PCP?

[butcherster]

Hey guys,

Anyone on a PCP contract at the moment? I'd like to know some honest opinions. I've had a personal load for my Audi A1 for a while now, thinking of selling up, paying off my loan and going brand new on PCP for a nice A3, or S3.

 

[booyaka]

Horse for courses.

DO you want to own the car outright?
Do you want to have the option to buy the car at the end?
What's the deal, what's the APR, what's the car?

Loads of various options and idea. My car is pcp'd just now, but I've personal loaned the previous car.

 

[wyatt gates]

One key point are you staying with Audi for next car after you get a new one now.
Because when you change brands it can be costly if you want to finish it early

 

[Tute]

What Booyaka said.

PCP isn't "bad" per se, it's all about getting the right deal.

 

[iaind]

One key point are you staying with Audi for next car after you get a new one now.
Because when you change brands it can be costly if you want to finish it early

Where do you get that from? Early settlement/termination is the same regardless of if you change manufacturer or not.

You take it as a p/x, give them the settlement figure and if thats less than the p/x value they'll give you the difference as a deposit on your next agreement. The only forseeable difference is that an Audi dealer might give a greater p/x on an Audi than a BMW dealer - but in reality I dont think this would happen

 

[[TW]Fox]

As long as you understand how it works, it's not neccesarily a bad idea - just don't focus on monthly payment, thats how people end up spending tens of thousands of pounds without realising.

Realise it isn't a magic way into a brand new car for not much money. Brand new cars are expensive however you fund them.

 

[[TW]Fox]

Where do you get that from? Early settlement/termination is the same regardless of if you change manufacturer or not.

Except..

The only forseeable difference is that an Audi dealer might give a greater p/x on an Audi than a BMW dealer - but in reality I dont think this would happen

It does happen and it happens a lot - it's one of the main sources of approved used cars. A 2 year old A3 in great condition is very useful to an Audi dealer yet a BMW dealer would have to dispose of it through the trade, rather than as an approved used car with the margin that would allow.

 

[Malt_Vinegar]

However, you can buy another brand through a dealer. I gave back my 330i, and got into a jaguar XF, all through a BMW dealer. I used Sytner, as they have mutliple brands, and actually pulled in the Jag from another Sytner dealer to stick on PCP for me through BMWFS.

 

[butcherster]

I would probably stay with Audi and would like the option to buy I think. Although would probably have to finance the final payment.

Not seen any offers as such but have enquired about a few 'Approved' used cars with 4-6k miles where they still offer the Audi 'Solutions' finance. Which I think is just PCP style finance. This may save a bit off the rapid depreciation on new cars...

 

[kevpuk]

I would probably stay with Audi and would like the option to buy I think. Although would probably have to finance the final payment.

Not seen any offers as such but have enquired about a few 'Approved' used cars with 4-6k miles where they still offer the Audi 'Solutions' finance. Which I think is just PCP style finance. This may save a bit off the rapid depreciation on new cars...

Be aware that the interest rates on used car PCPs are often not as attractive as on new......all very well 'saving some depreciation', but could end up paying a chunk of it back in higher APR.
Consider DriveTheDeal/Car Wow or similar to 'save' on list price, whilst still getting headline PCP rates from dealer?

 

[Jono8]

Hey guys,

Anyone on a PCP contract at the moment? I'd like to know some honest opinions. I've had a personal load for my Audi A1 for a while now, thinking of selling up, paying off my loan and going brand new on PCP for a nice A3, or S3.

I am on a pcp deal with my Fiesta ST but you basically have to ignore the monthly cost and just focus on the overall amount you will be paying.

PCP for me worked out the cheapest and most convenient even though I do intend to pay the balloon payment and keep the car after 2 years.

 

[DazQ87]

Like wise my focus ST is on PCP, with the intention of not paying the balloon payment at the end and swapping to a focus RS or mustang.

 

[almoststew1990]

I was going to start a new thread but I might as well join in this one...

Can someone link a guide to all the different ways of 'paying for a car' like PCP, finance with dealer as well as more obvious ones like bank loan, buy outright... I've generally only considered buying outright but now I'm more open to other methods.

 

[xs2man]

Credit cards are pretty much the cheapest way to finance a car just now. But you'll be doing well to get the limit to cover a new car, or even many decent second hand motors.

However, if you can get the limit on a card, assuming the dealer is happy to take payment via a card (they may ask you to pay the 3% fee for credit cards), it will likely work out the cheapest, other than saving up your money and buying outright.

You buy it on a 0% purchases card, and make monthly payments to the amount you would with a loan or whatever, then when the 0% runs out, transfer to a 0% balance transfer card (typically a 2.5-3% charge here). Then arrange the same payment schedule.

So say you want to buy a £20k car, paid up over 5 years. This would cost you £364.21 per month according to compare the market, with an interest rate of 3.6%, and you would pay £1,852.60 in interest over the period.

Again according to compare the market, the best purchases credit card is from the Post Office at 25 months interest free. So buy it on that, and pay £364.21 per month for the 25 months. After 25 months you are down to £11,258.96. Transfer that to the best balance transfer card, which is currently the 36 month Barclaycard with a 2.39% fee, and your new balance is £11,528.05, so a £269.09 charge.

Then continue making payments as before, and the final payment will be made on month 32 having only paid £269.09 in "interest" rather than £1,852.60, a saving of £1,583.51 over what is likely to be the next best way to finance the car. Of course, if the dealer asks you to pay the fee for the £20k car, that comes in at £600, which reduces the savings, but you'd still be almost a grand better off.

 

[[TW]Fox]

Not very many people are going to get a £20,000 credit limit on a newly opened 0% credit card!

Even fewer are going to get a second card 2 years later with a £12k limit on it when they already have £12k of oustanding debt on another credit card.

Basically a complete non-starter really.

And not worth the effort when personal loans are so cheap.

 

[daz]

Credit cards are pretty much the cheapest way to finance a car just now. But you'll be doing well to get the limit to cover a new car, or even many decent second hand motors.

However, if you can get the limit on a card, assuming the dealer is happy to take payment via a card (they may ask you to pay the 3% fee for credit cards), it will likely work out the cheapest, other than saving up your money and buying outright.

You buy it on a 0% purchases card, and make monthly payments to the amount you would with a loan or whatever, then when the 0% runs out, transfer to a 0% balance transfer card (typically a 2.5-3% charge here). Then arrange the same payment schedule.

So say you want to buy a £20k car, paid up over 5 years. This would cost you £364.21 per month according to compare the market, with an interest rate of 3.6%, and you would pay £1,852.60 in interest over the period.

Again according to compare the market, the best purchases credit card is from the Post Office at 25 months interest free. So buy it on that, and pay £364.21 per month for the 25 months. After 25 months you are down to £11,258.96. Transfer that to the best balance transfer card, which is currently the 36 month Barclaycard with a 2.39% fee, and your new balance is £11,528.05, so a £269.09 charge.

Then continue making payments as before, and the final payment will be made on month 32 having only paid £269.09 in "interest" rather than £1,852.60, a saving of £1,583.51 over what is likely to be the next best way to finance the car. Of course, if the dealer asks you to pay the fee for the £20k car, that comes in at £600, which reduces the savings, but you'd still be almost a grand better off.

This is stupid. You're missing out on £xk dealer deposit contribution given on most promotional PCP deals which is going to be significant.

E.g. Jeep Grand Cherokee - 0% over 3 years, £5k dealer deposit contribution

But you'd rather mess around with credit cards?

 

[xs2man]

Not very many people are going to get a £20,000 credit limit on a newly opened 0% credit card!

Even fewer are going to get a second card 2 years later with a £12k limit on it when they already have £12k of oustanding debt on another credit card.

Basically a complete non-starter really.

And not worth the effort when personal loans are so cheap.

I did state at the start IF you could get the limit. I know not everyone can get a £20k limit, but it was just an example. Works equally well on £10k or £5k cars too though. Although obviously with lesser savings to be had. But even then, I'd still be happy to save £500 or so doing it that way.

But getting a £12k limit on a balance transfer card is easy if you already have £12k of credit on another card. Done it before a few times. Afterall, you are simply switching where that limit is held.

But maybe I'm different in that I'm perfectly willing to take 30 minutes out of my time to switch credit cards and save a grand? Maybe a non starter for you because you can't get the limit (I don't know your circumstances, maybe you can, maybe you can't), but for someone who can, and wants to save some cash, it's an option. Which is what was asked for.

This is stupid. You're missing out on £xk dealer deposit contribution given on most promotional PCP deals which is going to be significant.

E.g. Jeep Grand Cherokee - 0% over 3 years, £5k dealer deposit contribution

But you'd rather mess around with credit cards?

Yeah, but who is gonna be eligible to get a £40k (The cost of a poverty spec Jeep Grand Cherokee) credit limit then buy on HP at £835 per month + £4k down? (Or £6k down and £1,161 per month for the Summit).

You can order the car through the likes of Broadspeed where you will get more off than that dealer deposit anyway (£6,760 for that poverty spec Grand Cherokee, £7,835 for the Summit) and can pay however you wish. You would be mad to just walk into a dealer and pay whatever price they tell you to pay without exploring all your options first. Another example might be a BMW 520d Touring M-Sport where the dealer will give you £5,200 off yet Broadspeed will give you £6780 off and still use dealer finance.

Also, you have clearly picked one of the few cars out there with a 0% finance rate. The majority of new cars do not come with such a rate. Obviously if you can afford the £4k down and £835 per month, you can buy that poverty spec Jeep, or you could probably afford something actually nice. But if that Jeep is what you are after, and you can and want to pay for it over 3 years, then dealer finance is easily the way to go, in this rare case.

 

[[TW]Fox]

I did state at the start IF you could get the limit.

Which 99% of people cannot, and frankly those that can will have significant salaries and stunning credit ratings and probably don't need to **** around balance transferring a car anyway.

But getting a £12k limit on a balance transfer card is easy if you already have £12k of credit on another card. Done it before a few times. Afterall, you are simply switching where that limit is held.

No, you are not 'simply switching' at all. You are applying for a new line of credit whilst you already have £12,000 of outstanding debt on an existing card. Sure, your intention is to transfer it but you could easily just max the new one as well for all the bank knows (The balance transfer request is handled in a different process to the initial approval and allocation of credit limit).

So not only do you need to be able to get a £20k limit in the first place but you also then need to be able to get another card with a huge limit whilst still maintaining the first *with* a sizeable amount of credit card debt in the process.

Getting £20k in the first place is unlikely but possible but when you say 'Hi, yea, I've got £12k of credit card debt which I am servicing by making only small fixed payments per month, can I have a new credit card with a massive limit please' most card issuers will say 'LOLOLOLOLOL'.

Your suggestion is spot on for a 5 grand car but hilariously amusing for a 20 grand one.

 

[xs2man]

Which 99% of people cannot, and frankly those that can will have significant salaries and stunning credit ratings and probably don't need to **** around balance transferring a car anyway.

Probably don't NEED to, no. But I am still of the opinion that if I can save a grand, I will try.

No, you are not 'simply switching' at all. You are applying for a new line of credit whilst you already have £12,000 of outstanding debt on an existing card. Sure, your intention is to transfer it but you could easily just max the new one as well for all the bank knows (The balance transfer request is handled in a different process to the initial approval and allocation of credit limit).

The last few balance transfer cards I have applied for I have put in for the transfer at the same time as the application for the card. Perhaps the credit card company does use a different process for this shift, but I have generally applied for it at the time of application.

So not only do you need to be able to get a £20k limit in the first place but you also then need to be able to get another card with a huge limit whilst still maintaining the first *with* a sizeable amount of credit card debt in the process.

I haven't found it so difficult I couldn't do it. Sure, the RBS said no, but every other card I have applied for has been accepted.

Getting £20k in the first place is unlikely but possible but when you say 'Hi, yea, I've got £12k of credit card debt which I am servicing by making only small fixed payments per month, can I have a new credit card with a massive limit please' most card issuers will say 'LOLOLOLOLOL'.

Your suggestion is spot on for a 5 grand car but hilariously amusing for a 20 grand one.

In your opinion. But yes, it works well for a £5k car, and is an option open to more people at this stage. But the fact remains that it also works all the way up the scale. I was going to initially work it out on a £10k car, but when I opened up CTM it already had £20k in there...

 

[Vegeta]

How easy is it to get out of a PCP? I know I can return/trade in my car after 2 years of my 4 year PCP deal but is it possible to do it sooner? Although I chose the right car for my financial situation at the time i'm self employed and things are only looking up + I regret not getting something a bit more powerful although the car itself is very nice.