Do any banks do PCP type loans?

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Hi

One of the cars i bought about 8yrs ago, I purchased with a loan that allowed me to have a lump sum payable at the end of the term to a % of the purchase price.

Does anyone know if these types of loans are still available through any banks or is it purely when purchasing via dealerships?

Thanks
 
MatthewNCB said:
Hi

One of the cars i bought about 8yrs ago, I purchased with a loan that allowed me to have a lump sum payable at the end of the term to a % of the purchase price.

Does anyone know if these types of loans are still available through any banks or is it purely when purchasing via dealerships?

Thanks
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There are dedicated car finance companies around that allow you to do this kind of thing, this is one that a family member is the manager of and a few members here have used, but they only really cater for 20-25k+

http://www.performancecarfinance.co.uk/
 
Bit risky this sort of thing. It seems to offer the ability to stretch yourself into a car you couldnt otherwise afford, but as its unsecured borrowing unrelated to the car you have the potential to get into quite serious negative equity.

What happens if you take out one with a £10k balloon, you get to the end of your term but the car is worth ony £5k? You need to sell the car and find an extra £5k from somewhere to pay it off..

Surely its better to stick with a conventional loan. Perhaps increase the term if you want lower monthly payments, remembering that you can now overpay any amount you want at any point - so you could in effect take a 5 year loan with the inteion of paying the balance off after 3 years, but with the safety net of not being required to pay a lump sum if, in 3 years time, you are skint or something.
 
I'll explain my reasoning and you can tell me if you think in my case it makes sense. This isnt to buy the z4 i was talking to you recently. That will now come when she goes back to work.

I am about to buy my other half a new car, she has just started maternity leave and so has 12 months of ever decreasing pay, because of this we want to reduce our monthly outgoings for the next 12 months as much as possible.

When she returns to work, they then give her a decent lump payment, at the same time as i have a load of shares clear. the 2 combined mean we can they pay a good lump sum off.

The sort of numbers we are talking are 17k car. 7k down inc 4k px, 5k loan and 5k balloon, so we should be ok from a negative equity point hopefully.
 
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ashrobbo said:
just buy a car for what u have now and decrease your monthly's even more?

If everything pans out great.. then spend on a car.
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Probably the most sensible suggestion really.

Drop 7k on a car that has taken the depreciation hit already, run it for a year and sell for not much less than you bought the car for.

Once maternity leave is over, sell the 7k car and add extra cash to buy something decent.
 
[TW]Fox;19315732 said:
Bit risky this sort of thing. It seems to offer the ability to stretch yourself into a car you couldnt otherwise afford, but as its unsecured borrowing unrelated to the car you have the potential to get into quite serious negative equity.

What happens if you take out one with a £10k balloon, you get to the end of your term but the car is worth ony £5k? You need to sell the car and find an extra £5k from somewhere to pay it off..
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Surely this is where guaranteed future value applies

Very few loans let you overpay, it's the remainder balance, or nothing.
 
Lucero said:
Surely this is where guaranteed future value applies
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He's not talking about a PCP - he's talking about unsecured loans with a balloon payment. Ie, like a PCP. Therefore there is no GFV because the loan can be used for any purpose - a 6 month round the world trip perhaps - not neccesarily a car. They are extremely rare.

Very few loans let you overpay, it's the remainder balance, or nothing.
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Completely changed as of February 1st. They must now allow partial or full repayment at any time. It's law.
 
[TW]Fox;19319415 said:
Completely changed as of February 1st. They must now allow partial or full repayment at any time. It's law.
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This is good news. I guess lenders can still stipulate how much is allowed to be overpaid in a given period?
 
Bunka said:
Probably the most sensible suggestion really.

Drop 7k on a car that has taken the depreciation hit already, run it for a year and sell for not much less than you bought the car for.

Once maternity leave is over, sell the 7k car and add extra cash to buy something decent.
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The most (financially) sensible option would more likely be to keep her car, there seems little point in trading up from a 4k car to a 7k car for 12 months.
I agree the sensible option is to save up, that can said about any loan, but my other half will be doing quite a few of 400mile round trips over the summer with my then 4 month old baby and id like her to be in a good car.

I could afford the larger repayments of a straight loan if i had too, but would rather make life easier over the year and this seems like a good way of going about it.

I understand the risk, but i did this before and kept to the timings, earning much less than now, so I am sure i can do it again.
 
[TW]Fox;19319556 said:
Not IIRC, no. It's hugely consumer biased. The consumer can even decide if it reduces monthly payments or reduces the term.
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I didnt know that, that is great news for people taking out loans.

Must be a nightmare for them to manage it, if everyone started overpaying and remixing the terms of their loans
 
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