Questions on taking on a GT4 using PCP.
Discussion
Porsche911R said:
my other mate, wanted out his car early, he was in with a £6k deposit and 1/2 way though his term at £320 a month, people say you can get out early !!!!
he was £2.2k in neg equity on the car, so the £6k deposit was gone his 18months of payments were gone and he owed £2.2k !!!
£14k to run a Audi TT for 18 months !!
pro PCP people on here are deluded.
No. Pro PCP people are not deluded. As long as they understand the maths, the affordability, the flexibility and whether that cost is worth it to them.he was £2.2k in neg equity on the car, so the £6k deposit was gone his 18months of payments were gone and he owed £2.2k !!!
£14k to run a Audi TT for 18 months !!
pro PCP people on here are deluded.
Very happy with every PCP that I have taken out, at the end of which I have always paid the balloon and kept the car. In every case, investments have made more money than the interest paid out. However, that was not a factor in my decision making in any of the purchases, as it cannot be guaranteed.
I see two primary advantages to PCP - keeping money free for investment/savings and keeping monthly outgoings low (vs.HP) in case of a change in circumstances.
Your mate's example is a crazy use of PCP. Only he knows why he made such a poor (on the face of it) decision. The gap between money paid and car value is highest in the early period of the PCP. 18 months into a 36/48 month PCP is a very costly time to bail out and that is known when you sign up for the PCP. If you have done your homework.
Buying a car new and selling at 18 months is a recipe for large per-month losses however you fund it. Cars that have a slow initial depreciation curve are vanishingly few and far between.
My two most recent PCP examples:
My wife's car is sat on the drive now. £22k list. £17k negotiated price. Bought on PCP with minimum deposit. 0% APR. You'd have to do pretty badly to make less than 0% on your savings. £7k balloon paid after 36 months. Amazingly, it's still worth over £8k now as a trade-in at 4.5 years old. Hard to make a case for a cheaper way to buy that car than PCP.
My car is 18 months old and in the negative equity stage (25% discount, high deposit, low monthlies, 3.9% APR, will be bought out in 18 months.
There are other financial products at the OPC if you have a bigger 'deposit'. I saw a car I wanted last year, but could not get a good trade-in for my existing car (non-Porsche). So I financed that 'gap' which was about 40% of the cost of the car. It wasn't a PCP - I was simply paying interest-only on the amount I had financed. It gave me time to get a better price for mine and I got contributions for taking finance too.
If I had been stuck with that car then I would have been considering bank loans to pay off chunks of the OPC loan as the bank rates are better.
As others have said, it is about being very clear how much it is going to cost (total cost to pay) and in particular how much interest you will pay.
If I had been stuck with that car then I would have been considering bank loans to pay off chunks of the OPC loan as the bank rates are better.
As others have said, it is about being very clear how much it is going to cost (total cost to pay) and in particular how much interest you will pay.
OP, have three years of boredom and you'll have £51k in the bank. Then put that towards whatever you want. I'm assuming you're young? If you are, you'll still want nice cars in the future when you're as old as me (57). My Cayman GTS is finance free. Just some advice from an old fart.
Here's another thought. Don't agree that you should go without anything for 3 years but I do agree you should only buy a GT4 when you can afford one WITHOUT HAVING TO BE F&CKED BY A PCP DEAL.
So....In the short term, why not get into something slightly more affordable + less likely to continue depreciating, e.g. a 981 Cayman GTS. buy private with an inspection so you're not paying the dealer markup and VAT. fund the car with as high a deposit you can afford + a personal loan over the next e.g. 3 years to make up the rest.
In 3 years sell the GTS that you will own outright and then make the jump into a GT4 using the same deposit + personal loan route.
So....In the short term, why not get into something slightly more affordable + less likely to continue depreciating, e.g. a 981 Cayman GTS. buy private with an inspection so you're not paying the dealer markup and VAT. fund the car with as high a deposit you can afford + a personal loan over the next e.g. 3 years to make up the rest.
In 3 years sell the GTS that you will own outright and then make the jump into a GT4 using the same deposit + personal loan route.
n12maser said:
Here's another thought. Don't agree that you should go without anything for 3 years but I do agree you should only buy a GT4 when you can afford one WITHOUT HAVING TO BE F&CKED BY A PCP DEAL.
So....In the short term, why not get into something slightly more affordable + less likely to continue depreciating, e.g. a 981 Cayman GTS. buy private with an inspection so you're not paying the dealer markup and VAT. fund the car with as high a deposit you can afford + a personal loan over the next e.g. 3 years to make up the rest.
In 3 years sell the GTS that you will own outright and then make the jump into a GT4 using the same deposit + personal loan route.
Can we turn down the sensible post button down a few clicks please! So....In the short term, why not get into something slightly more affordable + less likely to continue depreciating, e.g. a 981 Cayman GTS. buy private with an inspection so you're not paying the dealer markup and VAT. fund the car with as high a deposit you can afford + a personal loan over the next e.g. 3 years to make up the rest.
In 3 years sell the GTS that you will own outright and then make the jump into a GT4 using the same deposit + personal loan route.
The only thing bad about that PCP example in my view is the APR
I know they are big sums of money but still seems a high APR.
My BMW pcp meant after 3 years I would have had a small deposit on my next car, instead I paid the GFV bought it, drove it for another year and sold it yesterday for just above last years balloon payment after a day of putting it on autotrader.
There is a bell curve to pcp and the depreciation, 18 months is a bad time to give a car back, youve hammered the depreciation but only paid back a some of the value.
In the example of the TT, assuming GFV was around 50% of the value, your friend bought a £35k audi, new, from an audi dealer, and after 18 months it was worth probably £23k, with your friend having paid £12k in depreciation and £2k in interest (roughly)
seems about fair to me, he may not have understood it etc, and paying a deposit simply reduces your monthlies, it does not help reduce the GFV or anything.
Anyway, think we have probably covered how PCP works. Its not a magic way of buying a car you cant afford, its not the devils work, but its also not any better than a big loan.
I know they are big sums of money but still seems a high APR.
My BMW pcp meant after 3 years I would have had a small deposit on my next car, instead I paid the GFV bought it, drove it for another year and sold it yesterday for just above last years balloon payment after a day of putting it on autotrader.
There is a bell curve to pcp and the depreciation, 18 months is a bad time to give a car back, youve hammered the depreciation but only paid back a some of the value.
In the example of the TT, assuming GFV was around 50% of the value, your friend bought a £35k audi, new, from an audi dealer, and after 18 months it was worth probably £23k, with your friend having paid £12k in depreciation and £2k in interest (roughly)
seems about fair to me, he may not have understood it etc, and paying a deposit simply reduces your monthlies, it does not help reduce the GFV or anything.
Anyway, think we have probably covered how PCP works. Its not a magic way of buying a car you cant afford, its not the devils work, but its also not any better than a big loan.
m.barnes said:
The only thing bad about that PCP example in my view is the APR
I know they are big sums of money but still seems a high APR.
My BMW pcp meant after 3 years I would have had a small deposit on my next car, instead I paid the GFV bought it, drove it for another year and sold it yesterday for just above last years balloon payment after a day of putting it on autotrader.
There is a bell curve to pcp and the depreciation, 18 months is a bad time to give a car back, youve hammered the depreciation but only paid back a some of the value.
In the example of the TT, assuming GFV was around 50% of the value, your friend bought a £35k audi, new, from an audi dealer, and after 18 months it was worth probably £23k, with your friend having paid £12k in depreciation and £2k in interest (roughly)
seems about fair to me, he may not have understood it etc, and paying a deposit simply reduces your monthlies, it does not help reduce the GFV or anything.
Anyway, think we have probably covered how PCP works. Its not a magic way of buying a car you cant afford, its not the devils work, but its also not any better than a big loan.
Sorry, but it is a EXACTLY a "way of buying a car you can't afford to own".I know they are big sums of money but still seems a high APR.
My BMW pcp meant after 3 years I would have had a small deposit on my next car, instead I paid the GFV bought it, drove it for another year and sold it yesterday for just above last years balloon payment after a day of putting it on autotrader.
There is a bell curve to pcp and the depreciation, 18 months is a bad time to give a car back, youve hammered the depreciation but only paid back a some of the value.
In the example of the TT, assuming GFV was around 50% of the value, your friend bought a £35k audi, new, from an audi dealer, and after 18 months it was worth probably £23k, with your friend having paid £12k in depreciation and £2k in interest (roughly)
seems about fair to me, he may not have understood it etc, and paying a deposit simply reduces your monthlies, it does not help reduce the GFV or anything.
Anyway, think we have probably covered how PCP works. Its not a magic way of buying a car you cant afford, its not the devils work, but its also not any better than a big loan.
For some people!
n12maser said:
Here's another thought. Don't agree that you should go without anything for 3 years but I do agree you should only buy a GT4 when you can afford one WITHOUT HAVING TO BE F&CKED BY A PCP DEAL.
So....In the short term, why not get into something slightly more affordable + less likely to continue depreciating, e.g. a 981 Cayman GTS. buy private with an inspection so you're not paying the dealer markup and VAT. fund the car with as high a deposit you can afford + a personal loan over the next e.g. 3 years to make up the rest.
In 3 years sell the GTS that you will own outright and then make the jump into a GT4 using the same deposit + personal loan route.
Hi maser.So....In the short term, why not get into something slightly more affordable + less likely to continue depreciating, e.g. a 981 Cayman GTS. buy private with an inspection so you're not paying the dealer markup and VAT. fund the car with as high a deposit you can afford + a personal loan over the next e.g. 3 years to make up the rest.
In 3 years sell the GTS that you will own outright and then make the jump into a GT4 using the same deposit + personal loan route.
Thanks for your suggestion, it’s one I have been looking at myself. Im not transfixed on the GT4 pcp Avenue by any means. I’m considering all avenues. GTS seem to go for about 55-60 for a 2015. Would you say in 3 years expecting a 2015 GTS to be 35k to be a sensible assumption?
I’m not for the minute hanging up on residuals (you can see from my OP Im firmly in the cars are to be driven, the value drops approach
) just it’s part and parcel of running ideas around.Thanks
Granfondo said:
Sorry, but it is a EXACTLY a "way of buying a car you can't afford to own".
For some people!
I dont know enough to disagree, but would have thought anyone getting a 3 year loan for X amount a month could get a 6 year loan for the same monthlies. For some people!
Cant say I have tried but with rates this low why would you pay cash. I would rather have my cash earning 7-10% per annum, compounded, from an S&P500 fund, or more from individual shares, while I borrowed someone elses money for 3-5% (not porsches at 9% or whatever it is) but everyone is different.
Cant take it with you either way I guess.
m.barnes said:
I dont know enough to disagree, but would have thought anyone getting a 3 year loan for X amount a month could get a 6 year loan for the same monthlies.
Cant say I have tried but with rates this low why would you pay cash. I would rather have my cash earning 7-10% per annum, compounded, from an S&P500 fund, or more from individual shares, while I borrowed someone elses money for 3-5% (not porsches at 9% or whatever it is) but everyone is different.
Cant take it with you either way I guess.
Got any tips to make £10k from £50k because that’s what a PCP will cost you.Cant say I have tried but with rates this low why would you pay cash. I would rather have my cash earning 7-10% per annum, compounded, from an S&P500 fund, or more from individual shares, while I borrowed someone elses money for 3-5% (not porsches at 9% or whatever it is) but everyone is different.
Cant take it with you either way I guess.
People do love to quote how well their investments are doing, but I took out a S&S isa last year and I am £40 down, not a lot to loose but I have not made 10% , so I am better off buying cash over investing. A few years back the markets were booming and people were making 15 or even 20%, times seem harder to make that atm, so it's easier to save £10k interest than to make £10k investing £50k, it's 100% risk free way.
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