PCP deal calculation help
Discussion
daemon said:
TA14 said:
You need an example where the PCP monthly payments are lower but the overall cost is higher.
Why?Mandat said:
In terms of total cost, the PCP will work out higher becuase the GFV is not reducing over the term, however in my situation I chose the higher overall cost for the benefit of lower monthly payments.
TA14 said:
daemon said:
TA14 said:
You need an example where the PCP monthly payments are lower but the overall cost is higher.
Why?Mandat said:
In terms of total cost, the PCP will work out higher becuase the GFV is not reducing over the term, however in my situation I chose the higher overall cost for the benefit of lower monthly payments.
daemon said:
The difference between that stance above and the minority "anti PCP" stance is that with their viewpoint comes attached the view that people who use or have used PCP deals are "financially naive", "cant do simple maths", "cant afford the car", etc, etc.
No I think you will find that those who have issues are quite the opposite, being told that PCP offers a better deal than cash (it rarely does),and ignoring that there is a significant fee for such flexibility and those people who do pay cash for their cars are somehow financially naive. Coupling that up with some other nonsense about investing in property is smoke and mirrors.
PCP is an option , its not good or bad , its just a way to get a car but there is a great deal of rubbish spouted about it on here.
liner33 said:
daemon said:
The difference between that stance above and the minority "anti PCP" stance is that with their viewpoint comes attached the view that people who use or have used PCP deals are "financially naive", "cant do simple maths", "cant afford the car", etc, etc.
No I think you will find that those who have issues are quite the opposite, being told that PCP offers a better deal than cash (it rarely does),and ignoring that there is a significant fee for such flexibility and those people who do pay cash for their cars are somehow financially naive. That being a prime example of "people who use PCP deals cant afford it" and "you're financially a bit thick"???????
Can you show me where someone said people who bought with cash were stupid or naive or not very good at maths?
liner33 said:
Coupling that up with some other nonsense about investing in property is smoke and mirrors.
You are quoting me again out of context. I said that in the context of being goaded by Grandfondo into how i could possibly be using my cash elsewhere to better effect.liner33 said:
PCP is an option , its not good or bad , its just a way to get a car
Yes, exactly. Totally agree. And i have never said otherwise.liner33 said:
but there is a great deal of rubbish spouted about it on here.
Indeed there is 
liner33 said:
being told that PCP offers a better deal than cash (it rarely does)
You're right it rarely does. Sometimes its "similar" in terms of cost than a cash purchase. A fair amount of time its a little bit worse. Sometimes its an awful lot worse (usually if you dont follow "the rules". But that assumes everyones number one driving factor (no pun intended) is absolute cost which its not otherwise we'd all either be driving £500 snotters or new entry level Dacia Sanderosliner33 said:
,and ignoring that there is a significant fee for such flexibility
Yes. There may well be. However to a lot of people thats worth it when set against the other benefits it offers them. As has already been explained.Its quite bemusing that we're talking about whos the most "financially astute" when if financial astuteness was everyones top priority (a) they wouldnt be buying new cars and (b) they would be buying the cheapest possible option that suits their purpose.
Edited by daemon on Friday 19th December 11:02
Edited by daemon on Friday 19th December 11:02
Edited by daemon on Friday 19th December 11:07
Edited by daemon on Friday 19th December 11:07
daemon said:
Thats why i think we'll see an even bigger move to PCP deals and then on to leasing.
£32,000 for a Golf R hot hatch?
£25,000 for a Golf diesel?
£35,000 for a 2.0 litre diesel 5 series?
£40,000 for a 2.0 litre z4??
All just plain daft.
If you want a new car the de facto choice has to be a PCP or lease deal these days. I cant think of ANY reason why you'd want to put your own hard earned into run of the mill new cars these days.
100% agree, how much is a top spec corsa or clio these days? Peoples salaries simply have not increased in the last 5-7 years to match the price rises on cars.£32,000 for a Golf R hot hatch?
£25,000 for a Golf diesel?
£35,000 for a 2.0 litre diesel 5 series?
£40,000 for a 2.0 litre z4??
All just plain daft.
If you want a new car the de facto choice has to be a PCP or lease deal these days. I cant think of ANY reason why you'd want to put your own hard earned into run of the mill new cars these days.
Only way to buy them and keep the payments at levels people can afford are PCP or PCH deals, however and this is the problem, come 2/3 years when you want a new car what happened to the deposit at the start? Oops its gone. No ones left with an asset to sell anymore and get a deposit for the next car.
Only going to bugger the motor trade up more and more as time goes on.
After_Shock said:
100% agree, how much is a top spec corsa or clio these days? Peoples salaries simply have not increased in the last 5-7 years to match the price rises on cars.
Only way to buy them and keep the payments at levels people can afford are PCP or PCH deals, however and this is the problem, come 2/3 years when you want a new car what happened to the deposit at the start? Oops its gone. No ones left with an asset to sell anymore and get a deposit for the next car.
Only going to bugger the motor trade up more and more as time goes on.
PCP deals have been around for 25 years - i can remember ford doing them on the mk2 fiesta - and they're only getting more popular.Only way to buy them and keep the payments at levels people can afford are PCP or PCH deals, however and this is the problem, come 2/3 years when you want a new car what happened to the deposit at the start? Oops its gone. No ones left with an asset to sell anymore and get a deposit for the next car.
Only going to bugger the motor trade up more and more as time goes on.
Typically there is equity at the end of the deal and thats whats used to pay the deposit for the next deal. Its in the manufacturers finance company's interest to make sure theres enough there so deals are structured with a relative low PCP these days.
And of course, the customer is under no obligation to take out another PCP deal - they may well buy their next car for cash or take out a straight PCP.
Its effectively "leasing with options".
crazy about cars said:
Well saga has ended. To achieve my target Audi would have to give a £4k discount and £2.6k is the best they an do. So deposit is refunded and should be back in account by next Mon/Tues.
Learnt a lot from the process though and definitely keen on PCP if I can find a good deal.
Shame it didnt work out Learnt a lot from the process though and definitely keen on PCP if I can find a good deal.
daemon said:
Thats why i think we'll see an even bigger move to PCP deals and then on to leasing.
£32,000 for a Golf R hot hatch?
£25,000 for a Golf diesel?
£35,000 for a 2.0 litre diesel 5 series?
£40,000 for a 2.0 litre z4??
All just plain daft.
If you want a new car the de facto choice has to be a PCP or lease deal these days. I cant think of ANY reason why you'd want to put your own hard earned into run of the mill new cars these days.
I think in general car prices are not that far away from Wher they were 16 years ago. I was selling Clios in 1998 for £7995 £199 deposit and £199 a month on PCP with remote locking. No power steering, Air con etc - a basic car. £32,000 for a Golf R hot hatch?
£25,000 for a Golf diesel?
£35,000 for a 2.0 litre diesel 5 series?
£40,000 for a 2.0 litre z4??
All just plain daft.
If you want a new car the de facto choice has to be a PCP or lease deal these days. I cant think of ANY reason why you'd want to put your own hard earned into run of the mill new cars these days.
You can now get a car with much higher spec for less money...
I paid £27,500 for a Golf R32 back in 2003, so the current price is not that much higher. How much was a pint 11 years ago, how much is it now?
Edited by CarlT on Friday 19th December 17:15
daemon said:
PCP deals have been around for 25 years - i can remember ford doing them on the mk2 fiesta - and they're only getting more popular.
Typically there is equity at the end of the deal and thats whats used to pay the deposit for the next deal. Its in the manufacturers finance company's interest to make sure theres enough there so deals are structured with a relative low PCP these days.
And of course, the customer is under no obligation to take out another PCP deal - they may well buy their next car for cash or take out a straight PCP.
Its effectively "leasing with options".
Believe me I know how they work and ive seen enough examples in real life of how they work out at the end.Typically there is equity at the end of the deal and thats whats used to pay the deposit for the next deal. Its in the manufacturers finance company's interest to make sure theres enough there so deals are structured with a relative low PCP these days.
And of course, the customer is under no obligation to take out another PCP deal - they may well buy their next car for cash or take out a straight PCP.
Its effectively "leasing with options".
Buy the right car and all is good, buy a petrol automatic saloon focus and you will certainly have no equity at the end!!!
After_Shock said:
Believe me I know how they work and ive seen enough examples in real life of how they work out at the end.
Buy the right car and all is good, buy a petrol automatic saloon focus and you will certainly have no equity at the end!!!
Indeed.Buy the right car and all is good, buy a petrol automatic saloon focus and you will certainly have no equity at the end!!!
Edited by daemon on Friday 19th December 15:49
Mandat said:
TA14 said:
Never mind, no doubt mandat will know the answer.
I'm lost as well. What was the specific question?Mandat said:
I took out a PCP with Audi this summer and my monthly payments are around £350 per month. With a comparable HP / loan purchase, the monthly payments would be around £900. In terms of total cost, the PCP will work out higher because the GFV is not reducing over the term, however in my situation I chose the higher overall cost for the benefit of lower monthly payments.
What made the PCP more expensive?TA14 said:
Mandat said:
TA14 said:
Never mind, no doubt mandat will know the answer.
I'm lost as well. What was the specific question?Mandat said:
I took out a PCP with Audi this summer and my monthly payments are around £350 per month. With a comparable HP / loan purchase, the monthly payments would be around £900. In terms of total cost, the PCP will work out higher because the GFV is not reducing over the term, however in my situation I chose the higher overall cost for the benefit of lower monthly payments.
What made the PCP more expensive?Gassing Station | General Gassing | Top of Page | What's New | My Stuff