Mercedes PCP - Good?

[anonymous-user]

I want to get out of my Z4 and use the equity in it (was a cash purchase) or my house build.

I have been offered an outgoing C class as follows: CD250 AMG Sport premium for £299 a month, 10K miles pa. Guaranteed value at end £16050.

It seems a great deal but just wondered if I am missing anything?

Thanks

[-Z-]

Deposit? Length of term?

We have the exact same car on a lease

Was 225+vat per month on a 9+23 lease

[anonymous-user]

-Z- said:

Deposit? Length of term?

We have the exact same car on a lease

Was 225+vat per month on a 9+23 lease

Sorry - 5K deposit and 35 payments. £299 is inc VAT

[wemorgan]

As mentioned above, lease deals are cheaper.

[anonymous-user]

wemorgan said:

As mentioned above, lease deals are cheaper.

Am I right that difference between PCP and lease is lease is more for handing it back at end?

[wemorgan]

garyhun said:

Am I right that difference between PCP and lease is lease is more for handing it back at end?

You can also return a PCP at the end of the term without making the final balloon repayment.

[anonymous-user]

wemorgan said:

You can also return a PCP at the end of the term without making the final balloon repayment.

So whats's the true benefit of one verses the other?

Thanks by the way for the input.

[wemorgan]

garyhun said:

So whats's the true benefit of one verses the other?

Thanks by the way for the input.

I believe you can terminate a PCP early, after 50%. Whereas a lease must be taken to the end of the term.

[anonymous-user]

wemorgan said:

garyhun said:

So whats's the true benefit of one verses the other?

Thanks by the way for the input.

I believe you can terminate a PCP early, after 50%. Whereas a lease must be taken to the end of the term.

Thanks.

Have not financed a car for over a decade so it's all a bit of a minefield.

[sw67]

I dont think pcp deals work with a deposit of more than 2-3k. When i looked at mercedes pcp deals the balloon payment was too high so you lost all your deposit.

I want a deal were the car has equity at 3 years for the next deal.

[Emubiker]

sw67 said:

I dont think pcp deals work with a deposit of more than 2-3k. When i looked at mercedes pp deals the bllon payment was too high so you loast all your deposit.

I want a deal were the car has equity at 3years for the next deal.

The Baloon payment on a PCP is the Guaranteed future value: the higher the better.

[anonymous-user]

sw67 said:

I dont think pcp deals work with a deposit of more than 2-3k. When i looked at mercedes pp deals the bllon payment was too high so you loast all your deposit.

I want a deal were the car has equity at 3years for the next deal.

Interesting. This is a £5k deposit with a GFV of £16050. I would never dream of buying the car at the end BUT does that GFV mean that effectively I have £16050-whatever the car is worth at the end as equity (or negative) to use as a deposit on another car if I move onto another PCP?

[Dr Jekyll]

Emubiker said:

The Baloon payment on a PCP is the Guaranteed future value: the higher the better.

Not really, less chance of equity at the end and you're paying more interest.

[Emubiker]

garyhun said:

Interesting. This is a £5k deposit with a GFV of £16050. I would never dream of buying the car at the end BUT does that GFV mean that effectively I have £16050-whatever the car is worth at the end as equity (or negative) to use as a deposit on another car if I move onto another PCP?

If the car is worth more then that is your equity, if the car is worth less, then you hand it back and dont have any negative equity.

[anonymous-user]

So a low deposit lease sounds like it may be a better deal for me.

[Emubiker]

Dr Jekyll said:

Not really, less chance of equity at the end and you're paying more interest.

With a PCP your paying interest on the whole amount anyway, whether its part of the baloon or your monthly pyments. Point of a PCP really is to get a newer car for a lower payment.

[Dr Jekyll]

Emubiker said:

With a PCP your paying interest on the whole amount anyway, whether its part of the baloon or your monthly pyments. Point of a PCP really is to get a newer car for a lower payment.

But you're borrowing the balloon for longer than the monthly payments. Take £1000 off the balloon and spread it among the monthly payments you're owing just over £500 on average instead of £1000.

[-Z-]

To expand my earlier post I think I saw these being punted out to cash buyers at £29k, therfore to have any equity left after 3 years the car would have to have retained over 50% of its value. Unlikely IMO add the new model C-class will have been around for 2.5 years by then.

That being the case, leasing should be several thousand pounds cheaper over the term.

Also after we ordered ours (through an online broker) a friend of mine went to a Merc dealer with a print out of our deal. They laughed him out of the place telling him these were for phantom cars that would never turn up. Ours turned up 10 days later.

[daemon]

garyhun said:

I want to get out of my Z4 and use the equity in it (was a cash purchase) or my house build.

I have been offered an outgoing C class as follows: CD250 AMG Sport premium for £299 a month, 10K miles pa. Guaranteed value at end £16050.

It seems a great deal but just wondered if I am missing anything?

Thanks

Having built a house and had cars on finance, my advice would be to use the £5000 or deposit you are proposing putting down as a deposit and buy a car for cash.

Firstly, house builds ALWAYS go over budget - ours went over by 20%, which was another £60,000 we had to find we hadnt budgeted for. If you tie up your money in a PCP deposit its dead to you. If you buy a car at £5K you can always flog it. I went from a £50K X5 to a new Passat (both PCP deals) then to a £3K Merc for cash to, make the whole thing fly.

If you lease the car you need to be very sure of your outgoings over the term of the lease. You cannot hand it back early with basically paying ALL the remaining payments.

Also dragging a brand new merc over a building site for the 18 months it will take to build isnt going to be fun, and there will ALWAYS be times you need to pick up something from a builders yard.

Personally, i'd buy a £2K Passat Estate car, see where your finances are when its all done and go from there.

[anonymous-user]

daemon said:

garyhun said:

I want to get out of my Z4 and use the equity in it (was a cash purchase) or my house build.

I have been offered an outgoing C class as follows: CD250 AMG Sport premium for £299 a month, 10K miles pa. Guaranteed value at end £16050.

It seems a great deal but just wondered if I am missing anything?

Thanks

Having built a house and had cars on finance, my advice would be to use the £5000 or deposit you are proposing putting down as a deposit and buy a car for cash.

Firstly, house builds ALWAYS go over budget - ours went over by 20%, which was another £60,000 we had to find we hadnt budgeted for. If you tie up your money in a PCP deposit its dead to you. If you buy a car at £5K you can always flog it. I went from a £50K X5 to a new Passat (both PCP deals) then to a £3K Merc for cash to, make the whole thing fly.

If you lease the car you need to be very sure of your outgoings over the term of the lease. You cannot hand it back early with basically paying ALL the remaining payments.

Also dragging a brand new merc over a building site for the 18 months it will take to build isnt going to be fun, and there will ALWAYS be times you need to pick up something from a builders yard.

Personally, i'd buy a £2K Passat Estate car, see where your finances are when its all done and go from there.

Thanks for that.

I'm actually only 8 weeks from finishing the build - the messy stuff has been done and my builder does the lugging around.

Fortunately I've managed to keep to within 5-10% of budget and that's already accounted for, but I want to ensure the final things that really finish the house properly (shutters, electric gates etc) can be paid for.

The issue for me is buying a cheaper used car is having to sell the car privately if I want to downsize. I'd prefer not to do that but it's something I need to consider.