Downfalls of PCP

That interest rate is redicolous mate!

If the car is £11,000 and you pay £300 deposit leaves a Balance of £10,700 even at Bank of england base rate (5.75 flat) You'd be looking at payments of around £229 a month.

Do you have a part exchange in which you have negative equity?

Or are you taking payment protection insurance?

Or is the amount you financing much greater than £10,700?
 
I've had cars on pcp before, (renaults first a clio then a scenic....)

The way to look at them is....

All your paying is the depresiation...

that supposed trade in at then end is just a hook ,, no garentees, I was given 400 quid trade in(, at first I was offered nothing), but that was only because I'm a fairly good negotiator....



edit the reason(maybe) his payments are higher than your quooted ones are the insurance cocer, ushually about £40 a month extra
bullit
 
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bullit in head said:
I've had cars on pcp before, (renaults first a clio then a scenic....)

The way to look at them is....

All your paying is the depresiation...

that supposed trade in at then end is just a hook ,, no garentees, I was given 400 quid trade in(, at first I was offered nothing), but that was only because I'm a fairly good negotiator....



edit the reason(maybe) his payments are higher than your quooted ones are the insurance cocer, ushually about £40 a month extra
bullit
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It's not usually £40 extra, there are 3-4 different levels of cover and each different level costs a certain % of the monthly payment.

Trust me I sell the stuff.
 
Maz said:
Or is the amount you financing much greater than £10,700?
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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.
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Right read your post below so what better options are there for someone with long term ownership?
 
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ste_bla said:
Little credit history (good or bad) so cant get much lower



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



Right read your post below so what better options are there for someone with long term ownership?
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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.
 
So I take it they've done a credit check then?

Because credit is spilt into 2 types,.

You have your prime and your subprime customers.

Car finance is pretty good because it's secured on an asset which means it's easier to get and you can borrow more money than you would be able to with an unsecured loan.

For example I can't borrow £40,000 from the Bank unless I secure on my home (BAD IDEA)

I can however borrow £40,000 to pay for a new BMW.

You Prime customer will be offered REAL rates from 2.50% - 8%

Anything over that are generally speaking they are often reserved for Sub Prime customers (People who have difficulty getting finance)

What I'm trying to say is, if the dealer can offer you finance at 7% there is no reason they can't offer it to you at 6%.

It would be a different matter however if they offered it to you at 15% because there is a reason it would be so high!
 
Paying back for something that is going to drop like a stone in value seems crazy to me (unless done via a business lease etc).

Do you need a 'new' one?
 
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