Why the PH hatred for PCP?

[jimPH]

Brooking10 said:

It’s clearly caused you enough consternation to come on the Internet, repeatedly, and assert that somehow a commercial organisation should have acted as a member of your family’s financial and decision making compass.

No it hasn't. I haven't come looking on the internet to post anything in particular, I've come across this thread and the discussion has evolved, mostly by your questioning resulting in me posting my own personal experience. I've barely given it a second thought. Once this discussion finishes, it might be years before I speak of it again.

I refer to previous posts regarding response behaviours. You seem to be typical.

[anonymous-user]

jimPH said:

Brooking10 said:

It’s clearly caused you enough consternation to come on the Internet, repeatedly, and assert that somehow a commercial organisation should have acted as a member of your family’s financial and decision making compass.

No it hasn't. I haven't come looking on the internet to post anything in particular, I've come across this thread and the discussion has evolved, mostly by your questioning resulting in me posting my own personal experience. I've barely given it a second thought. Once this discussion finishes, it might be years before I speak of it again.

I refer to previous posts regarding response behaviours. You seem to be typical.

Come off it, you’ve used the same line of thought in previous threads on the matter.

Typical of what ?

Pointing out the hyperbole behind your VT references ?

Suggesting that your nephew should make his own decisions ?

That it isn’t GM finance’s obligation to tell him he could spend his money on something perhaps more worthwhile ?

Edited by anonymous-user on Thursday 17th January 12:49

[Gordon_Roslin]

Deep Thought said:

.... on the basis that only a small minority will buy a car and run it for > 4 years anyway.

Most people run a car for north of four years. Apart from the PCP buying brigade. It's like people never used to need a mobile phone, now they're changing them ever year!!

[TheStigsWeeBrother]

Deep Thought said:

TheStigsWeeBrother said:

Butter Face said:

Just thought I'd illustrate something on this too:

Here's a illustrative quote on a £9995 car with a £500 deposit on 48m PCP, 48m HP and 60m HP (48m PCP and 60m HP to get similar payment, all at 6.9% APR.

48m PCP - 48x £188.37 + OFP of £2297.13 - Total interest: £1650.89 - Total payable £11646.89
48m HP - 47x £227.25 + 1x £228.25 - Total interest: £1413 - Total payable £11409
60m HP - 59x £187.66 + 1x £188.66 -Total interest: £1764.60 - - Total payable £11760.60

Now which is the best deal? Depends on if you want to pay £40pm more and own the car after 4 years, or pay the lower amount over 4 years and change it, or pay the lower monthly amount over 5 years and own it.

All within £350 range of interest charges.

Looking at the 3 examples and if the OFP is a true reflection for what the car will be worth then for less than £40pm I would go for option 2 and have equity of £2.3k as opposed to finding £2.3k to own it.

And thats the correct answer for your circumstances, but does that make someone who choses A or C "wrong"? They might just have a different but perfectly valid perspective than you

They say there is no right or wrong answer but what if there wrong?

[anonymous-user]

TheStigsWeeBrother said:

They say there is no right or wrong answer but what if there wrong?

Deliberately ironic ?

[anonymous-user]

Butter Face said:

Bob-2146 said:

"consider every method of purchasing" ; good financial advice would be to rule out these overpriced 'traps' across the board.

Just thought I'd illustrate something on this too:

Here's a illustrative quote on a £9995 car with a £500 deposit on 48m PCP, 48m HP and 60m HP (48m PCP and 60m HP to get similar payment, all at 6.9% APR.

48m PCP - 48x £188.37 + OFP of £2297.13 - Total interest: £1650.89 - Total payable £11646.89
48m HP - 47x £227.25 + 1x £228.25 - Total interest: £1413 - Total payable £11409
60m HP - 59x £187.66 + 1x £188.66 -Total interest: £1764.60 - - Total payable £11760.60

Now which is the best deal? Depends on if you want to pay £40pm more and own the car after 4 years, or pay the lower amount over 4 years and change it, or pay the lower monthly amount over 5 years and own it.

All within £350 range of interest charges.

Or get an Asda loan for £10k at 2.8% over 48 months and pay £220.30 a month for a total of £10574.40. Total Interest £574.40. The added advantage is you don't have a mileage restriction.

Also I think your maths on the PC may be slightly off? 48 X £188.37 + £500 Deposit + £2297.13 OFP = £11838.89 - Total Interest £1838.89
Or is the Deposit a Manufacturer provided deposit?

Either way, I think this proves that people only look at the monthly payments and not the total amount to pay. This implies that a car is a monthly amount, like a mobile phone contract which you will always be paying.

Actually this reminds me of a recent visit to Mercedes World where I had a look around the showroom at the end. Every salesman was at his desk with a customer and all I could hear as I walked around was "That is £XXX a month", so clearly nobody really cares about the actual list price.

[Butter Face]

Joey Deacon said:

Or get an Asda loan for £10k at 2.8% over 48 months and pay £220.30 a month for a total of £10574.40. Total Interest £574.40. The added advantage is you don't have a mileage restriction.

Also I think your maths on the PC may be slightly off? 48 X £188.37 + £500 Deposit + £2297.13 OFP = £11838.89 - Total Interest £1838.89
Or is the Deposit a Manufacturer provided deposit?

Apologies, payment is £184.37 not £188.37, obviously some people do look at the monthly figures

And yes, you can go get an ASDA loan at 2.8%, if you get accepted, which lots of people won't be/won't get the lower rate. 6.9% is a decent rate for a secured loan IMO and quite typical of that available on the market. No mileage restriction on the HP product either, and the figures I quoted were at 10k pa which is more than adequate (IMO) for the vast majority of purchasers.

Talking of mileage restrictions, It's quite interesting to play with these.

The quote above is 10k pa, total payable £11646.89.

Do the same car with 20k pa allowance, payment goes up to £192.79 but GFV goes down to £1832.47, total payable £11,586.39

£60 saved over the term even if you don't touch the mileage limit!

[Bob-2146]

Joey Deacon said:

Butter Face said:

Bob-2146 said:

"consider every method of purchasing" ; good financial advice would be to rule out these overpriced 'traps' across the board.

Just thought I'd illustrate something on this too:

Here's a illustrative quote on a £9995 car with a £500 deposit on 48m PCP, 48m HP and 60m HP (48m PCP and 60m HP to get similar payment, all at 6.9% APR.

48m PCP - 48x £188.37 + OFP of £2297.13 - Total interest: £1650.89 - Total payable £11646.89
48m HP - 47x £227.25 + 1x £228.25 - Total interest: £1413 - Total payable £11409
60m HP - 59x £187.66 + 1x £188.66 -Total interest: £1764.60 - - Total payable £11760.60

Now which is the best deal? Depends on if you want to pay £40pm more and own the car after 4 years, or pay the lower amount over 4 years and change it, or pay the lower monthly amount over 5 years and own it.

All within £350 range of interest charges.

Or get an Asda loan for £10k at 2.8% over 48 months and pay £220.30 a month for a total of £10574.40. Total Interest £574.40. The added advantage is you don't have a mileage restriction.

Also I think your maths on the PC may be slightly off? 48 X £188.37 + £500 Deposit + £2297.13 OFP = £11838.89 - Total Interest £1838.89
Or is the Deposit a Manufacturer provided deposit?

Either way, I think this proves that people only look at the monthly payments and not the total amount to pay. This implies that a car is a monthly amount, like a mobile phone contract which you will always be paying.

Actually this reminds me of a recent visit to Mercedes World where I had a look around the showroom at the end. Every salesman was at his desk with a customer and all I could hear as I walked around was "That is £XXX a month", so clearly nobody really cares about the actual list price.

Or one cash payment of £9995, total payable £9995 ? Save £1400 - £1800 in interest ? Clearly "saving up" or buying something cheaper (£5k used?) has gone out of fashion. I agree the loan makes more sense, if your credit is so bad you can't get a 2.8% loan in these low interest times you probably shouldn't be taking out finance at all.

My view is that not all finance is bad. 0% PCP is probably priced to cover the interest; and I remember 50:50 deals on the Jags back in the day, 50% now and 50% in two years interest free to clear the balance. But the current crop of PCP finance interest deals are generally horrible, as is the blatent misquoting of a discount as a "deposit contribution". Why not offer that same "contribution" discount for cash- if PCP is not crack cocaine why the popular policy to only offer the inducement for finance ? Of course they know what they are doing, Admiral Ackbar was right, once you're on the treadmill beware, there's no escape.

[anonymous-user]

Bob-2146 said:

Or one cash payment of £9995, total payable £9995 ? Save £1400 - £1800 in interest ? Clearly "saving up" or buying something cheaper (£5k used?) has gone out of fashion. I agree the loan makes more sense, if your credit is so bad you can't get a 2.8% loan in these low interest times you probably shouldn't be taking out finance at all.

My view is that not all finance is bad. 0% PCP is probably priced to cover the interest; and I remember 50:50 deals on the Jags back in the day, 50% now and 50% in two years interest free to clear the balance. But the current crop of PCP finance interest deals are generally horrible, as is the blatent misquoting of a discount as a "deposit contribution". Why not offer that same "contribution" discount for cash- if PCP is not crack cocaine why the popular policy to only offer the inducement for finance ? Of course they know what they are doing, Admiral Ackbar was right, once you're on the treadmill beware, there's no escape.

Two things:

1 - of course you can get off the treadmill, many many people do

2 - why does it bother you so much ?

[jimPH]

Brooking10 said:

Bob-2146 said:

Or one cash payment of £9995, total payable £9995 ? Save £1400 - £1800 in interest ? Clearly "saving up" or buying something cheaper (£5k used?) has gone out of fashion. I agree the loan makes more sense, if your credit is so bad you can't get a 2.8% loan in these low interest times you probably shouldn't be taking out finance at all.

My view is that not all finance is bad. 0% PCP is probably priced to cover the interest; and I remember 50:50 deals on the Jags back in the day, 50% now and 50% in two years interest free to clear the balance. But the current crop of PCP finance interest deals are generally horrible, as is the blatent misquoting of a discount as a "deposit contribution". Why not offer that same "contribution" discount for cash- if PCP is not crack cocaine why the popular policy to only offer the inducement for finance ? Of course they know what they are doing, Admiral Ackbar was right, once you're on the treadmill beware, there's no escape.

Two things:

1 - of course you can get off the treadmill, many many people do

2 - why does it bother you so much ?

Why do you keep asking about part 2? Why does it bother you that it bothers others. I can't see it bothering anyone, much the same way that people's preference for sado masochism doesn't bother me either, or anyone else. It's just a discussion on the subject.


Look at it this way, if no one bothered to type a differing opinion, you'd have nothing better to do all day.

[anonymous-user]

Bob-2146 said:

Or one cash payment of £9995, total payable £9995 ? Save £1400 - £1800 in interest ? Clearly "saving up" or buying something cheaper (£5k used?) has gone out of fashion. I agree the loan makes more sense, if your credit is so bad you can't get a 2.8% loan in these low interest times you probably shouldn't be taking out finance at all.

My view is that not all finance is bad. 0% PCP is probably priced to cover the interest; and I remember 50:50 deals on the Jags back in the day, 50% now and 50% in two years interest free to clear the balance. But the current crop of PCP finance interest deals are generally horrible, as is the blatent misquoting of a discount as a "deposit contribution". Why not offer that same "contribution" discount for cash- if PCP is not crack cocaine why the popular policy to only offer the inducement for finance ? Of course they know what they are doing, Admiral Ackbar was right, once you're on the treadmill beware, there's no escape.

You are preaching to the converted here, I totally agree with you. I think the problem is that signing up to a PCP isn't real money for most people it is just signing a piece of paper. If you gave them £10k in £10 notes in a carrier bag instead to hand over I wonder how many could actually still do it?

If you had £10k in a Marcus account at 1.5 over 48 months you would have £10,617.97 after 4 years

If you borrow £10k from Asda at 2.8% over 48 months you pay back a total of £10,574.40 after 4 years

So given this example would it not be better to get the car on finance and keep the cash in the bank for a rainy day?

[Butter Face]

Bob-2146 said:

Or one cash payment of £9995, total payable £9995 ? Save £1400 - £1800 in interest ? Clearly "saving up" or buying something cheaper (£5k used?) has gone out of fashion. I agree the loan makes more sense, if your credit is so bad you can't get a 2.8% loan in these low interest times you probably shouldn't be taking out finance at all.

My view is that not all finance is bad. 0% PCP is probably priced to cover the interest; and I remember 50:50 deals on the Jags back in the day, 50% now and 50% in two years interest free to clear the balance. But the current crop of PCP finance interest deals are generally horrible, as is the blatent misquoting of a discount as a "deposit contribution". Why not offer that same "contribution" discount for cash- if PCP is not crack cocaine why the popular policy to only offer the inducement for finance ? Of course they know what they are doing, Admiral Ackbar was right, once you're on the treadmill beware, there's no escape.

Bob, I'll try not to dissect your post too much for sake of being called out as a cliche again.

Not very many people have £10k lying around, it's the truth, life has moved on since the days of the mid century where you didn't buy it if you didn't have the cash, in case you haven't noticed, an awful lost has happened in the last 50 or so years with the world/technology etc etc etc.

Around 51% of applicants get the low rate, so half, saying absurd things like 'if your credit is so bad you can't get a 2.8% loan in these low interest times you probably shouldn't be taking out finance at all' is just silly Bob, you get that right?

'But the current crop of PCP finance interest deals are generally horrible' - examples please, otherwise I'll assume it's just more hyperbole.

'as is the blatent misquoting of a discount as a "deposit contribution". Why not offer that same "contribution" discount for cash- if PCP is not crack cocaine why the popular policy to only offer the inducement for finance ?' - You can get cash discount from any dealer anywhere in the country, of course it is in our interest (fnarrrrr) for the customer to take finance, but you will get discount with your own money. you just have to ask, or go to Carwow if you're so inclined.

[anonymous-user]

jimPH said:

Brooking10 said:

Bob-2146 said:

Or one cash payment of £9995, total payable £9995 ? Save £1400 - £1800 in interest ? Clearly "saving up" or buying something cheaper (£5k used?) has gone out of fashion. I agree the loan makes more sense, if your credit is so bad you can't get a 2.8% loan in these low interest times you probably shouldn't be taking out finance at all.

My view is that not all finance is bad. 0% PCP is probably priced to cover the interest; and I remember 50:50 deals on the Jags back in the day, 50% now and 50% in two years interest free to clear the balance. But the current crop of PCP finance interest deals are generally horrible, as is the blatent misquoting of a discount as a "deposit contribution". Why not offer that same "contribution" discount for cash- if PCP is not crack cocaine why the popular policy to only offer the inducement for finance ? Of course they know what they are doing, Admiral Ackbar was right, once you're on the treadmill beware, there's no escape.

Two things:

1 - of course you can get off the treadmill, many many people do

2 - why does it bother you so much ?

Why do you keep asking about part 2? Why does it bother you that it bothers others. I can't see it bothering anyone, much the same way that people's preference for sado masochism doesn't bother me either, or anyone else. It's just a discussion on the subject.


Look at it this way, if no one bothered to type a differing opinion, you'd have nothing better to do all day.

Because I am genuinely interested.

That’s how discussions work.

You say you can’t see it bothering anyone and yet this and other threads are littered with dismissive references to people who use these products and the cars they buy. In addition though there is what seem like a genuinely held belief that there is an issue with wider impacts for society underlying PCP.

The first is idiots doing what idiots do but is that latter point not an interesting one ?

I won’t lie I am really intrigued about the underlying psychology of why some people can become so vitriolic about their fellow man’s choice of car and purchasing method.

Edited to add - it’s more interesting yet that some people would sign up to join this forum and post almost exclusively on car finance topics.

Edited by anonymous-user on Thursday 17th January 15:45

[kieranblenk]

I have a low interest PCP which with deposit contributions resulted in over £3000 cheaper than if I walked in and paid cash. I'd planned on buying with a loan but the finance is lower interest than most loans (1.9%) so I felt was a fair deal.

I used the cash surplus I had to buy my first house (I'm 22). I have no regrets, I could have bought a shed for £500 but I know that my Fabia is under warranty and hasn't cost me a penny (I got a service plan thrown in) in almost 20000 miles other than fuel. I also know that when I turn the key it will start, which considering there's no public transport to my work without taking about 4 buses is a big bonus. It works for me and I know I'll make more money on the house than I would if I bought a car outright.

[Sheepshanks]

Bob-2146 said:

But the current crop of PCP finance interest deals are generally horrible, as is the blatent misquoting of a discount as a "deposit contribution". Why not offer that same "contribution" discount for cash- if PCP is not crack cocaine why the popular policy to only offer the inducement for finance ?

I always thought it was illegal to offer different prices for cash and credit - yet the car industry car industry gets away with disguising discounts as deposit contributions.

Having said that, on a SEAT we recently bought we could either have a 0% PCP or a (further) £1500 discount for cash. Not seen that before.

[Lexington59]

kieranblenk said:

I have a low interest PCP which with deposit contributions resulted in over £3000 cheaper than if I walked in and paid cash. I'd planned on buying with a loan but the finance is lower interest than most loans (1.9%) so I felt was a fair deal.

I used the cash surplus I had to buy my first house (I'm 22). I have no regrets, I could have bought a shed for £500 but I know that my Fabia is under warranty and hasn't cost me a penny (I got a service plan thrown in) in almost 20000 miles other than fuel. I also know that when I turn the key it will start, which considering there's no public transport to my work without taking about 4 buses is a big bonus. It works for me and I know I'll make more money on the house than I would if I bought a car outright.

Watch out though, these car finance deals will show up on a mortgage application.

[Lexington59]

Brooking10 said:

Because I am genuinely interested.

That’s how discussions work.

I won’t lie I am really intrigued about the underlying psychology of why some people can become so vitriolic about their fellow man’s choice of car and purchasing method.

There sure are a lot of PCP discussions on this forum. I'm intrigued as to what the attraction is in having the same discussion on a loop each week with pretty much the same people, as (mostly) seems to be the case here.

I suppose it's a bit like being in a familiar environment e.g. at the bar in Cheers but with duller, finance based, yet more animated discussions.

[TheStigsWeeBrother]

Lexington59 said:

There sure are a lot of PCP discussions on this forum. I'm intrigued as to what the attraction is in having the same discussion on a loop each week with pretty much the same people, as (mostly) seems to be the case here.

I suppose it's a bit like being in a familiar environment e.g. at the bar in Cheers but with duller, finance based, yet more animated discussions.

Yep,2 posters contributing over 25% of the posts.

[anonymous-user]

Lexington59 said:

There sure are a lot of PCP discussions on this forum. I'm intrigued as to what the attraction is in having the same discussion on a loop each week with pretty much the same people, as (mostly) seems to be the case here.

I suppose it's a bit like being in a familiar environment e.g. at the bar in Cheers but with duller, finance based, yet more animated discussions.

I think that’s a fair analogy !

[roadsmash]

Joey Deacon said:

If you had £10k in a Marcus account at 1.5 over 48 months you would have £10,617.97 after 4 years

If you borrow £10k from Asda at 2.8% over 48 months you pay back a total of £10,574.40 after 4 years

So given this example would it not be better to get the car on finance and keep the cash in the bank for a rainy day?

Gordon? Jim? Where are you?

Would you argue against this totally reasonable decision?