Poss PCP newbie..

[esox]

Hi, currently going mad doing the merry-go-round that is finding out about all the car buying options for daughter No1s new car.
As if choosing the actual car isnt complicated enough.....

I`m a PCP newbie and here`s the question:

When the PCP period ends and you decide to chop the car in for another one on another PCP deal do you have to pay another deposit towards this new car or do you simply keep paying new monthly repayments for that new car?
When dealers talk of `equity` on your old car (the one that`s just ended on the PCP) i assume they mean that the cars value is slightly more than the projected value calculated at the start of the PCP therefore this difference is available to you to put towards your new deposit (see above)?
I can see that ordinarily this equity probably wouldn`t amount to much but the madness in the used car market of the last couple of years could make a useful difference..

Cheers.

 

[grober]

What is PCP car finance? Personal contract purchase explained | Carbuyer

PCP car finance can make buying a new or used car more affordable – here’s how it works

www.carbuyer.co.uk

SHOP AROUND DEALERSHIPS ALSO-INTEREST RATES ARE PRETTY VARIABLE NOW ALONG WITH NEW CAR DELIVERY DATES

 

[Benz17]

Always bought outright, but the above pcp explanation is very enlightening and easy to understand. For some it can be the way to go, and for others not so.

 

[LTD]

Just remember with PCP that you can always trade a car into any dealer and pay off the remainder of the TOTAL sum remaining. You may end up with some cash equity

My last car was on PCP and sold it back to the dealer that supplied it.

Ended up a few thousand pounds to the good as the value of the vehicle was more than the overall due

 

[BigJase88]

I just read that article. Very informative. All the info one would require

 

[Darrell]

Hi, currently going mad doing the merry-go-round that is finding out about all the car buying options for daughter No1s new car.
As if choosing the actual car isnt complicated enough.....

I`m a PCP newbie and here`s the question:

When the PCP period ends and you decide to chop the car in for another one on another PCP deal do you have to pay another deposit towards this new car or do you simply keep paying new monthly repayments for that new car?
When dealers talk of `equity` on your old car (the one that`s just ended on the PCP) i assume they mean that the cars value is slightly more than the projected value calculated at the start of the PCP therefore this difference is available to you to put towards your new deposit (see above)?
I can see that ordinarily this equity probably wouldn`t amount to much but the madness in the used car market of the last couple of years could make a useful difference..

Cheers.

Same here. My daughter is having lessons at the moment.

 

[Doodle]

When the PCP period ends and you decide to chop the car in for another one on another PCP deal do you have to pay another deposit towards this new car or do you simply keep paying new monthly repayments for that new car?

It's an entirely new arrangement, so new deposit, interest rate, financial checks etc

When dealers talk of `equity` on your old car (the one that`s just ended on the PCP) i assume they mean that the cars value is slightly more than the projected value calculated at the start of the PCP therefore this difference is available to you to put towards your new deposit (see above)?
I can see that ordinarily this equity probably wouldn`t amount to much but the madness in the used car market of the last couple of years could make a useful difference..

Yes, that's correct. At the moment anyone coming out of a PCP is likely to be in a pretty good position relative to their GMFV. The only way that benefit is realised currently is if you buy the existing car though - new cars have also shot up considerably, probably far more than any equity figures.

 

[Petrol Pete]

It might depend on how long the PCP is taken out for . Who knew when they signed their 3 year PCP ..err...three years ago how mad the used car market went (up) during covid/chip shortage.

I can guarantee one thing , none of us have a clue what the value of a regular used car will be in 3 years time .

 

[MikeInWimbledon]

It might depend on how long the PCP is taken out for . Who knew when they signed their 3 year PCP ..err...three years ago how mad the used car market went (up) during covid/chip shortage. I can guarantee one thing , none of us have a clue what the value of a regular used car will be in 3 years time .

It's usually, broadly, half of the headline "new" price.

The one thing you can guarantee is that a new - female - driver will have pranged it at least once during that time. (At least twice if it's a bloke). Not usually a write off, more typically a bodyshop job.

.

 

[MikeInWimbledon]

Can't begin to imagine why you'd give a new driver a new car,

rather than a four year old 1.0 litre Polo / Golf / Fiesta / Focus on 20k miles for half the price.

Or an eight year old ... on 40k for a quarter of the price....

 

[sgregory124]

One important point to note about PCP, is that you can also voluntarily terminate the agreement and walk away (after you've paid 50% of the total agreement value including interest). Gives you as the consumer some additional flexibility.

 

[BigJase88]

One important point to note about PCP, is that you can also voluntarily terminate the agreement and walk away (after you've paid 50% of the total agreement value including interest). Gives you as the consumer some additional flexibility.

However i believe that can affect getting a new PCP deal / credit rating

 

[sgregory124]

However i believe that can affect getting a new PCP deal / credit rating

Nope - whoever told you that was being dishonest. It's enshrined in consumer credit law, it does not (and cannot) affect your credit rating in any way as it is your legal right to cancel in that way. It may affect your ability to get a new PCP agreement if you're trying to get another with the same company, but that is at the discretion of the company you're dealing with (the clowns doing the selling might well try and put the frighteners on, but then they are making money from selling finance and not the car).

I can say from personal experience that Audi Financial Services didn't bat an eyelid when I VT'd two agreements with them (after the first, I immediately took out another PCP on another Audi).

It's a great way of extracting yourself if needed and was originally recommended to me by an Audi salesperson

 

[Eddy77]

All the above is sound advice. If you want to discuss offline send me a message as I’ve worked in vehicle leasing and car finance for 22 years! I should be able to answer any question you have, although can’t offer any advice as such.

 

[ALFAitalia]

However i believe that can affect getting a new PCP deal / credit rating

No it won't as said.....but you can also do that with a standard HP agreement.

 

[esox]

Can't begin to imagine why you'd give a new driver a new car,

If that was directed to me i can report that she is not a new driver.
She has been driving for 10+ years the last five of which has been with a company car so we`re basically `starting from scratch` now with new car, insurance etc.....

Looks like a Peugeot 208 is at the top of the list at the moment, new and on PCP.
Test drive next week probably and then the negotiations start assuming she likes it..

Any advice on getting a good deal - if any are available when you`re PCPing?
`Spose i better brace myself for the inevitable battle of wits with car salespersons.

 

[Bobby Dazzler]

If that was directed to me i can report that she is not a new driver.
She has been driving for 10+ years the last five of which has been with a company car so we`re basically `starting from scratch` now with new car, insurance etc.....

Looks like a Peugeot 208 is at the top of the list at the moment, new and on PCP.
Test drive next week probably and then the negotiations start assuming she likes it..

Any advice on getting a good deal - if any are available when you`re PCPing?
`Spose i better brace myself for the inevitable battle of wits with car salespersons.

It will be interesting to hear how much room there is for negotiation.

 

[MikeInWimbledon]

If that was directed to me i can report that she is not a new driver.
She has been driving for 10+ years the last five of which has been with a company car so we`re basically `starting from scratch` now with new car, insurance etc.....

Apologies. I jumped to the wrong conclusion. Most months there's a "what should i buy my daughter as a first car" question.

Good luck with the search. It'll be interesting to see interest there is around in these higher interest rate, but cost constrained "recession" days.

 

[ALFAitalia]

She has been driving for 10+ years the last five of which has been with a company car so we`re basically `starting from scratch` now with new car, insurance etc.....

Why?....as long as shes not had any claims, and gets a letter from the company insurers stating that, the new insurance company will probably give her some NCB. That's what I did. I drove company Audi and VW for 20 claim free years when I was selling them. When I started my own policy they gave me maximum no claims discount from the off.

 

[esox]

Just a quickie on the servicing of a car on PCP; if the car service schedule is at 1-year intervals and you intend to hand the car back/change at the end of the 3-tear term are you obliged to pay for the third year service and then hand the car straight back?