New Car ? Personal Contract Plans - Advice sought.

[Crawfy]

Any of you guys running a car via a PCP agreement ?

I'll be looking at a new car next year and quite like the idea of then replacing every 2/3 years with a new model.

Looking for feedback on the process - good & bad ?

Main questions

- Once you pay the deposit, can this then transferred onto your next vehicle if you continue on a PCP or is a new deposit required ?
- Does anyone have a high mileage deal ? I see most as 5k and 10k p/a but I would be looking for 15k p/a
- Weighing up pros and cons of going with a lease company or direct with a manufacturer who's models I like.

All feedback and experiences welcome

Cheers

 

[Rooter]

mine is on PCP. Works for me. I believe a new deposit is required, cant even remember what mileage deal mine is on. I was always going to pay the monthlies, then pay off the balloon at the end and either sell the car privately or keep (am going to keep it now)

I bought mine from a private trader ex demo, so went through black horse finance who were there company.

To be fair its been a doddle, Think i chucked 3k down, 260 a month and a 6k balloon on a 4 year deal. That was an XC90 up for 20k. Today its worth about 13k and i have just over a year left, so i could sell it for "profit"

 

[Val]

PCP is a finance to purchase so you do own the car with the option not to pay the final payment, therefore the deposit is part of your payment and a new deal will mean a new deposit.

My mrs has a PCP deal and im not convinced it was the right decision for us now given her annual mileage and the fact she will now hand back where at the time she was convinced she'd keep it. At the time it seemed spot on though.

Do your homework and numbers, leasing may be a better option.

 

[MarkA]

You won't know till you get some figures as there'll be a marked difference on the balloon /FV between a car doing 5 -10k p.a and one doing 15k p.a

 

[Smiffy]

If you want to change the car regularly (say every 3 years) and don't want too high a monthly payment, then a PCP is what you should look at.
If you plan on keeping the car longer than 3 years and don't mind a bigger payment, look at standard hire purchase.
The main benefit of a PCP is that it gives you a lower monthly payment, enabling you to buy a newer, or higher specced car than you thought you could afford.
You choose your model, agree a mileage per annum, pay your deposit and then you are away. Based on your mileage and length of agreement, the manufacturer will set a guaranteed future value for the car.
At the end of the agreement you have three choices....
1) Pay the end figure and keep the car.
2) Trade the car in, and anything over and above the guaranteed future value will go as deposit on your next car.
3) Hand over the keys and walk away, owing nothing more (as long as your car is in reasonable condition for the age and mileage, and you haven't exceeded your agreed mileage limit.)
There is always an excess mileage charge built in to these agreements, (Nissans is 8p per mile), but the only time you would be liable to pay this is if you took up option 3 at the end and walked away.

Manufacturers are very keen to get you onto a PCP deal, as it tends to keep you loyal to the marque. Finance rates and deposit allowances (if offered) tend to be better if you go down this route.
But only look at a PCP if you intend to change the car regularly. If you want to keep the car for longer, it may not (may not) be the deal for you. Unless the deposit allowance makes it worthwhile ( for instance, we are offering £2,500.00 deposit allowance on a new Nissan Note at the moment if taken out on PCP. Even a cash buyer is better off to take out this deal and settle after a month or two. The saving they have made far outweighs the tiny bit of interest they would have paid. You just have to explain it properly!).
If you have any other questions, please ask.
Rob

 

[Crawfy]

If you want to change the car regularly (say every 3 years) and don't want too high a monthly payment, then a PCP is what you should look at.
If you plan on keeping the car longer than 3 years and don't mind a bigger payment, look at standard hire purchase.
The main benefit of a PCP is that it gives you a lower monthly payment, enabling you to buy a newer, or higher specced car than you thought you could afford.
You choose your model, agree a mileage per annum, pay your deposit and then you are away. Based on your mileage and length of agreement, the manufacturer will set a guaranteed future value for the car.
At the end of the agreement you have three choices....
1) Pay the end figure and keep the car.
2) Trade the car in, and anything over and above the guaranteed future value will go as deposit on your next car.
3) Hand over the keys and walk away, owing nothing more (as long as your car is in reasonable condition for the age and mileage, and you haven't exceeded your agreed mileage limit.)
There is always an excess mileage charge built in to these agreements, (Nissans is 8p per mile), but the only time you would be liable to pay this is if you took up option 3 at the end and walked away.

Manufacturers are very keen to get you onto a PCP deal, as it tends to keep you loyal to the marque. Finance rates and deposit allowances (if offered) tend to be better if you go down this route.
But only look at a PCP if you intend to change the car regularly. If you want to keep the car for longer, it may not (may not) be the deal for you. Unless the deposit allowance makes it worthwhile ( for instance, we are offering £2,500.00 deposit allowance on a new Nissan Note at the moment if taken out on PCP. Even a cash buyer is better off to take out this deal and settle after a month or two. The saving they have made far outweighs the tiny bit of interest they would have paid. You just have to explain it properly!).
If you have any other questions, please ask.
Rob

Thanks v.much Rob, plenty of details there to get my wee brain around. All in all, looking to reduce monthly payments as HID has her eye on a bigger house (bigger mortgage)
I'll PM you for more insight if required
Much appreciated in the meantime squire

 

[Val]

Smiffy, whats the deal on early settlement of a PCP if you are half way through, can you hand back and walk away in a similar mould to a standard finance deal?

 

[Rooter]

Smiffy, whats the deal on early settlement of a PCP if you are half way through, can you hand back and walk away in a similar mould to a standard finance deal?

I can answer as i considered it last year. Only way is to pay off the finance in full. So Sell the car and hope its not dropped below the market price, otherwise you will need more cash to take up the shortfall.

 

[lex!]

I bought my last and my current vehicle on a PCP.
The last one I put my old car in as a deposit, and then I paid the balloon at the end. I got it for a superb price, it was the old model Ford Focus and they were offloading them, but only if you took out a PCP. So the mileage and all the terms were of no importance as it was always my intention to buy it outright at the end of the finance term.

My current vehicle is the new Ford Focus and the dealer was brilliant as he was able to offer great flexibility on the terms of the PCP so long as the basic rules about the amount of deposit and the amount of finance were followed. He left it up to me to suggest the annual mileage I would put in the deal so that this should not be excluded if I returned the car at the and of the term.

wrt:

- Once you pay the deposit, can this then transferred onto your next vehicle if you continue on a PCP or is a new deposit required ?
a new deposit is required, but if your car is valued at more than the balloon then this can be used as a deposit, this might not be likely, but is a common sales pitch
- Does anyone have a high mileage deal ? I see most as 5k and 10k p/a but I would be looking for 15k p/a,
mine is 12k, and as I said before a good dealer will try and negotiate this
- Weighing up pros and cons of going with a lease company or direct with a manufacturer who's models I like.

Ford were good for me.

I should mention that you can also get finance to settle the balloon if you want to do this, at the end of the term

 

[Lanark_Golfer]

Smiffy, whats the deal on early settlement of a PCP if you are half way through, can you hand back and walk away in a similar mould to a standard finance deal?

In Scotland, as long as the PCP has been set up properly, you can hand the car back to the finance company as soon as you have paid 1/2 the total amount payable. This includes both your deposit and balloon payment parts.

Example below:

£11k car

£1k deposit then £150 a month for 48months then a balloon payt of £3800, total payable is £12k

Once you have paid £6k you can hand car back and owe nothing, this would be just after 33 months in this example (£1K deposit and 33.33 X £150)

I have done this several times, particularly handy when you owe £8.5K and get offered £4K trade in, the finance company get the £4.5 hit and you start from scratch

 

[Val]

In Scotland, as long as the PCP has been set up properly, you can hand the car back to the finance company as soon as you have paid 1/2 the total amount payable. This includes both your deposit and balloon payment parts.

Example below:

£11k car

£1k deposit then £150 a month for 48months then a balloon payt of £3800, total payable is £12k

Once you have paid £6k you can hand car back and owe nothing, this would be just after 33 months in this example (£1K deposit and 33.33 X £150)

I have done this several times, particularly handy when you owe £8.5K and get offered £4K trade in, the finance company get the £4.5 hit and you start from scratch

That makes sense actually so paying half the overall value as opposed to paying half the term on the old style finance deal and then handing back.

 

[Val]

I can answer as i considered it last year. Only way is to pay off the finance in full. So Sell the car and hope its not dropped below the market price, otherwise you will need more cash to take up the shortfall.

Scott this can't be true because you can hand the car back before paying the final balance so you never have to pay the finance off even if the car drops below market value.

 

[Rooter]

Scott this can't be true because you can hand the car back before paying the final balance so you never have to pay the finance off even if the car drops below market value.

I should have said, my financing is done via a third party and not direct with the dealership. May be the case as above if you take a ford for example plan, My finance is via black horse and is basically a loan with a large final payment. I have no option other than paying the final payment. how i do that is up to me.

Is my deal not a true PCP? Maybe i have confused things! Sorry!

 

[Val]

I should have said, my financing is done via a third party and not direct with the dealership. May be the case as above if you take a ford for example plan, My finance is via black horse and is basically a loan with a large final payment. I have no option other than paying the final payment. how i do that is up to me.

Is my deal not a true PCP? Maybe i have confused things! Sorry!

No probs.

 

[Smiffy]

I should have said, my financing is done via a third party and not direct with the dealership. May be the case as above if you take a ford for example plan, My finance is via black horse and is basically a loan with a large final payment. I have no option other than paying the final payment. how i do that is up to me.

Is my deal not a true PCP? Maybe i have confused things! Sorry!

Your deal is not a PCP.
It's a personal loan

 

[Rooter]

Your deal is not a PCP.
It's a personal loan

even with the balloon? well whatever it is, it works for me! LOL

 

[Smiffy]

even with the balloon? well whatever it is, it works for me! LOL

Even with the balloon.
When you are on PCP the balloon payment is a "guaranteed" figure for your car, irrespective of what happens out in the market.
On your personal loan, you have no guarantees...

 

[Rooter]

Even with the balloon.
When you are on PCP the balloon payment is a "guaranteed" figure for your car, irrespective of what happens out in the market.
On your personal loan, you have no guarantees...

Cool thanks! Well my final payment next year is 6k and today the car is worth 12. so happy days. (Actually maybe 11.5 due to last nights incident)

 

[GreiginFife]

The wife has hers on a Peugeot PCP, currently has a 208, 1.2 Allure model with a stonking 80BHP 3 cylinder engine. She's had it 3 years next April.
However, in June she said she wanted to go see them about what to do next year, as in when would she need to start the process of renewal considering there are 3 month lead times...

Sooo, one convo later she is told she can actually proceed and upgrade now. And decides that what she really needs is the new 208 GTi Prestige (208BHP 1.6 THP engine). All she had to pay was a £100 deposit and the GFV on her car was locked in by the dealer. Albeit she is only 19k of a 30k contract so is handing it back with low mileage.

Needless to say she is a bit excited as she takes delivery of, what can only be described as a mini beast, next Saturday.

So you can change your car on a PCP with no further deposits being paid (ok she had to pay that minimal amount due to the difference in spec) and you don't even need to see out the full 3 years.