APR on PCP

[mangos]

I am planning on changing my car over the next few weeks and have been looking at buying through main dealers.

I am pretty much set on a 2nd hand golf and putting down about £5k deposit.

I've found the car I am interested in buying but whats putting me off is the APR figures the online calculators are quoting is 13.4% on VW's website.

Can the APR be haggled with?

I specifically want a PCP type finance rather than a private loan as I want the option to hand the car back without the worry of clearing my own finance.

[eybic]

You could speak to a dealer, they may have other finance houses they can use. Generally the APR set by the manufacturer is pretty much set in stone.

[Patch1875]

Dealer would probably be around 7-10% I would be looking at a bank loan.

[Integroo]

APR on used PCP is always very high. Please do not take out a loan at 10% + APR.

[Draculaw]

If putting down £5k you’d likely get a better rate and lower monthlies with a new car (not to mention warranty, no MOT etc). Alternatively bank loan or Zopa to loan the balance for a used car. You’d get closer to 3% through Zopa and you’d be able to clear the balance easily if you had to by selling the car.

[mangos]

Draculaw said:

If putting down £5k you’d likely get a better rate and lower monthlies with a new car (not to mention warranty, no MOT etc). Alternatively bank loan or Zopa to loan the balance for a used car. You’d get closer to 3% through Zopa and you’d be able to clear the balance easily if you had to by selling the car.

Thanks, I just had a look and because the rates are so much better on new along with the deposit contributions its only about £20 more per month expensive than a used car.

I just sent an enquiry through to the dealer for a new GTD and was told it's on a waiting list and are suggesting 6-7 months!

[ElectricSoup]

Integroo said:

APR on used PCP is always very high. Please do not take out a loan at 10% + APR.

The PCP rate on my used Nissan, from a main dealer using their finance, is 3%.

[Draculaw]

mangos said:

Thanks, I just had a look and because the rates are so much better on new along with the deposit contributions its only about £20 more per month expensive than a used car.

I just sent an enquiry through to the dealer for a new GTD and was told it's on a waiting list and are suggesting 6-7 months!

If you don’t mind travelling check out places like Carwow as well. May well have ones in stock somewhere in the country in a spec you are after.

[GiveItSomeWellie]

ElectricSoup said:

Integroo said:

APR on used PCP is always very high. Please do not take out a loan at 10% + APR.

The PCP rate on my used Nissan, from a main dealer using their finance, is 3%.

My used GT86 was offered at 2.9%, on a new car they could only offer 4.9%. There were even some used cars offered with 0% at the time in the Steven Eagell group (January 2018).

Agreed in a vast majority of cases used PCP interest is very high, but it's always worth checking. I think some high street banks offer PCP at 5-6%, may be worth a look.

[Muzzer79]

mangos said:

I specifically want a PCP type finance rather than a private loan as I want the option to hand the car back without the worry of clearing my own finance.

If you want to do that, then don't lay down a £5k deposit.

Keep your deposit as low as possible so that if you do need to hand it back, you will not lose said deposit.

The APR on used is typically poor and not very negotiable. I would purchase with a bank loan or look at new/nearly new.

[HTP99]

ElectricSoup said:

Integroo said:

APR on used PCP is always very high. Please do not take out a loan at 10% + APR.

The PCP rate on my used Nissan, from a main dealer using their finance, is 3%.

Depends on the model, Renault were at one time offering 3.9% APR on used approved ZOE, probably to help shift all of the PCP returns.

[MOBB]

Halifax do pcp’s with decent rates

[mangos]

thanks for all the advice.
ive managed to find a PCP that is at a reasonable APR.

I cant decide now if I should be getting it over 36 or 48 months. The payments per month only vary by about £10. i would probably be looking to change at 3 years anyway, but the dealer said that even on a 48 month deal I should be able to change no problem at 36 months.

Is there any truth in this? 48 months just seems like I would be paying way too much in interest overall when I could reduce that by £1500-£2k by reducing the term ot 36 months?

[Integroo]

mangos said:

thanks for all the advice.
ive managed to find a PCP that is at a reasonable APR.

I cant decide now if I should be getting it over 36 or 48 months. The payments per month only vary by about £10. i would probably be looking to change at 3 years anyway, but the dealer said that even on a 48 month deal I should be able to change no problem at 36 months.

Is there any truth in this? 48 months just seems like I would be paying way too much in interest overall when I could reduce that by £1500-£2k by reducing the term ot 36 months?

I would always take over the shorter period. Do you really want to lock yourself into a finance deal for four years? Four years is a long time, who knows what might change about you or your circumstances.

[MrAverage]

What sort of miles are you looking to cover and how long are you intending to keep the car?

Leasing could well be an option, VAG are always pushing lease deals and some are very good.

[mangos]

MrAverage said:

What sort of miles are you looking to cover and how long are you intending to keep the car?

Leasing could well be an option, VAG are always pushing lease deals and some are very good.

about 15k minimum per year. id like to keep it long term, but option to change at 3 years would give decent flexibility in case circumstances change.

i was planning on leasing but it just didnt work out with the mileage I do

[mangos]

Integroo said:

I would always take over the shorter period. Do you really want to lock yourself into a finance deal for four years? Four years is a long time, who knows what might change about you or your circumstances.

so true. thanks

[anonymous-user]

[quote=mangos]



Hi, I agree with this too. The dealer is probably on higher commission to get you to sign over 4 years. With only 10 quid difference, take the 3 years.

[HTP99]

Pappyjohn said:

mangos said:

Hi, I agree with this too. The dealer is probably on higher commission to get you to sign over 4 years. With only 10 quid difference, take the 3 years.

Actually you are likely to find that the dealer would rather a 3 year PCP agreement as it means a shorter change cycle 2.5 - 3 years vs 3.5 - 4 years.

In the past we have had better incentives from the manufacturer to push 36m PCP's as opposed to 48m PCP's on new vehicles.

[Andy665]

mangos said:

thanks for all the advice.
ive managed to find a PCP that is at a reasonable APR.

I cant decide now if I should be getting it over 36 or 48 months. The payments per month only vary by about £10. i would probably be looking to change at 3 years anyway, but the dealer said that even on a 48 month deal I should be able to change no problem at 36 months.

Is there any truth in this? 48 months just seems like I would be paying way too much in interest overall when I could reduce that by £1500-£2k by reducing the term ot 36 months?

There are only three ways that you will be able to get out of a 48 month PCP at 36 months:

1. There is a lot of equity in the car - created by either / or a large deposit and a very low Final Payment

2. You are happy to stump up the negative equity that may be in the deal

3. The dealer is happy to cover any negative equity over and above the good deal which I'm sure he is promising you

If you are likely to want to change at 36 months and there is a negligible difference in payments then you'd be crazy to go for the 48 month deal

Edited by Andy665 on Monday 4th March 18:40