Why the PH hatred for PCP?

[Barga]

Gordon_Roslin said:

Joey Deacon said:

No she doesn't. All of these "it's only £99 a month, cheaper than owning a shed" neglect to mention the £2k deposit, £300 document fee and 5k annual mileage limits.

If anyone can actually show me a deal that is £69 a month (or £99 for that matter) with no deposit I will order one today.

Well said Deacon. It speaks volumes that PCP disciples have to fabricate obviously false numbers to prop up the preposterousness of the notion that PCP tends to work out better. £69 a month for a car? Bahahahaha.

PhD in ManMaths available at the university of PistonHeads @£69pm over 3 years!

[roadsmash]

jimPH said:

Totally missed the point as usual. PCP seems to turn people into financial wizards overnight, purely by using the same product as someone wealthy. The only difference is, one uses it for convenience, the other uses it because he hasn't got any money (But convinces everyone their reasons are the same, hence the usual meaningless comparisons).

As usual? Is that the best you could come up with? How depressing.

Most people PCP a car because they don’t want to spend their whole savings on one, not because the savings don’t exist.

They can afford the payments, they can afford the balloon, so it’s OK. Don’t panic. You needn’t worry, please relax.

Do you know the repossession % of financed cars in the UK? Probably not, but I can assure you it’s a very small % and not worth worrying your precious head about it.

[Barga]

roadsmash said:

jimPH said:

Totally missed the point as usual. PCP seems to turn people into financial wizards overnight, purely by using the same product as someone wealthy. The only difference is, one uses it for convenience, the other uses it because he hasn't got any money (But convinces everyone their reasons are the same, hence the usual meaningless comparisons).

As usual? Is that the best you could come up with? How depressing.

Most people PCP a car because they don’t want to spend their whole savings on one, not because the savings don’t exist.

They can afford the payments, they can afford the balloon, so it’s OK. Don’t panic. You needn’t worry, please relax.

Do you know the repossession % of financed cars in the UK? Probably not, but I can assure you it’s a very small % and not worth worrying your precious head about it.

What is the %?

[Deep Thought]

TheStigsWeeBrother said:

Deep Thought said:

jimPH said:

Totally missed the point as usual. PCP seems to turn people into financial wizards overnight, purely by using the same product as someone wealthy. The only difference is, one uses it for convenience, the other uses it because he hasn't got any money (But convinces everyone their reasons are the same, hence the usual meaningless comparisons).

And you're assuming - as is usual- that everyone who uses a PCP deal is doing so because they havent got any money?

Buying a car with cash makes people a financial wizard then does it? Its always better to buy any car for cash than to take a PCP deal?

Do you think the rapid rise in the use of PCP is because people have more or less savings?

Hardly a rapid rise? Ford introduced them in the early 80s. Even twelve years ago when i was buying my 535d the sales guy said 85% of new car sales were PCP.

Before PCPs people were using straight HP finance deals, so its not like they'd the savings then to buy cars. I sold new Austin Rovers back in '89/90 and new car sales were almost always on HP and people simply came back after three years, traded in and bought another.

[Deep Thought]

Gordon_Roslin said:

ignoring the total overall cost of the package (which is obviously higher once payments and interest are factored in).

Uh huh. And what if the overall cost of the "package" is lower than a cash purchase?

Noone is saying anyone "must" take on a PCP deal or that its best every time. But sometimes it is.

Gordon_Roslin said:

People genuinely seem to think car manufacturers are out to do them a favour, or that taking out a PCP means they are smarter than the finance departments of the multi-billion dollar corporations with whom they are tangling.

Ah right, and if you buy cash then the car company are losing money are they?

Whilst no car company is "doing you a favour" ever if the terms of getting the vehicle by using one particular route over another work out better, why would you not avail of that?

I've bought cars over the last 10 years predominantly with cash, a couple of times with PCP and a couple of times with a cheap loan (2.9% APR from memory). Why, when considering my next purchase, would i rule out a PCP deal simply it seems on the basis that some dheads out there seem to use it to live beyond their means or allegedly impress the neighbours?

What are you going to aggressively tell me next? Dont use credit cards because a minority of people get in debt with them?

[Deep Thought]

Gordon_Roslin said:

Joey Deacon said:

No she doesn't. All of these "it's only £99 a month, cheaper than owning a shed" neglect to mention the £2k deposit, £300 document fee and 5k annual mileage limits.

If anyone can actually show me a deal that is £69 a month (or £99 for that matter) with no deposit I will order one today.

Well said Deacon. It speaks volumes that PCP disciples have to fabricate obviously false numbers to prop up the preposterousness of the notion that PCP tends to work out better. £69 a month for a car? Bahahahaha.

Well, not quite £99 a month with zero deposit, but i didnt look very hard - brand new car, £104 initial payment £104 a month.

https://www.evanshalshaw.com/new-cars/dacia/sander...

And as noone said it had to be new, PCP an Approved Used Fiat 500 for £99 deposit, £99 a month

https://www.donnellygroup.co.uk/fiat/used-car-offe...

And its not like sub £100 a month with no / very little deposit havent existed in the recent past...

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Deep Thought on Saturday 12th January 16:08

Edited by Deep Thought on Saturday 12th January 16:10

Edited by Deep Thought on Saturday 12th January 16:17

[av185]

Deep Thought said:

av185 said:

Yep equities always increase in value.

Especially at the moment.

Whereas of course buying a car with cash goes up in value?

Yep the smart money buys cars which appreciate.

[Deep Thought]

av185 said:

Deep Thought said:

av185 said:

Yep equities always increase in value.

Especially at the moment.

Whereas of course buying a car with cash goes up in value?

Yep the smart money buys cars which appreciate.

Indeed.

[Wooda80]

av185 said:

Deep Thought said:

av185 said:

Yep equities always increase in value.

Especially at the moment.

Whereas of course buying a car with cash goes up in value?

Yep the smart money buys cars which appreciate.

This might be an interesting one to come back to in a few years....

The smart money sells cars which have already appreciated. Usually to the rich and greedy who expect the rise to carry on.

What will my investment car pay me as a dividend while I wait for its capital value to increase? Or will it continue to ask me for further investment like some rights issue in a dodgy AIM firm that's always strapped for cash?

[av185]

Deep Thought said:

Brand new car, £104 initial payment £104 a month.

https://www.evanshalshaw.com/new-cars/dacia/sander...

And as noone said it had to be new, PCP an Approved Used Fiat 500 for £99 deposit, £99 a month

https://www.donnellygroup.co.uk/fiat/used-car-offe...

And its not like sub £100 a month with no / very little deposit havent existed in the recent past...

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Deep Thought on Saturday 12th January 16:08

Edited by Deep Thought on Saturday 12th January 16:10

So taking your carefully selected new car example of the delightful Dacia Sandero assuming a customer has cash in his back pocket but could also take pcp, these are the basic two options:

1. Pcp £104 per month over 48 months total repayable £8320 3.5% fixed with APR 6.9%.

2. Walk in with cash and obtain a sizeable cash discount for on the road cost of £6995. On an unpopular diffult to shift outmoded shed such as this I would expect a sizeable discount probably up to 20% but let's say the car is bought for say £5720.


So all other things being equal the smart money clearly does not go on the pcp costing £8320 compared to outright purchase at £5720, which is £2600 less not forgetting the opportunity cost of lost capital of course.

And the eye watering rip off 6.9% apr surely is the nail in the coffin for the pcp.

[Muzzer79]

av185 said:

Deep Thought said:

Brand new car, £104 initial payment £104 a month.

https://www.evanshalshaw.com/new-cars/dacia/sander...

And as noone said it had to be new, PCP an Approved Used Fiat 500 for £99 deposit, £99 a month

https://www.donnellygroup.co.uk/fiat/used-car-offe...

And its not like sub £100 a month with no / very little deposit havent existed in the recent past...

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Deep Thought on Saturday 12th January 16:08

Edited by Deep Thought on Saturday 12th January 16:10

So taking your carefully selected new car example of the delightful Dacia Sandero assuming a customer has cash in his back pocket but could also take pcp, these are the basic two options:

1. Pcp £104 per month over 48 months total repayable £8320 3.5% fixed with APR 6.9%.

2. Walk in with cash and obtain a sizeable cash discount for on the road cost of £6995. On an unpopular diffult to shift outmoded shed such as this I would expect a sizeable discount probably up to 20% but let's say the car is bought for say £5720.


So all other things being equal the smart money clearly does not go on the pcp costing £8320 compared to outright purchase at £5720, which is £2600 less not forgetting the opportunity cost of lost capital of course.

And the eye watering rip off 6.9% apr surely is the nail in the coffin for the pcp.

Your discount for cash will, if anything, be less than the equivalent pcp discount

Dealers make money from finance, not from trading.

I’ve always been offered a better list price discount for taking finance than for paying cash.

[av185]

Wooda80 said:

What will my investment car pay me as a dividend while I wait for its capital value to increase?

Clearly the pleasure of driving it is the only dividend you really need.

[Deep Thought]

Wooda80 said:

av185 said:

Deep Thought said:

av185 said:

Yep equities always increase in value.

Especially at the moment.

Whereas of course buying a car with cash goes up in value?

Yep the smart money buys cars which appreciate.

This might be an interesting one to come back to in a few years....

The smart money sells cars which have already appreciated. Usually to the rich and greedy who expect the rise to carry on.

What will my investment car pay me as a dividend while I wait for its capital value to increase? Or will it continue to ask me for further investment like some rights issue in a dodgy AIM firm that's always strapped for cash?

+1

It always bemuses me how wide the PCP nay sayers spectrum allows them to sway to keep their narrow minded views intact.

We've been predominantly talking about the buying habits of the nation as a whole and that has pretty much always tended to be, buy a car run it 3 years ish then sell it before its perceived to be going to cause too much trouble.

For those people there clearly has been merit in instead of scraping together some money or taking out a loan and buying some 3-6 year old car, maintaining it as best you can and hoping it doesnt give any big amount of trouble before you trade it in in 3 years time simply paying a monthly amount for a new car. The payments for which broadly been in line with peoples expectations / affordability.

Under those circumstances there are deals that can be got via PCP or lease that can sometimes beat other methods of ownership or equal or roughly equal them.

So then we start to talk about scenarios whereby "buying" a depreciating asset doesnt seem to be any wiser than PCPing it anyway. In fact some people who "buy" their car get a stty deal. Just because you use cash doesnt make you "better".

Then we get the goalposts moved to "oh well people should buy cars that appreciate it value"

True, they should, but then are we not getting away from the core discussion here that some people are "outraged" that common people out there are PCP depreciating assets when they cant afford them. Are we really saying common people out there looking for cars to get them to work and the kids to school should actually be looking at cars that appreciate?

Seems a massive leap IMHO.

Either we're talking about the general populous and what they can / should do or we're talking about buying non everyday cars that appreciate / dont depreciate. The two seem to be generally mutually exclusive as far as rolling it out as a "solution" to the general populous are concerned?

Edited by Deep Thought on Saturday 12th January 17:06

[av185]

Muzzer79 said:

Your discount for cash will, if anything, be less than the equivalent pcp discount

Dealers make money from finance, not from trading.

I’ve always been offered a better list price discount for taking finance than for paying cash.

Yes I am aware of the extortionate commissions paid for securing finance.

So are you saying in my example that you could secure a pcp deal on that car for £5720 assuming you could buy it cash for the same discount.

In that case why doesn't the dealer advertise this preferential deal?

Or is it more the case that any discount would simply increase the 'mumflies' as expected.

[anonymous-user]

av185 said:

Deep Thought said:

Brand new car, £104 initial payment £104 a month.

https://www.evanshalshaw.com/new-cars/dacia/sander...

And as noone said it had to be new, PCP an Approved Used Fiat 500 for £99 deposit, £99 a month

https://www.donnellygroup.co.uk/fiat/used-car-offe...

And its not like sub £100 a month with no / very little deposit havent existed in the recent past...

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Deep Thought on Saturday 12th January 16:08

Edited by Deep Thought on Saturday 12th January 16:10

So taking your carefully selected new car example of the delightful Dacia Sandero assuming a customer has cash in his back pocket but could also take pcp, these are the basic two options:

1. Pcp £104 per month over 48 months total repayable £8320 3.5% fixed with APR 6.9%.

2. Walk in with cash and obtain a sizeable cash discount for on the road cost of £6995. On an unpopular diffult to shift outmoded shed such as this I would expect a sizeable discount probably up to 20% but let's say the car is bought for say £5720.


So all other things being equal the smart money clearly does not go on the pcp costing £8320 compared to outright purchase at £5720, which is £2600 less not forgetting the opportunity cost of lost capital of course.

And the eye watering rip off 6.9% apr surely is the nail in the coffin for the pcp.

Knowing Evans Halshaw the deal won't even actually exist. I was desperate for a car a few years ago and they had an offer for a Vauxhall Corsa for £129 a month with £129 deposit, they even had one stickered up outside with this offer on. I went to the dealer, said "take my money" only to be told they didn't have any of those cars left. He went away to "speak with his manager" and came back to tell me he could get me one for £200 a month so I shook my head and walked.

Even if that deal does exist, that Sandero is bottom of the range, no radio, wind up windows, no central locking, no air con it is really poverty spec.

Oh and 6000 miles a year limit....

Edited by anonymous-user on Saturday 12th January 17:07

[Deep Thought]

av185 said:

So taking your carefully selected new car example of the delightful Dacia Sandero assuming a customer has cash in his back pocket but could also take pcp, these are the basic two options:

1. Pcp £104 per month over 48 months total repayable £8320 3.5% fixed with APR 6.9%.

2. Walk in with cash and obtain a sizeable cash discount for on the road cost of £6995. On an unpopular diffult to shift outmoded shed such as this I would expect a sizeable discount probably up to 20% but let's say the car is bought for say £5720.


So all other things being equal the smart money clearly does not go on the pcp costing £8320 compared to outright purchase at £5720, which is £2600 less not forgetting the opportunity cost of lost capital of course.

And the eye watering rip off 6.9% apr surely is the nail in the coffin for the pcp.

They werent "carefully selected", it was deals found with about five minutes cursory effort to illustrate a point that very low deposit / low monthly payments could be found, against the original hypothesis that PCPers always "forgot" deposit and admin fees when quoting the "cars can be got for £100 a month which can be better than running some stty old unreliable banger"

And again - you're moving the goal posts. You're now scrutinising the interest rate rather than accepting the point that was being made (see last sentence of above paragraph).

And a couple of points :-

• 6.9% isnt an "eye watering rip off", given the context
• You WONT not in a MILLION YEARS get a sizable cash discount off a new Dacia. 20%???? not a pups chance. They've already factored in £250 discount to the deal and thats most likely your lot.

Edited by Deep Thought on Saturday 12th January 17:31

[Deep Thought]

av185 said:

Yes I am aware of the extortionate commissions paid for securing finance.

So are you saying in my example that you could secure a pcp deal on that car for £5720 assuming you could buy it cash for the same discount.

In that case why doesn't the dealer advertise this preferential deal?

Or is it more the case that any discount would simply increase the 'mumflies' as expected.

Let me reiterate it for the absolute avoidance of doubt - you will NOT get 20% off a new Dacia Sandero.

And even IF you did, that would simply translate to an even lower monthly payment once factored in.

[Deep Thought]

Joey Deacon said:

Knowing Evans Halshaw the deal won't even actually exist. I was desperate for a car a few years ago and they had an offer for a Vauxhall Corsa for £129 a month with £129 deposit, they even had one stickered up outside with this offer on. I went to the dealer, said "take my money" only to be told they didn't have any of those cars left. He went away to "speak with his manager" and came back to tell me he could get me one for £200 a month so I shook my head and walked.

Even if that deal does exist, that Sandero is bottom of the range, no radio, wind up windows, no central locking, no air con it is really poverty spec.

Oh and 6000 miles a year limit....

Edited by Joey Deacon on Saturday 12th January 17:07

I dont think it would be a desperately difficult deal to replicate. £6995 car, £250 standard deposit contribution, residual set at £2,974 by the manufacturer anyway. Do the maths.

6K is more than enough for some people. I do around that maybe less.

And again, you're picking holes in it to move the goal posts - i posted the example as a response to people criticising the "cars can be got for £100 a month which can be better than running some stty old unreliable banger" statement. Cars can be got for around that with a very low deposit and i can see why people would want to do that rather than run some old banger.

Edited by Deep Thought on Saturday 12th January 17:32

[Deep Thought]

av185 said:

So all other things being equal the smart money clearly does not go on the pcp costing £8320 compared to outright purchase at £5720, which is £2600 less not forgetting the opportunity cost of lost capital of course.

Just re-reading that. Thats a wholly stunning unsubstantiated leap you're making there - its not a £5,720 car after discount. Its a £6995 car. Dealer is putting in £250, you put in just £99.

And even IF 20% was avail, that would be avail to the PCP customer to reduce the payments further.

So its £8320 versus £6995 not £5720.

And again, the point was about simple cheap monthly payments, not versus the cash alternative.

[av185]

Deep Thought said:

av185 said:

So taking your carefully selected new car example of the delightful Dacia Sandero assuming a customer has cash in his back pocket but could also take pcp, these are the basic two options:

1. Pcp £104 per month over 48 months total repayable £8320 3.5% fixed with APR 6.9%.

2. Walk in with cash and obtain a sizeable cash discount for on the road cost of £6995. On an unpopular diffult to shift outmoded shed such as this I would expect a sizeable discount probably up to 20% but let's say the car is bought for say £5720.


So all other things being equal the smart money clearly does not go on the pcp costing £8320 compared to outright purchase at £5720, which is £2600 less not forgetting the opportunity cost of lost capital of course.

And the eye watering rip off 6.9% apr surely is the nail in the coffin for the pcp.

They werent "carefully selected", it was deals found with about five minutes cursory effort to illustrate a point that very low deposit / low monthly payments could be found, against the original hypothesis that PCPers always "forgot" deposit and admin fees when quoting the "cars can be got for £100 a month which can be better than running some stty old unreliable banger"

And again - you're moving the goal posts. You're now scrutinising the interest rate rather than accepting the point that was being made (see last sentence of above paragraph).

And a couple of points :-

• 6.9% isnt an "eye watering rip off", given the context
• You WONT not in a MILLION YEARS get a sizable cash discount off a new Dacia. 20%???? :rotfl: not a pups chance. They've already factored in £250 discount to the deal and thats most likely your lot.

Now it's you who is moving the goal posts.

And anyone prepared to pay effectively well over 8 grand for a basic outmoded piece of ste like that Dacia really needs to have a word with themselves.

And I was never comparing running some stty old banger compared to pcp. My point was that in your example there would be a distinct downside in terms of excess costs in taking the pcp v cash deal EVEN now accepting that you have to pay more say even £6500 for the car.

Also it is interesting what the previous poster said concerning the relative absence of pcp deals at the headline grabbing rate which I have heard before although it actually comes as no surprise that everything isn't as perfect as it's made out to be in the beautiful rose tinted pcp garden.