Discussion
996 is on pcp, buy price was 42k, deposit 8k, £450 a month for 48months, £20K final!
by way of reference (i am not being derisory!) my griff was 38K, deposit 8k, £614 per month for 48 months, £17.5K final
The 996 is cheap in comparison due to the in house, low finance rates pgb offer and the residual values they can guarantee.
Bennno
by way of reference (i am not being derisory!) my griff was 38K, deposit 8k, £614 per month for 48 months, £17.5K final
The 996 is cheap in comparison due to the in house, low finance rates pgb offer and the residual values they can guarantee.
Bennno
Cheers bennno. Interesting figures. I'd always been a loan/cash car purchaser, but buying older supercars has meant that maintenance bills for clutches, brakes, suspension components and engine fettling has sometimes cost me as much as 6k a year on top anyway. It's just I always convince myself it won't!!!
Do you ever plan on paying off the balloon, or will you just give 'em the keys and maybe get something else? Suppose it depends on book price at the time.
Cheers
Domster
Do you ever plan on paying off the balloon, or will you just give 'em the keys and maybe get something else? Suppose it depends on book price at the time.
Cheers
Domster
quote:
In truth the Porsche is an extravagance but as i can also use it every day (as it needs no trips to the dealer for remedial work) it seems to make sense!
Bennno
Careful Bennno you have been banned for 24 hours for making less inflamatory statements
Edited by marki on Friday 25th January 10:26
Mr Tony, PCP stands for Personal Contract Purchase (or Plan, in some finance dictionaries). It is a way that anyone can buy a car - privately or through a company - using finance facilities provided by the car manufacturer, dealer or a third party finance house.
Ford were the first to make it really popular, and they called it 'Options'.
PCPs are popular because you only finance 'half' the car... so your monthly payments are lower. Say bennno's 996 would cost you a nasty 1k a month over 48 months on a normal loan, PCP lets bennno have it for 400 GBP... Much nicer monthly cashflow.
The way it works is that you:
1) Pay a deposit (can be as low as a grand!)
2) Pay smaller monthly payments for between 1 and 4 years (usually)
3) Pay a lump sum at the end of the loan period to own the car. This is called the 'balloon' payment and is like some kind of 'final deposit'.
So you are only financing 20k, not 40k over 4 years, in Bennno's case - and in theory your monthly interest payments can be less, as there is less to finance.
However, what if you can't pay the 20k bill in 2006, to own the car outright?
This is where Options came in. Basically, if you can't pay the balloon, you give them the car back. The loan company are happy, because the car should always be worth a little more than the end balloon payment, so they're quids in. And you've had cheap 911 car hire for four years.
Another option that Ford did, was that you could start another PCP with them on another car - start from scratch, in effect - thus locking you in as a loyal customer. This only worked on PCPs with small deposits, say 1 grand, as to keep you keen Ford would waive any downpayment or deposit, and just keep the payments going at a new rate, depending on what you're chopping the car in for.
Anyway, cars with good depreciation characteristics are suited to PCPs, as the balloon can be set quite high, so the amount financed is less.
In theory, if you could get a 'zero' depreciation supercar like an F40, there would be little to finance over four years apart from depreciation caused by use/wear and tear. The monthly figures would be dead low, although they'd still want a massive deposit to show that you were serious about it.
Sadly, I have yet to find a finance company who'll make the figures a reality!!!
Rgds
Domster
Edited by domster on Friday 25th January 10:57
Ford were the first to make it really popular, and they called it 'Options'.
PCPs are popular because you only finance 'half' the car... so your monthly payments are lower. Say bennno's 996 would cost you a nasty 1k a month over 48 months on a normal loan, PCP lets bennno have it for 400 GBP... Much nicer monthly cashflow.
The way it works is that you:
1) Pay a deposit (can be as low as a grand!)
2) Pay smaller monthly payments for between 1 and 4 years (usually)
3) Pay a lump sum at the end of the loan period to own the car. This is called the 'balloon' payment and is like some kind of 'final deposit'.
So you are only financing 20k, not 40k over 4 years, in Bennno's case - and in theory your monthly interest payments can be less, as there is less to finance.
However, what if you can't pay the 20k bill in 2006, to own the car outright?
This is where Options came in. Basically, if you can't pay the balloon, you give them the car back. The loan company are happy, because the car should always be worth a little more than the end balloon payment, so they're quids in. And you've had cheap 911 car hire for four years.
Another option that Ford did, was that you could start another PCP with them on another car - start from scratch, in effect - thus locking you in as a loyal customer. This only worked on PCPs with small deposits, say 1 grand, as to keep you keen Ford would waive any downpayment or deposit, and just keep the payments going at a new rate, depending on what you're chopping the car in for.
Anyway, cars with good depreciation characteristics are suited to PCPs, as the balloon can be set quite high, so the amount financed is less.
In theory, if you could get a 'zero' depreciation supercar like an F40, there would be little to finance over four years apart from depreciation caused by use/wear and tear. The monthly figures would be dead low, although they'd still want a massive deposit to show that you were serious about it.
Sadly, I have yet to find a finance company who'll make the figures a reality!!!
Rgds
Domster
Edited by domster on Friday 25th January 10:57
Oh right. I didn't know it was called that. So basically as long as I pick a car (e.g. porsche) with solid residuals then I'm on to a winner effectively.
Looked at doing the same with a cerb recently, but they set the balloon at 10k, on a 30k car over 3 years. A porsche with a 20k balloon on a 40k car over 4 sounds better fincancially. So either in 4 years time i decide to keep it and re-mortgage/get a loan for the remaining 20k/cash in some shares etc etc etc....
Can't actually see the catch, as long as their interest rate is reasonable (benno - was it much greater than the average 8.5/9.0% high street loan price?)
Edited by mr_tony on Friday 25th January 11:03
Looked at doing the same with a cerb recently, but they set the balloon at 10k, on a 30k car over 3 years. A porsche with a 20k balloon on a 40k car over 4 sounds better fincancially. So either in 4 years time i decide to keep it and re-mortgage/get a loan for the remaining 20k/cash in some shares etc etc etc....
Can't actually see the catch, as long as their interest rate is reasonable (benno - was it much greater than the average 8.5/9.0% high street loan price?)
Edited by mr_tony on Friday 25th January 11:03
I have done some work for Mercedes Benz finance, and I think I should tell you that their beady eyes lit up like Christmas trees at the thought of punters going for PCPs.
That is a warning, by the way!
You'll find that the cheapest method of buying a car is always with ready cash, the second cheapest a re-mortgage loan, the third cheapest a good bank loan. PCPs come in at around No. 234 ;-)
The interest rates are always somewhat higher than competitive high street rates, or even straight forward Hire Purchase, as the PCP finance people know that punters are attracted to the low monthly payments like flies around horseshit. They know that they can get another per cent or so out of the punter without a squeek, as the monthly figure will seem much lower than alternatives anyway.
PCPs make sense for bennno because:
1) the 996 has great residuals
2) it shouldn't go wrong
3) it is very cheap to service - much less than older 911s
4) Porsche GB seem to have quite good finance rates
Rgds
Domster
That is a warning, by the way!
You'll find that the cheapest method of buying a car is always with ready cash, the second cheapest a re-mortgage loan, the third cheapest a good bank loan. PCPs come in at around No. 234 ;-)
The interest rates are always somewhat higher than competitive high street rates, or even straight forward Hire Purchase, as the PCP finance people know that punters are attracted to the low monthly payments like flies around horseshit. They know that they can get another per cent or so out of the punter without a squeek, as the monthly figure will seem much lower than alternatives anyway.
PCPs make sense for bennno because:
1) the 996 has great residuals
2) it shouldn't go wrong
3) it is very cheap to service - much less than older 911s
4) Porsche GB seem to have quite good finance rates
Rgds
Domster
Figured as much, I've always been a cash buyer for that reason, and the plan for the next car was similar.
Sell current car privately for as much as possible, get bank loan at lowest possible apr, take big bag of money to dealer and squeeze them hard.
Personally I don't really like the idea of having a 20k 'balloon' hanging over my head... But if I could see the APR and do some sums as you say it might be justifiable for 4 years spent in a very comfy 911....
Sell current car privately for as much as possible, get bank loan at lowest possible apr, take big bag of money to dealer and squeeze them hard.
Personally I don't really like the idea of having a 20k 'balloon' hanging over my head... But if I could see the APR and do some sums as you say it might be justifiable for 4 years spent in a very comfy 911....
pcp's are normally fairly expensive because you normally have to pay a load of interest on the outstanding balance for the full term. If the car has a good residual though it sometimes makes a comparitively expensive car affordable.
By way of example we were looking at either a new AMG C32 or the 996, 996 came in at £450 whilst the C32 (same price) came it at £780 with MB finance!
That said PGB were doing variable rate + 3.5% so i make that 7.5%ish at the moment, pretty competitive.
If you have the money then for sure it is cheaper to buy outright, or finance the whole thing over the shortest period possible, but on a 40k car you then up with ridiculous repayments.
I heard the mortgage idea before, but have always felt this is at least 6.5%ish and you are effectively spreading the loan over 25 years, so the total cost would be massive. Doing some basic maths you could borrow 35K on your morgage for £215-£232 per month, but then thats an astronomical £64-69K for the privelidge (or far worse than the 5K ish interest i will pay over 4 years)
phew...
(bank loan is a good idea but I was led to believe its 15,20 or perhaps 25k tops unsecured for those of us non titled, commoners)
Ben
Edited by bennno on Friday 25th January 14:37
"By way of example we were looking at either a new AMG C32 or the 996, 996 came in at £450 whilst the C32 (same price) came it at £780 with MB finance!"
No wonder the buggers at MB Finance used to grin like a w--nking J-p when they were working out the PCP deals!!!
(No offence to w--king J-ps intended).
PS - bennno - the best way would be to remortgage and then pay that part of your home loan back early, say over four or five years... of course, if you're only saving 1% it may not be worth the hassle. Sounds like a top deal from the boys at Porsche. You've got me thinking you bastard ;-)
Edited by domster on Friday 25th January 15:38
I was trying to guess the blanks are they..
-an----- -a-
I guess if you have a flexi mortage that is the best way, i dont trust myself on that front so went for a 25 year cap at 6.25%, hedging my bets or what!
No you can have variable rate on a private pcp, you pay less interest and if you want to settle after 6 months there are no charges unlike a fixed rate pcp!! you can get this on a TVr as well if desired and is normally cheaper, but slightly risky if the rates go up.
There are some pro's and cons so talk in a bit more detail to somebody in a position of knowledge.
Bennno
Edited by bennno on Friday 25th January 15:52
Edited by bennno on Friday 25th January 15:56
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