The PCP deals and Q&A thread

[rsbmw]

Shared this PCP Calculator spreadsheet in google docs, hopefully helpful to those who enjoy spreadsheet based planning.

https://drive.google.com/file/d/0Bx5Jfsdt4yqIRDVjQ...

[Scottland]

rsbmw said:

Shared this PCP Calculator spreadsheet in google docs, hopefully helpful to those who enjoy spreadsheet based planning.

https://drive.google.com/file/d/0Bx5Jfsdt4yqIRDVjQ...

Thanks for that - useful.


Coast2Coast cars have ~£7k off list on the M140i at the moment, unable to give a proper quote until it's listed with options on the dealer network system though.

[cdrx]

Some PCP offers I've got recently from Cooper BMW Reading

440i M-Sport Coupe
£3000 deposit
47 x £430.52
GFV £14,678.83
10k miles

435d xDrive M Sport Coupe
£3000 deposit
47 x £433.21
GFV 16,884.03

3.9% APR on both

[n_const]

Maybe not the most PH cars in the world, but if anyone wants a Suzuki PCP quote please feel free to email me ! Can also help with Honda quotes.

[Tam_Mullen]

I've never had a car on any sort of finance, neither has anyone in my family, so I don't really understand how it all works. What's the difference (basically) between PCP and leasing? How come people are saying lease under their breath etc.

[Jonno02]

Tam_Mullen said:

I've never had a car on any sort of finance, neither has anyone in my family, so I don't really understand how it all works. What's the difference (basically) between PCP and leasing? How come people are saying lease under their breath etc.

There are pro's and cons of both. I've done both and the differences are with a lease the deal is the deal.

Lease: Say a 3+23 deal of £300 a month. You pay £900 deposit then 23 monthly payments of £300. The car is then inspected and handed back. You do not have the option to purchase the car, no matter how much you love it. A spouse or family member can though, however, the cost of purchasing the car from the lease company is normally more than what you can get one for on autotrader etc, based on the fact they know people will overpay for a car that they've owned since new. All damage will be noted, no matter how minor and you may be charged very decent rates, or absolutely ridiculous repair prices. You are in the deal, you have no option to back out.

With PCP, you can tailor the deal to how you want. You can put in a huge deposit, or a very little deposit. A lot of manufacturers, VW being one, will even take a £500 deposit and refund this on collection of the car, effectively making it a 0% deposit. with PCP you can trade the car in whenever you want. I prefer this as your lifestyle can change a lot in 2 years(using this term as most leases are 2 years). Your can will be given a Guaranteed Future Value which is normally set a few thousand pounds below market value. This is done so that people think "oh great, I'm £3,500 in equity with the car, I'll go and change it now" thus making the PCP train steam on. It's also up to you if you want to repair any damage to the car before trading it in, or hope the dealer doesn't notice.

Both are good in their own ways.

[Willlll]

Fiesta ST2 through Drive the Deal

£14440
£8950 GMFV
£500 Down
£214 x 24 months @ 6k a year

Total cost £5636 over 2 years.

Should fetch £11k easily after 2 years giving £2k of equity.

Realistic cost over 2 years...

£3636 or £151 a month.


I did it 2 years ago and just about to sell up. Stunning value.

[wemorgan]

Jonno02 said:

Lease: Say a 3+23 deal of £300 a month. You pay £900 deposit then 23 monthly payments of £300. .

You don't pay deposits in lease deals. The initial payment is the 1st month's payment.

[Jonno02]

wemorgan said:

You don't pay deposits in lease deals. The initial payment is the 1st month's payment.

Same difference at the end of the day.

[911-32]

Another who has always owned my cars vs lease or PCP.

How does it work at the end of the PCP? There is a GFV, meaning I can hand the car back and the difference between GFV and mkt value is the equity? And I keep that? Or apply it to a new deal?

Sorry for the newbie questions!

[adaM3]

911-32 said:

Another who has always owned my cars vs lease or PCP.

How does it work at the end of the PCP? There is a GFV, meaning I can hand the car back and the difference between GFV and mkt value is the equity? And I keep that? Or apply it to a new deal?

Sorry for the newbie questions!

Equity I should imagine isn't actually equity until the car is sold, so at I guess you sell the car, pay the GFV figure and keep the difference.

[adaM3]

Anyone else getting a little bit addicted to carwow??

[Solel]

Willlll said:

Fiesta ST2 through Drive the Deal

£14440
£8950 GMFV
£500 Down
£214 x 24 months @ 6k a year

Total cost £5636 over 2 years.

Should fetch £11k easily after 2 years giving £2k of equity.

Realistic cost over 2 years...

£3636 or £151 a month.


I did it 2 years ago and just about to sell up. Stunning value.

Using this as an example, if you decided to buy the car at the end of the term, what price do you pay- GMFV, or market value?

[Dr Jekyll]

911-32 said:

Another who has always owned my cars vs lease or PCP.

How does it work at the end of the PCP? There is a GFV, meaning I can hand the car back and the difference between GFV and mkt value is the equity? And I keep that? Or apply it to a new deal?

Sorry for the newbie questions!

Hand the car back and you either use any equity as a deposit on a new deal, or you say goodbye to it. You can see why dealers are so keen to sell PCP deals.

[n_const]

Solel said:

Using this as an example, if you decided to buy the car at the end of the term, what price do you pay- GMFV, or market value?

You pay the gmfv.

[911-32]

OK. So what am I actually financing? The difference between the full price and the GFV? Call me stupid but I am still struggling to get my head around the economics.

[ThunderSpook]

Following on from a conversation at work, this seems as good a place as any to ask.

Do people really not balk at the idea of paying £3-400 a month or more for a car and not having anything to show for it at the end? I just don't understand it.

[Dr Jekyll]

911-32 said:

OK. So what am I actually financing? The difference between the full price and the GFV? Call me stupid but I am still struggling to get my head around the economics.

You're financing the full price. But not paying off the GFV part until the end of the agreement.

Suppose you had a five year loan. After 3 years you could pay off the balance in one go, or you could keep paying for 2 more years.

A PCP is a bit like that except for the presumption you will indeed pay off the last bit after (EG) 3 years. Either by cash or by handing the car back.

[Yadizzle1]

911-32 said:

OK. So what am I actually financing? The difference between the full price and the GFV? Call me stupid but I am still struggling to get my head around the economics.

You're financing the whole car, however at the end of the term you have the option to; give the car back for the GFV, sell the car and keep the difference between GFV and sale value, p/x for another car or pay the balloon payment and keep the car.

The amount you'll be paying monthly is the difference between sale price and GFV, plus interest divided by agreement period. Any deposit you make will reduce the amount you borrow so you will be financing less.

[talksthetorque]

ThunderSpook said:

Following on from a conversation at work, this seems as good a place as any to ask.

Do people really not balk at the idea of paying £3-400 a month or more for a car and not having anything to show for it at the end? I just don't understand it.

So the alternative for a new car is that you buy it for cash and then sell it after three years. Which will (on similar deals for cash and PCP) be about the same £3-400 in depreciation. But you had to front up the money.
Or you lease it, usually for a bit less, and forego the ability to buy it at the end or sell it halfway through.