Advice on financing 997 PDK Turbo / Turbo S from OPC
Discussion
I was hoping for some advice on the financing of a purchase of a 997 Coupe PDK Turbo or Turbo S.
The 997 Turbo S is my real-world 'grail' car and so I am pretty excited to be in the market for one!
The problem is that good non-cabrio ones are quite rare, furthermore I'm looking to source one from an OPC. To complicate matters slightly more I'm looking to PCP finance a pre-owned car.
In terms of spec. / colour etc. I'm clear on what I want and what I can modify / change after the purchase if needed. The only constraint in this area is if I go down the route of a PDK Turbo I'll want the PTV, Chrono pack and dynamic cornering lights.
So the 3 variables are:
- Locate a car (this is luck of the draw I suppose but apparently in March a few roll in as owners go for a new plate car)
- Understand whether it meets my spec. (Can't control this, let's see what comes up)
- Do a good deal on the finance (this is my blind spot).
What are the key things to understand about the finance? Obviously as it is OPC the finance will be (a little?) dearer? Also the PCP may not support an older car? I aim to put down £30k deposit. What might the GFV be? I believe the variables are 1) purchase price, 2) interest rate, 3) term, 4) GFV and 5) excess mileage etc return costs. Obviously toggling all of these will produce the overall deal - but which ones are more negotiable than the others?
Any thoughts really welcome and appreciated!
Thanks
The 997 Turbo S is my real-world 'grail' car and so I am pretty excited to be in the market for one!
The problem is that good non-cabrio ones are quite rare, furthermore I'm looking to source one from an OPC. To complicate matters slightly more I'm looking to PCP finance a pre-owned car.
In terms of spec. / colour etc. I'm clear on what I want and what I can modify / change after the purchase if needed. The only constraint in this area is if I go down the route of a PDK Turbo I'll want the PTV, Chrono pack and dynamic cornering lights.
So the 3 variables are:
- Locate a car (this is luck of the draw I suppose but apparently in March a few roll in as owners go for a new plate car)
- Understand whether it meets my spec. (Can't control this, let's see what comes up)
- Do a good deal on the finance (this is my blind spot).
What are the key things to understand about the finance? Obviously as it is OPC the finance will be (a little?) dearer? Also the PCP may not support an older car? I aim to put down £30k deposit. What might the GFV be? I believe the variables are 1) purchase price, 2) interest rate, 3) term, 4) GFV and 5) excess mileage etc return costs. Obviously toggling all of these will produce the overall deal - but which ones are more negotiable than the others?
Any thoughts really welcome and appreciated!
Thanks
sasha320 said:
What are the key things to understand about the finance?
The key thing is the only winners when it comes to PCP are the dealer and bank, not the buyer.forget PCP imo it's a mugs game, And now I am going to be a bit harsh, but it's good advice.
If you cannot afford the repayments buying the car outright on a 5 year loan, then imo you cannot really afford the car. I know I'll get hassle saying this but that's why the UK is in debt lol, it is not directed to you , you may well be able to afford it and then some. But it's a rule I go by.
PCP is a way for the non rich to get into more expensive cars faster at a bigger overall cost to the buyer.
The rich also like PCP as it's just a figure and they hand the car back after 3 years and so it goes on.
A nice turbo S is what £80k with £30k down that's a £50k loan so about £900 a month for 5 years, after 2 years you will have only paid about £2k interest this way and have loads of options in 24 months time and you will have paid £22k back which should cover what the car is falling by and then some.
A PCP for £50k would be about £8k interest over 3 years, with an outstanding balloon to find of £20k and 36 payments of £1100. !
you can drop the monthly figure to £830 odd and pay more balloon, but a £30k balloon is then £9k interest and £30k to find at the end.
And yes that gets you into the car but at a cost ! 80% of buyers are happy to PCP as the cost means nothing to them just the monthly amount they are happy to pay. This does not end well for the buyer though as you can see a PCP costs the buyer £££ over a loan, and then most of the time the buyer has not got the balloon amount to pay back, so is forced to sell the car to cover that or refinance the balloon which is more interest ££
These are very rough figures, based on a bank loan for 3.5% and a Porsche PCP at 8% and rounded up or down to make life easy so can be =/- £500 on total interest, but you get the idea how PCP = buyer screwed :-) bank happy.
Edited by Porsche911R on Tuesday 21st February 10:58
Great posts thank you. The first post is really illuminating on the structure of the finance and is exactly the sort of information I was looking for.
To deal with the affordability on the nose, in terms of affording the cash purchase price and maintenance costs I can comfortably do both and given the above posts may well do.
What I thought a PCP would do for me is give me a cheap 'loan' on a smallish 'gap' amount between the deposit and the GFV. And then in a couple of year's time When I'd be typically be back in the market anyway I could buy the car outright.
What I didn't factor in (and the beauty of this forum is finding out) is that the finance is on the entire purchase price minus the deposit. Feels obvious now it has been set out in black and white!
To deal with the affordability on the nose, in terms of affording the cash purchase price and maintenance costs I can comfortably do both and given the above posts may well do.
What I thought a PCP would do for me is give me a cheap 'loan' on a smallish 'gap' amount between the deposit and the GFV. And then in a couple of year's time When I'd be typically be back in the market anyway I could buy the car outright.
What I didn't factor in (and the beauty of this forum is finding out) is that the finance is on the entire purchase price minus the deposit. Feels obvious now it has been set out in black and white!
Edited by sasha320 on Tuesday 21st February 12:20
Durzel said:
Further to the above, that is just affording the car. What about maintenance?
Would be a crying shame to own a car like that and feel like you can't enjoy it to its fullest because of the commensurate running costs.
I think direct maintenance costs are a non-issue; the bigger issue (which falls under the definition of running costs I suppose) is the cost relating to enjoying the car to the fullest by putting lots of miles on it and seeing its value plummet.Would be a crying shame to own a car like that and feel like you can't enjoy it to its fullest because of the commensurate running costs.
yes the bigger the balloon the more interest you pay even though the monthly costs are smaller.
People like smaller month by month costs and the dealers hide the over all interest, most even will not tell you what the total interest will be !
PCP is like PPI and is miss selling a product to make as much money as possible, I have sat buying cars while the sexy sale staff on the next desk have sold PCP at 11% to the 18 year old lad peering at her low cut top tongue out, excited by the new car and the sexy girl !
I have to deal with the hard faced sales manager doing cash deals, so buying PCP has some perks, you deal with cleavage and most of the time fit girls, sex sells after all, lol it's a shocking world we live in sorry to say and the car market is out of control imo.
Sales staff will miss sell to get the monthly cost to fit your needs, with out explaining your over all costs, and the balloon is just a number the buyer takes no notice of, it's 3 years later after all, who cares !!! makes me shudder and I cannot work out why people do it when faced with facts, but 80% sales are PCP these days.
I have sat with close friends and pointed all this out and they still do it ! scary !
People like smaller month by month costs and the dealers hide the over all interest, most even will not tell you what the total interest will be !
PCP is like PPI and is miss selling a product to make as much money as possible, I have sat buying cars while the sexy sale staff on the next desk have sold PCP at 11% to the 18 year old lad peering at her low cut top tongue out, excited by the new car and the sexy girl !
I have to deal with the hard faced sales manager doing cash deals, so buying PCP has some perks, you deal with cleavage and most of the time fit girls, sex sells after all, lol it's a shocking world we live in sorry to say and the car market is out of control imo.
Sales staff will miss sell to get the monthly cost to fit your needs, with out explaining your over all costs, and the balloon is just a number the buyer takes no notice of, it's 3 years later after all, who cares !!! makes me shudder and I cannot work out why people do it when faced with facts, but 80% sales are PCP these days.
I have sat with close friends and pointed all this out and they still do it ! scary !
Edited by Porsche911R on Tuesday 21st February 12:29
When I visited the dealer last October they quoted 9.9% APR on their finance.
Still significantly more than the cheapest personal loans (~3%).
Although for the amount you're looking to borrow the rates could well be more favourable.
Best advice is to make an appointment & visit the dealership. Salesman was happy to talk me through the options, repayments & financing options which are not easily available through their website. It also helps discuss the options on sourcing a car or what happens if the car comes into another OPC part of their network.
Still significantly more than the cheapest personal loans (~3%).
Although for the amount you're looking to borrow the rates could well be more favourable.
Best advice is to make an appointment & visit the dealership. Salesman was happy to talk me through the options, repayments & financing options which are not easily available through their website. It also helps discuss the options on sourcing a car or what happens if the car comes into another OPC part of their network.
It does feel like a little fraudulent actually, I believe PCP's are marketed in a way to make you believe you are financing the 'gap' between deposit and GFV.
Once you think about it, the provider of the capital tied up in the residual value of the car will want interest until they get their capital back.
So in reality all PCP is, is a break clause after the initial term and an opportunity through magical presentation of numbers to charge high interest rates.
Why exactly, as you say, would you not take a personal loan instead?
Once you think about it, the provider of the capital tied up in the residual value of the car will want interest until they get their capital back.
So in reality all PCP is, is a break clause after the initial term and an opportunity through magical presentation of numbers to charge high interest rates.
Why exactly, as you say, would you not take a personal loan instead?
It does feel like a little fraudulent actually, I believe PCP's are marketed in a way to make you believe you are financing the 'gap' between deposit and GFV.
Once you think about it, the provider of the capital tied up in the residual value of the car will want interest until they get their capital back.
So in reality all PCP is, is a break clause after the initial term and an opportunity through magical presentation of numbers to charge high interest rates.
Why exactly, as you say, would I not take a personal loan instead? Or just buy outright?
Once you think about it, the provider of the capital tied up in the residual value of the car will want interest until they get their capital back.
So in reality all PCP is, is a break clause after the initial term and an opportunity through magical presentation of numbers to charge high interest rates.
Why exactly, as you say, would I not take a personal loan instead? Or just buy outright?
Edited by sasha320 on Tuesday 21st February 12:47
Porsche911R said:
PCP is like PPI and is miss selling a product to make as much money as possible...
I do feel this too - there is potential for PCP to 'blow up' in the same way as PPI did. sasha320 said:
It does feel like a little fraudulent actually, I believe PCP's are marketed in a way to make you believe you are financing the 'gap' between deposit and GFV.
Once you think about it, the provider of the capital tied up in the residual value of the car will want interest until they get their capital back.
So in reality all PCP is, is a break clause after the initial term and an opportunity through magical presentation of numbers to charge high interest rates.
Why exactly, as you say, would you not take a personal loan instead?
You hit the nail on the head here. The actual cost and natural of the PCP is deliberately obfuscated and it is used more as a device to wedge people into the car they want, at a monthly figure they can just about handle, with much of the details and consequences swept under the rug for later.Once you think about it, the provider of the capital tied up in the residual value of the car will want interest until they get their capital back.
So in reality all PCP is, is a break clause after the initial term and an opportunity through magical presentation of numbers to charge high interest rates.
Why exactly, as you say, would you not take a personal loan instead?
I found this calculator useful to help you understand exactly how much you will be paying in interest over the term of a loan (or PCP): http://www.thecalculatorsite.com/finance/calculato...
On the finance side, I was offered a 12-month HP deal earlier this year by an OPC. It was 3% on a circa £40k purchase. This was without any negotiation. IIRC there was a ~ 90k GT4 purchase earlier this year where the buyer was being offered around 1% - not sure if he was an existing finance customer, or whether this was the exception rather than the norm.
On the finance side, I was offered a 12-month HP deal earlier this year by an OPC. It was 3% on a circa £40k purchase. This was without any negotiation. IIRC there was a ~ 90k GT4 purchase earlier this year where the buyer was being offered around 1% - not sure if he was an existing finance customer, or whether this was the exception rather than the norm.
I recently financed a Macan via Clydesdale bank using their asset finance product. Its a HP agreement with a balloon at the end much like a PCP but the balloon isn't a GFV just a final amount to be paid so its a bit more risky than the OPC PCP product. However over the 4 years its nearly £4K cheaper (on a £48K loan) than the OPC product.
Lombard do a similar product and I've used them in the past.
Lombard do a similar product and I've used them in the past.
nw942 said:
On the finance side, I was offered a 12-month HP deal earlier this year by an OPC. It was 3% on a circa £40k purchase. This was without any negotiation. IIRC there was a ~ 90k GT4 purchase earlier this year where the buyer was being offered around 1% - not sure if he was an existing finance customer, or whether this was the exception rather than the norm.
I very much expect that 3% would have been flat, not APR. 1% sounds very low though if true?sasha320 said:
Great posts thank you. The first post is really illuminating on the structure of the finance and is exactly the sort of information I was looking for.
To deal with the affordability on the nose, in terms of affording the cash purchase price and maintenance costs I can comfortably do both and given the above posts may well do.
What I thought a PCP would do for me is give me a cheap 'loan' on a smallish 'gap' amount between the deposit and the GFV. And then in a couple of year's time When I'd be typically be back in the market anyway I could buy the car outright.
What I didn't factor in (and the beauty of this forum is finding out) is that the finance is on the entire purchase price minus the deposit. Feels obvious now it has been set out in black and white!
You might not be surprised to hear that most people do not understand PCP! Its a mugs game. I just bought a one year old car and looked at PCP again just to be sure and the difference at the end of 4 years against a 2.9% loan was eye watering.To deal with the affordability on the nose, in terms of affording the cash purchase price and maintenance costs I can comfortably do both and given the above posts may well do.
What I thought a PCP would do for me is give me a cheap 'loan' on a smallish 'gap' amount between the deposit and the GFV. And then in a couple of year's time When I'd be typically be back in the market anyway I could buy the car outright.
What I didn't factor in (and the beauty of this forum is finding out) is that the finance is on the entire purchase price minus the deposit. Feels obvious now it has been set out in black and white!
Edited by sasha320 on Tuesday 21st February 12:20
Its where the dealers profit is these days.
Thanks to all contributors; where I have got to is...
1. Forget PCP.
2. If finance is needed, take an HP type loan and hunt for the best rate.
So the question now is how / where to get the best rate? Some suggestions have been made which I will explore. However there also seems to be a suggestion that the rate for a given amount will depend on the profile of the customer and what loans they have 'access' to - is this right?
As an aside, the gap between a potential OPC HP rate and the best market rate appears to be smaller than previously thought.
The good news is, with the right (low) rate and the logic set out in the first responder's post on an HP loan, I am back where I hoped to be which was to have a cheap 'loan' bridge the gap from now until 2 year's time when the next block of car cash arrives (which would be used to pay off the remaining loan rather than pay the GFV).
The suggestion was maybe £2k - £4k interest over 24 months which is nearly equivalent to the product arrangement fee for a mortgage to extract equity from a mortgage free property.
1. Forget PCP.
2. If finance is needed, take an HP type loan and hunt for the best rate.
So the question now is how / where to get the best rate? Some suggestions have been made which I will explore. However there also seems to be a suggestion that the rate for a given amount will depend on the profile of the customer and what loans they have 'access' to - is this right?
As an aside, the gap between a potential OPC HP rate and the best market rate appears to be smaller than previously thought.
The good news is, with the right (low) rate and the logic set out in the first responder's post on an HP loan, I am back where I hoped to be which was to have a cheap 'loan' bridge the gap from now until 2 year's time when the next block of car cash arrives (which would be used to pay off the remaining loan rather than pay the GFV).
The suggestion was maybe £2k - £4k interest over 24 months which is nearly equivalent to the product arrangement fee for a mortgage to extract equity from a mortgage free property.
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