2% is about €740 annually. Or 2K over 3 years. Not sure if it's on the decreasing amount or not.

 

[Blackrock1]

Not mad on Rolex but I do like IWC a lot . The dark side of the moon is nice too. I tried one on though and it just didn't look as good.



probably worth 1 or 2k but worth an awful lot more to me. Instead of paying 460 a month to a finance company I can instead lodge it to my savings account



I should have clarified that a bit better. The 1,000 doesn't cover servicing or tyres. I get the car serviced at 18 months usually and it usually costs me 200 - 300 or thereabouts. My tyres are changed every 2 years at a cost of about 450 euro (no runflats for me!). The 1,000 referred to expenses over and above normal servicing and tyres. For example last year my mechanic notified me of and oil leak and a coolant leak when servicing the car and I had both fixed. The heater had to be replaced also. Stuff like that. So taking that into consideration along with servicing and tyres it works out at about 670 euro per year. So when you are into the 3rd week in Feb with your repayments we're all square regarding costs.

again im struggling to see how you can put decent tyres on a bmw for 450 quid, unless they are very small diameter wheels? what model is it?

 

[Bronte]

if you got brakes, tyres and a service for 600 quid they have skimped somewhere.

what brand are the tyres on your car

No clue. It's 2 tyres for the front, cost 113 Euro. But remember things are cheaper than Ireland, and the cars are way cheaper. The break pads were around 60 Euro. Something about balancing the two tyres (I've to read the invoice in another language and cars wouldn't be my expertise) the check for the mot 12 Euro, service was 92, oil was very expensive, that cost 50 euro, pollen filter 23, air filter 17, some bulbs, 12 and 33, brake fluid 12 & 8, back brakes, clean and regulate 24.

 

[Blackrock1]

No clue. It's 2 tyres for the front, cost 113 Euro. But remember things are cheaper than Ireland, and the cars are way cheaper. The break pads were around 60 Euro. Something about balancing the two tyres (I've to read the invoice in another language and cars wouldn't be my expertise) the check for the mot 12 Euro, service was 92, oo was very expensive, that cost 50 euro, pollen filter 23, air filter 17, some bulbs, 12 and 33, brake fluid 12 & 8, back brakes, clean and regulate 24.

2 tyres for 113 euro are likely to be some chinese ditch finders what will be a danger to you and anyone else on the road

 

[Bronte]

2 tyres for 113 euro are likely to be some chinese ditch finders what will be a danger to you and anyone else on the road

How come I passed the MOT then, and I did with the old tyres last year etc. Anyway I think they look great, but they're showing up the thing that covers the screws, the hubcap thing, that's a bit cracked from my brilliant parking.

 

[Firefly]

again im struggling to see how you can put decent tyres on a bmw for 450 quid, unless they are very small diameter wheels? what model is it?

I'm not a car expert. The tyre company asked what I was interested in and I said "Something middle of the road" My tyres are Aeolus 225s. I've had them 14 months now and can't fault them. Not claiming them to be top of the range. On my previous car I once splashed out on a set of Conti's and they were really good. My car is a BMW 320i SE.

 

[Ceist Beag]

... and once again this thread goes way off topic and the facts I posted in the Pros/Cons post are lost in the midst of this nonsense...

 

[Firefly]

INTEREST
37k at 2% is about €740 annually.

That's what our ferry trip to France next summer came in at!

 

[Blackrock1]

How come I passed the MOT then, and I did with the old tyres last year etc. Anyway I think they look great, but they're showing up the thing that covers the screws, the hubcap thing, that's a bit cracked from my brilliant parking.

the MOT or NCT dont concern themselves with how good the tyres are just that they meet the min reqts re thread depth. As long as you are happy they look great, i hope you dont ever have to stop in the wet

 

[Blackrock1]

... and once again this thread goes way off topic and the facts I posted in the Pros/Cons post are lost in the midst of this nonsense...

sorry i have taken this off topic, poor tyres are a pet peeve of mine and i always get suspicious when people quote low running costs on their cars.

 

[Firefly]

Cons
3. If you cannot meet the repayments during the period you will still be liable for the loan but the car will be taken off you.

Good post (and sorry for on my behalf for taking it off topic). "you will still be liable for the loan but the car will be taken off you". I think it needs to be clarified that if, after taking the car off you the finance company are not able to get enough for it to cover the balance of the loan (for whatever reason - a glut of cars, less demand, damage to the car etc) then you are also liable for this shortfall.

 

[Leo]

How come I passed the MOT then, and I did with the old tyres last year etc. Anyway I think they look great, but they're showing up the thing that covers the screws, the hubcap thing, that's a bit cracked from my brilliant parking.

MOT tests to minimum standards. Better tyres will significantly reduce stopping distance, aquaplaning, and the chances of losing traction.

 

[Blackrock1]

Good post (and sorry for on my behalf for taking it off topic). "you will still be liable for the loan but the car will be taken off you". I think it needs to be clarified that if, after taking the car off you the finance company are not able to get enough for it to cover the balance of the loan (for whatever reason - a glut of cars, less demand, damage to the car etc) then you are also liable for this shortfall.

firefly, a good comparison might be what you paid upfront for your BMW, what its worth now, what the annual servicing and repairs costs are (excluding tyres) and the annual road tax to get a comparative monthly cost.