Downfalls of PCP

ste_bla · 27 Sep 2007 at 15:47

Been lookig at dealers etc at cars and been offered a nearly new car at what i think is a reasonable price.

Its a 2007 56' plate (Feb 07) its got 6k miles and looks new. It is a Renault Grand Scenic 2litre 6sp petrol @ 11k

Now finance wise they've given me these figures (inc some care packages which will be taken off but anyway..) ;

Buying 7.5%

300 Deposit
264 monthly over 5 years

Total cost including credit £16140

PCP @ 12k miles (what?)
300 Deposit
232 monthly over 4 years
Final optional Payment 3612

Total cost including credit £15048

So if i went the PCP route I would save over a grand, great!
So what are the downfalls of it?

ste_bla · 27 Sep 2007 at 15:56

Spunkey said:
the downfall being when your 4 years of £232 a month are over you've either got to stump up £3612 to pay off the finance and keep the car or hand it back to the dealership and have nothing to part-ex for a new car.

Personally I avoid PCPs

Fair enough, however Im after this car long term as in 8 years hopefully so i would stump up the 3k (even if it meant a 6 month loan) as i would save 1k and would still finish early or the same time as the other sort.

So would it be bad for me knowing what i just said?

ste_bla · 27 Sep 2007 at 16:17

roboffer said:
..and you run the risk of additional payments if you go over the allowed annual mileage (Assuming thats what the 12k is)...

Have you tried getting a lower rate through a bank?

YEah they said 12k (miles) but we do 10k tops so theres room if needbe and they said also its only a avg so one year if we did go over..

Err yes but dont have a lot of credit so i got offered 8.9 and 10.2 rates

I didn't think of the interest on the final payment although at a rough look it seems about £150 so would still save best part of a grand

Also do they normally offer a guaranteed value? As the guy said i could either give the car back, pay the ballon payment or trade it in as i wouldnt be in neg equitity, i did ask and he said no to guarantee trade and said this was the norm, but he would say that wouldn't he..

ste_bla · 27 Sep 2007 at 18:55

Maz said:
Or is the amount you financing much greater than £10,700?

Theres about £1k of customer care packs (extra warranty etc) which will be removed however for the comparison i thought it didnt matter too much

housemaster said:
I have said it before, PCP is an expensive way to buy a car, there are much better finance options.

Right read your post below so what better options are there for someone with long term ownership?

ste_bla · 27 Sep 2007 at 18:59

Maz said:
That interest rate is still VERY high, on a used car of that age with current rates I think 6% would be reasonable.

Borrowing £10,700 at 6% would cost you £231 a month.

ste_bla said:
Little credit history (good or bad) so cant get much lower they did offer me 7% now with a 2 month defered payment which is a bit better

ste_bla · 27 Sep 2007 at 19:17

Maz said:
So I take it they've done a credit check then?

Yeah they did they said I was a "santander grade customer rather than ablack horse or other.." good or bad?

ste_bla · 27 Sep 2007 at 19:44

Maz said:
Santander is a prime finance company.

Part of the Abbey group.

I'd ask him to get it to 6% for you to do a deal.

I'll give them a go tomorrow although im not sure if they will as i have so far got a fair bit out of them but worth a tug

ste_bla · 27 Sep 2007 at 20:50

BIGWEB said:
are you quoting flat rate? as in 6% flat? as oppose to APR?

No they just said 6%

ste_bla · 27 Sep 2007 at 21:00

[TW]Fox;10170170 said:
will have paid £15,000 for a diesel Renault Scenic.

1.6 petrol

but then if it last 8 years only £1800 a year

ste_bla · 27 Sep 2007 at 21:05

[TW]Fox;10170190 said:
Even worse. At least the diesel is capable of moving.

Its not that bad to be fair, its not like im going to go racing with the kids etc