Bikes bought on PCP?
Discussion
MCN had a big article on this last week and i had a good old look through the cost of buying bikes from small commuters to £35,000 beasts. Has anyone here got a bike being paid for this way and are you happy with how the plan is going?
To me it's an incredibly expensive way 'not' to buy a bike! The restrictions on mileage and required condition on hand back seem harsh and unless you're a once/twice a week rider the mileage allowances are pretty poor. It also seems that after the 3 years you are tied to, the bike may not even be worth what you still owe, that seems madness.
So are there any fans of the scheme here and if so i'd love to know what it is you like about it. I'd get a 2% interest bank loan all day long if i were buying without cash. I'm getting the new 1200 Speed triple soon, which i have saved up for but would definitely go to the bank rather than do a PCP.
To me it's an incredibly expensive way 'not' to buy a bike! The restrictions on mileage and required condition on hand back seem harsh and unless you're a once/twice a week rider the mileage allowances are pretty poor. It also seems that after the 3 years you are tied to, the bike may not even be worth what you still owe, that seems madness.
So are there any fans of the scheme here and if so i'd love to know what it is you like about it. I'd get a 2% interest bank loan all day long if i were buying without cash. I'm getting the new 1200 Speed triple soon, which i have saved up for but would definitely go to the bank rather than do a PCP.
PCP works for a lot of people, myself included, the MCN 'deals' always have ridiculous deposits, my latest one for example cost me £500 down and £130/month over 3 years. I can do 5k a year (which I very rarely do) and have a brand new bike under warranty for the duration of that time which will need a set of tyres and a couple of services.
If I'd bought the bike on HP it would have cost me £299 a month and after 3 years would have been worth 60% of its new price, so the figures are similar and I'll I'm doing is 'renting' the bike by paying the depreciation, £130 a month is a lot easier to find than £299, and I don't care about 'owning' the bike as I can get another new one after 30 months or so, its also not my problem if the bike isn't worth what I 'owe' at the end of the term as that is what GFV's are for.
If I was doing 15/20/30k a year and commuting on a bike I would buy one outright, but I'm not and just ride for fun when the sun is shining, so I can have a nice new bike in the garage for less than a smoker or drinker spends a month on their habit.
Makes perfect sense to me, although paying out the monthlies when the bike sits in the garage for 5/6 months over winter is annoying and I reckon I'll probably get off the PCP wagon at some point.
If I'd bought the bike on HP it would have cost me £299 a month and after 3 years would have been worth 60% of its new price, so the figures are similar and I'll I'm doing is 'renting' the bike by paying the depreciation, £130 a month is a lot easier to find than £299, and I don't care about 'owning' the bike as I can get another new one after 30 months or so, its also not my problem if the bike isn't worth what I 'owe' at the end of the term as that is what GFV's are for.
If I was doing 15/20/30k a year and commuting on a bike I would buy one outright, but I'm not and just ride for fun when the sun is shining, so I can have a nice new bike in the garage for less than a smoker or drinker spends a month on their habit.
Makes perfect sense to me, although paying out the monthlies when the bike sits in the garage for 5/6 months over winter is annoying and I reckon I'll probably get off the PCP wagon at some point.
Edited by Jazoli on Wednesday 24th February 07:15
Jazoli said:
PCP works for a lot of people, myself included, the MCN 'deals' always have ridiculous deposits, my latest one for example cost me £500 down and £130/month over 3 years. I can do 5k a year (which I very rarely do) and have a brand new bike under warranty for the duration of that time which will need a set of tyres and a couple of services.
If I'd bought the bike on HP it would have cost me £299 a month and after 3 years would have been worth 60% of its new price, so the figures are similar and I'll I'm doing is 'renting' the bike by paying the depreciation, £130 a month is a lot easier to find than £299, and I don't care about 'owning' the bike as I can get another new one after 30 months or so.
If I was doing 15/20/30k a year and commuting on a bike I would buy one outright, but I'm not and just ride for fun when the sun is shining, so I can have a nice new bike in the garage for less than a smoker or drinker spends a month on their habit.
Makes perfect sense to me
That's good that it suits you but unless i have done the maths wrong, PCP in every single example i have looked into costs us much more than a very low interest loan. Maybe you got an amazing deal somehow, but i worked out what a local lad is paying for his Suzuki 650 and it seemed an awful lot of actual outlay to rent a bike for 3 years, as you put it. If I'd bought the bike on HP it would have cost me £299 a month and after 3 years would have been worth 60% of its new price, so the figures are similar and I'll I'm doing is 'renting' the bike by paying the depreciation, £130 a month is a lot easier to find than £299, and I don't care about 'owning' the bike as I can get another new one after 30 months or so.
If I was doing 15/20/30k a year and commuting on a bike I would buy one outright, but I'm not and just ride for fun when the sun is shining, so I can have a nice new bike in the garage for less than a smoker or drinker spends a month on their habit.
Makes perfect sense to me
I was tempted by a new Ducati Streetfighter 1103 on PCP, then i did the maths. OMG!
I guess it must suit people if it's popular!
I don’t really care how other people get their latest shiny toy, good luck to them.
It means that for people like me, there are always a nice steady supply of 3 year old, one owner, main dealer serviced (not that really means anything), low mileage, very rarely modified bikes out there.
I couldn’t get a bike knowing it can only do 4k miles a year - sure other limits are allowed... I do between 2-4K a month!
Hence why I have little ‘council’ bikes like my Fazer to do the slog.
I’m glad everyone is different, means we have a lot of bikes at all different levels to play with.
It means that for people like me, there are always a nice steady supply of 3 year old, one owner, main dealer serviced (not that really means anything), low mileage, very rarely modified bikes out there.
I couldn’t get a bike knowing it can only do 4k miles a year - sure other limits are allowed... I do between 2-4K a month!
Hence why I have little ‘council’ bikes like my Fazer to do the slog.
I’m glad everyone is different, means we have a lot of bikes at all different levels to play with.
I don't think you realise that 80% of the population will not get the advertised 'low interest loan' and 'normal' rates are around 6-7%, also you would have to take the loan out over 8 years to get the payments broadly similar, PCP is not the cheapest way but it allows a lot of people onto shiny new machines for a low monthly cost (even though a loan would be cheaper in the long term) and like above creates low mileage 3 year old bikes for other people to buy (which I will end up doing I'd guess)
Edited by Jazoli on Wednesday 24th February 07:34
I agree with you, it does seem like a victim arrangement. I live in Austria, where riding between end October/end February is really neither sensible or done. I was at the BMW shop the other day and a 1250gs is €27k with some extras. €330/month pcp with x down and 8k km/year. The purchase price is one thing but €330/month seemed like a lot considering that it doesn’t include insurance, tax, fuel, tyres. Probably at least €500/month all in plus 4 months of winter.
Considering most of the trips I do are round the mostly local area (up to 100km away) it’s probably better to rent it when you need an ADV bike and have something more nimble.
Considering most of the trips I do are round the mostly local area (up to 100km away) it’s probably better to rent it when you need an ADV bike and have something more nimble.
PCP is great at 0%. Save the balloon money into a regular saver which was paying 6% not so long ago. Then invest in the stock market. The returns from the stock market went some way to paying off the balloon payment. All round winnner.
But if you're paying normal PCP rates, no way. Mugs game.
But if you're paying normal PCP rates, no way. Mugs game.
NS400R said:
PCP is great at 0%. Save the balloon money into a regular saver which was paying 6% not so long ago. Then invest in the stock market. The returns from the stock market went some way to paying off the balloon payment. All round winnner.
But if you're paying normal PCP rates, no way. Mugs game.
6%?! Where?!But if you're paying normal PCP rates, no way. Mugs game.
My current bike is on PCP. Yep, not the cheapest way to get the bike, but for me I'd rather have my capital sitting where it currently is and have the monthly payment just go out as part of my cash flow.
Low deposit and a low APR, money still in the bank and a monthly payment that has little to no impact on cash flow and I plan on keeping the bike 2 - 3 years.
Not sure if I would want to pcp a bike that I couldn't afford to buy outright though, not sure why but it feels a little too much like a debt then.
Each to their own, but I'm comfortable with the arrangement.
Low deposit and a low APR, money still in the bank and a monthly payment that has little to no impact on cash flow and I plan on keeping the bike 2 - 3 years.
Not sure if I would want to pcp a bike that I couldn't afford to buy outright though, not sure why but it feels a little too much like a debt then.
Each to their own, but I'm comfortable with the arrangement.
bulldong said:
I agree with you, it does seem like a victim arrangement. I live in Austria, where riding between end October/end February is really neither sensible or done. I was at the BMW shop the other day and a 1250gs is €27k with some extras. €330/month pcp with x down and 8k km/year. The purchase price is one thing but €330/month seemed like a lot considering that it doesn’t include insurance, tax, fuel, tyres. Probably at least €500/month all in plus 4 months of winter.
Considering most of the trips I do are round the mostly local area (up to 100km away) it’s probably better to rent it when you need an ADV bike and have something more nimble.
27k over 3 years would be about 800 per month on a normal repayment right? Add the 170 per month you estimated for fuel, insurance etc, and you nearly at 1k per month. 500 is looking like a bargain for something that will be worth a lot less in 3 years.Considering most of the trips I do are round the mostly local area (up to 100km away) it’s probably better to rent it when you need an ADV bike and have something more nimble.
Decent deals can balance out great. If it works out you are mostly paying off depreciation there is very little difference doing it either way.
Like all things financial it depends on the deal: the deal on my SV650 wasn't as good as the AT example above, but £60 a month and a modest deposit that was burning a hole in my pocket on my birthday was too hard to resist and it got me back on two wheels again; I know many people who spend more than that on a mobile phone! Thanks to lockdown I will be nowhere near 12k miles come August. I'm still undecided what to do at the end of the PCP, 3k for a three year old SV650 sounds about right and I really like it, but I'd like something more suitable for short two up tours; keeping it to trade it in next spring could be a good move.
PCP works very well for some people. I always put my road bikes on PCP. My first road bike I bought back in 2015 after 10 years off was on HP...I wouldnt do that again
I set the mileage to 6-8k p.a put down minimal deposit and set over 3 years. Typically my bike is about £190 a month, I get it serviced, warranty work done and 2-3 years (typically it has at least 3-6 months still remaining) I'll change for another. It has fair wear and tear and I definitely get my monies worth.
Every time I have equity and buy another in the same way. I've not needed to handback at the end yet as shops always give me good money
My track bike I bought on HP, put down a big deposit did it 0% over a couple years and paid off as I intend to keep it. If they didnt do 0% I would have got a cheap bank loan
Its what you want from the deal at the end of the day. For me PCP works well
I set the mileage to 6-8k p.a put down minimal deposit and set over 3 years. Typically my bike is about £190 a month, I get it serviced, warranty work done and 2-3 years (typically it has at least 3-6 months still remaining) I'll change for another. It has fair wear and tear and I definitely get my monies worth.
Every time I have equity and buy another in the same way. I've not needed to handback at the end yet as shops always give me good money
My track bike I bought on HP, put down a big deposit did it 0% over a couple years and paid off as I intend to keep it. If they didnt do 0% I would have got a cheap bank loan
Its what you want from the deal at the end of the day. For me PCP works well
PCP works for me, bought my Duke like this.
I worked out that the payments cost less than the depreciation of the bike after the PCP period ends by about £500 quid.
If it was a bike that would hold its value over a longer period then I would likely have bought it outright or did a straight finance deal.
I see both sides of the debate, I always look at the longer term cost,most of the time if you can wangle an good PCP deal the payments work out less than the depreciation or about the same, so why not just keep the cash in the bank.
I worked out that the payments cost less than the depreciation of the bike after the PCP period ends by about £500 quid.
If it was a bike that would hold its value over a longer period then I would likely have bought it outright or did a straight finance deal.
I see both sides of the debate, I always look at the longer term cost,most of the time if you can wangle an good PCP deal the payments work out less than the depreciation or about the same, so why not just keep the cash in the bank.
It's a really simple concept to promote "Usership not Ownership"
You agree on the spec and price of the bike.
The finance company then make an offer which you immediately reject as the APR is too high.
You get a better revised offer. You pay the advance rental and deal is done.
At the outset you have already agreed or decided on a term ie 36 months, an annual mileage and this generates a future value from the lender. The GFV is depressed to account for market variations and to hopefully have enough value in the bike to get you out of it and into the next one without adding cash or at least adding very little.
In essence you are simply repaying the depreciation and interest on the net purchase price and Compound interest on the GFV.
It's an easy entry easy exit transaction if it runs to term. Your options are usually. Return it and walk away. Part exchange it. Sell it to a 3rd party and pay the GFV. Or simply pay the GFV and retain the bike.
Upsides are the monthly payments are usually low for the total value of the asset. Even on HP you dont own it until its paid off in full including the agreed small amount to own it at the end.
PCP has a place for sure. Just never accept the first offer and always get a deal with a GFV Guaranteed future value as then the risk of shortfall lies with the lender.
You agree on the spec and price of the bike.
The finance company then make an offer which you immediately reject as the APR is too high.
You get a better revised offer. You pay the advance rental and deal is done.
At the outset you have already agreed or decided on a term ie 36 months, an annual mileage and this generates a future value from the lender. The GFV is depressed to account for market variations and to hopefully have enough value in the bike to get you out of it and into the next one without adding cash or at least adding very little.
In essence you are simply repaying the depreciation and interest on the net purchase price and Compound interest on the GFV.
It's an easy entry easy exit transaction if it runs to term. Your options are usually. Return it and walk away. Part exchange it. Sell it to a 3rd party and pay the GFV. Or simply pay the GFV and retain the bike.
Upsides are the monthly payments are usually low for the total value of the asset. Even on HP you dont own it until its paid off in full including the agreed small amount to own it at the end.
PCP has a place for sure. Just never accept the first offer and always get a deal with a GFV Guaranteed future value as then the risk of shortfall lies with the lender.
Drawweight said:
I’ve never done it myself but it’s a well recognised option in buying a car.
I think the idea is you don’t pay the balloon payment but just roll it on to a new bike.
But what do I know I’m like you and save up and pay cash.
It's funny how everyone on PH pays cash for their new cars and bikes. My mate owns a motorcycle dealership and another is a salesman for a BMW main (car) dealer - the cash buyer (more so for cars and higher value bikes) is vanishingly rare - to quote the car guy "nobody pays cash". So PHers are statistically propping up the cash buyers market - must all drive them back to their houses in their "village" (they all live in a "village" too - noticed that?). You're a rare breed. I salute you.I think the idea is you don’t pay the balloon payment but just roll it on to a new bike.
But what do I know I’m like you and save up and pay cash.
Back on topic - I bought me 2017 R1 on PCP, when I bought it I had the choice of normal finance or PCP. I took the PCP and I actually don't know why - the monthlies were lower but the payments were low anyway, and I was wanting to keep the bike. I regret it. Anyway - I bought the bike at the end as being the yellow "anniversary" edition it has held its value and I'll keep it forever/til it gets stolen. Being scum and not having the cash I put the balloon payment onto a zero percent credit card deal - so I am still paying for it now, whereas if I'd just got a loan it'd be paid for. Very very poor management by me.
I'll not use PCP again. Not sure why I did it in the first place. My viewpoint might be different if it wasn't something that I was planning to keep.
t and giggles. BroadsRS6 said:
MCN had a big article on this last week and i had a good old look through the cost of buying bikes from small commuters to £35,000 beasts. Has anyone here got a bike being paid for this way and are you happy with how the plan is going?
To me it's an incredibly expensive way 'not' to buy a bike! The restrictions on mileage and required condition on hand back seem harsh and unless you're a once/twice a week rider the mileage allowances are pretty poor. It also seems that after the 3 years you are tied to, the bike may not even be worth what you still owe, that seems madness.
So are there any fans of the scheme here and if so i'd love to know what it is you like about it. I'd get a 2% interest bank loan all day long if i were buying without cash. I'm getting the new 1200 Speed triple soon, which i have saved up for but would definitely go to the bank rather than do a PCP.
Surely PCP for bikes is fundamentally the same as it is for a car?To me it's an incredibly expensive way 'not' to buy a bike! The restrictions on mileage and required condition on hand back seem harsh and unless you're a once/twice a week rider the mileage allowances are pretty poor. It also seems that after the 3 years you are tied to, the bike may not even be worth what you still owe, that seems madness.
So are there any fans of the scheme here and if so i'd love to know what it is you like about it. I'd get a 2% interest bank loan all day long if i were buying without cash. I'm getting the new 1200 Speed triple soon, which i have saved up for but would definitely go to the bank rather than do a PCP.
Main pros being lower monthly repayments. Which can make the difference between being able to buy or not.
Financed against the vehicle, which again may be a decider, as some people may not be able to easily get an unsecured loan.
Ability to hand back, buy or replace at the end of the term.
Getting a loan is all good an that, but I suspect a lot of people will not get great interest rates. The monthly repayments could be significantly higher. Also if you want out, you will have to sell the vehicle and hope you get enough to settle the loan. And it is all on the person to sort this out and not spend any of the money before clearing. If you want to buy something else you may then need to try and get another loan organised.
PCP should also offer a guaranteed value at the end of the term. Which will be how much is outstanding. You shouldn't need to find extra money as far as I'm aware. But the vehicle could be worth more, so keeping and selling could earn you some money.
Mileage rates are not limitations, but the more miles you do, potentially the less the vehicle will be worth at the end of the term. So if you declare you'll be doing the miles you'll have to pay more upfront in the monthly costs, but with a lower final price. If you don't declare the miles, then you might charged extra for them at the end of the term, as potentially it could have reduced the value. However every car PCP deal I've looked at, the cost of the miles is the same if you pay upfront or after. Also if you are trading in, this may have no impact if the value of the bike is higher than the settlement amount. So by and large it shouldn't really be an issue.
Condition, likewise is just common sense really. Clearly something beaten up will be worth less than something in good condition. And as there is a guaranteed minimum value, it obviously needs to meet that condition criteria. Basically you can't be a dick, not look after something and still expect it to be worth as much.
If you plan to keep, then the mileage and condition matter not. It only really matters when handing back and doing nothing else. If you are trading in, then chances are most places will be sensible to close the new deal.
Gassing Station | Biker Banter | Top of Page | What's New | My Stuff