PCP: How many people actually pay the balloon
Discussion
Ahh, the weekly finance thread. Jolly good.
For the record I've had a few PCPs - continued some, paid off others. Depends on my circumstances at the time.
Got one now as its a big assed Euro 5 diesel and if the gubberment starts getting frisky with diesels it's handy that I can throw the keys back at Volvo when it's worth 25p.
Unfortunately, I like the car so may well just pay it off and then watch as I pay a billion pound to tax the thing, another billion to take it into that there London and then another billion for my permit as local councils see diesels as a way to replenish their coffers, sorry - help improve air quality.
No right or wrong answer with finance, it's what works for you and if you can afford the repayments, who actually gives a f
k.
For the record I've had a few PCPs - continued some, paid off others. Depends on my circumstances at the time.
Got one now as its a big assed Euro 5 diesel and if the gubberment starts getting frisky with diesels it's handy that I can throw the keys back at Volvo when it's worth 25p.
Unfortunately, I like the car so may well just pay it off and then watch as I pay a billion pound to tax the thing, another billion to take it into that there London and then another billion for my permit as local councils see diesels as a way to replenish their coffers, sorry - help improve air quality.
No right or wrong answer with finance, it's what works for you and if you can afford the repayments, who actually gives a f
k.kambites said:
I suppose if it's worth it to you, that's what matters. 
That's roughly the TCO of our two cars combined. That's the price you pay for a brand new car, I suppose.
Which surely is peanuts. When all the parameters are taken into account (warranty, repairs, tax, MOT, servicing, opportunity cost, time dedicated to MOT/servicing/repairs, depreciation) the delta can actually be very small, I know it has been in our experience. And you get a modern car that is new and probably more efficient.That's roughly the TCO of our two cars combined. That's the price you pay for a brand new car, I suppose.
Dan W. said:
I Think some people do miss the point with pcp though, A Vehicle is a depreciating asset, so why would you want to own it ?
I often see this posted but dont really see that as an argument either for or against finance You have to pay depreciation whatever way you buy
You may choose to pay interest but if you do you may well end up getting discounts which either minimise or even nullify the interest charged
PCP for manufacturers is a great way to get a customer back through the door 3 years later so thats another reason they like it
liner33 said:
I often see this posted but dont really see that as an argument either for or against finance
You have to pay depreciation whatever way you buy
You may choose to pay interest but if you do you may well end up getting discounts which either minimise or even nullify the interest charged
PCP for manufacturers is a great way to get a customer back through the door 3 years later so thats another reason they like it
Agree pcp is our best chance at customer retention. but it shouldn't be the only way we aim at selling or getting customers back that's when you get pressured selling on pcp.You have to pay depreciation whatever way you buy
You may choose to pay interest but if you do you may well end up getting discounts which either minimise or even nullify the interest charged
PCP for manufacturers is a great way to get a customer back through the door 3 years later so thats another reason they like it
valiant said:
Ahh, the weekly finance thread. Jolly good.
No right or wrong answer with finance, it's what works for you and if you can afford the repayments, who actually gives a fk.
to fair - read the bold bit - I was actually wondering about the actual statistics of the market. as you will have noted as you read through it appears that a moderately reputable source things it's about 20% of people actually end up buying the car so 80% ( No right or wrong answer with finance, it's what works for you and if you can afford the repayments, who actually gives a f
k. ) are effectively leasing. a PHer salesperson thinks it's far lower even than that in their opinion.HTH
kambites said:
I'm not particularly pro- or anti-PCP but the answer to this is fairly obvious - because if you "rent" it you end up paying both the depreciation and someone else's profits.
Yes but if they can buy at much lower prices than you (VW FS for instance get a good deal out of VAG I reckon, plus their CAPEX are paid with cash at very low rates), their profit is a portion of the saving they're prepared to share. They prefer discounting that way, for residual protection reasons.But the kicker is how aggressively yield manged the deals can be in a very competitive market with low OH. And it's not that difficult to exploit that. PH is a very good source of knowledge.
nickfrog said:
No they don't get forgotten 
. I'll show you my maths : Tiguan 2.0 TDI Match. £5,240 over 2 years including deposit, fees, tax, whatever. The car was £26k list and available at £22k after discount. It has lost £8k since then if you sell privately, more to the trade.
So lease has beaten depreciation by a long shot. Add £35 opp. cost/month on the £22k at 2% and buying would have been £370/month without tax as opposed to £218 rented. Why pay more for a new car taxed, warrantied, zero consumables, zero servicing ?
That's great (well not that great actually, they were as low as £4K at one point) - but the thread is about PCPs. . I'll show you my maths : Tiguan 2.0 TDI Match. £5,240 over 2 years including deposit, fees, tax, whatever. The car was £26k list and available at £22k after discount. It has lost £8k since then if you sell privately, more to the trade. So lease has beaten depreciation by a long shot. Add £35 opp. cost/month on the £22k at 2% and buying would have been £370/month without tax as opposed to £218 rented. Why pay more for a new car taxed, warrantied, zero consumables, zero servicing ?
I got a bank loan to pay off my Fiesta ST. simple reason was I was wanting to save for a house, but didn't want to commit to cycle of pcp again. The dealer did offer me 2k more which some might say take it and buy a banger but my car is my only vice.
I am now in a house and changed cars.. on a pcp deal again.
I am now in a house and changed cars.. on a pcp deal again.
nickfrog said:
kambites said:
I'm not particularly pro- or anti-PCP but the answer to this is fairly obvious - because if you "rent" it you end up paying both the depreciation and someone else's profits.
Yes but if they can buy at much lower prices than you (VW FS for instance get a good deal out of VAG I reckon, plus their CAPEX are paid with cash at very low rates), their profit is a portion of the saving they're prepared to share. They prefer discounting that way.But the kicker is how aggressively yield manged the deals can be in a very competitive market with low OH. And it's not that difficult to exploit that. PH is a very good source of knowledge.
Sheepshanks said:
That's great (well not that great actually, they were as low as £4K at one point) - but the thread is about PCPs.
They were as low as £4.5k as far as I can remember - which compounds the evidence. PCP and PH thought process is identical in the context of the 911R's message, to which I was replying to.
I'm on my 4th PCP and funnily enough the one I'm on now, I could have bought cash. For me I had better things to do with my money that have it sat in a car, and in this instance it's a significant amount of cash (for me). Current car is a B9 S4 Avant and I know I'm going to be in negative equity at the end but I'm likely to keep it at the end unless something comes along in the meantime.
nickfrog said:
kambites said:
nickfrog said:
Which surely is peanuts.
To you perhaps; it's certainly not to me! Each to their own I suppose.
kambites said:
You'd really pay £50 more a month to run a new Fabia estate than a second-hand Elise?
Each to their own I suppose.
What are you on about ? I am comparing like for like - older family car to new leased family car.Each to their own I suppose.
The fact that you happen to have an Elise as next to no cost doesn't change that.
I'm considering it as it's due in a few months.
I've checked the retail asking price of similar cars and they're a significant amount more than the balloon payment (albeit showroom condition with warranty). It does everything I need from a car, and whilst the appeal of something newer and shinier is always there, I feel it's time to get off the PCP merry go round.
My options are VT or hand it back, but I'd probably have to spend some ££s on refurbing all 4 alloy wheels and sorting a couple of bumper scuffs, trade it in and get hammered because it isn't showroom condition, or keep a car that's got loads of life in it that I know had been looked after, even if it's cosmetically starting to look a little 'used'.
I've checked the retail asking price of similar cars and they're a significant amount more than the balloon payment (albeit showroom condition with warranty). It does everything I need from a car, and whilst the appeal of something newer and shinier is always there, I feel it's time to get off the PCP merry go round.
My options are VT or hand it back, but I'd probably have to spend some ££s on refurbing all 4 alloy wheels and sorting a couple of bumper scuffs, trade it in and get hammered because it isn't showroom condition, or keep a car that's got loads of life in it that I know had been looked after, even if it's cosmetically starting to look a little 'used'.
Wow two PCP threads going at the same time...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Because one every week clearly wasnt enough
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Because one every week clearly wasnt enough
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