PCP finance for new car

[dgoodwin1]

Hi guys,

I am thinking of buying a new car but unsure what to think of the PCP...

I am on PCP at the moment but will get off it via voluntary termination, so I have a few questions relating to this.

The main question is around the dealer's contribution - how likely is it that the dealer will put in a contribution towards the pcp deal? As my current pcp finance agreement, the dealer put £750 towards it and I put down a deposit of £500 with a final payment of just under £11K.

If the likelihood of the dealer putting a contribution down is good or high, how would they work out what to put towards it? Or is that all within the negotiations at the beginning? The car I have on PCP at the moment, I part exchanged from the previous car totally up to a repayment value of 28K. The new car I am looking at is 20K.

Also, in regards to the final payment, are you able to choose this figure or does the dealer pick it for you? As mentioned above, this is just under £11K

Any advice on this would be great.

Thanks,
Dan

[AdamC28]

The GFV is a set amount that will be a rough estimate of what the car will be worth at the end of your agreement. This is not negotiable. The variable that will change the monthly cost will be the deposit you put in.

Lower deposit = higher monthlies. Higher deposit = lower monthlies.
In both scenarios the GFV will be the same.

A dealer contribution is an incentive that the dealer can use to help to discount the deal. This is just seen as a discount on the RRP.

[dgoodwin1]

AdamC28 said:

The GFV is a set amount that will be a rough estimate of what the car will be worth at the end of your agreement. This is not negotiable. The variable that will change the monthly cost will be the deposit you put in.

Lower deposit = higher monthlies. Higher deposit = lower monthlies.
In both scenarios the GFV will be the same.

A dealer contribution is an incentive that the dealer can use to help to discount the deal. This is just seen as a discount on the RRP.

Thanks for your reply Adam.

What is GFV, sorry? Is that the final payment?

So the dealer contribution, is it likely every dealer will put it on the agreement?

[jsims1]

GFV is Guaranteed Final Value

[VAGLover]

Oh my days!
Right, contribution can come from two areas.

1. The finance house, for VW/Audi etc it’s VWFS
So something like £1250 contribution etc

2. The dealer may also, often they split the discount via discount / contribution

Ultimately, the key for a PCP is the difference between buy price and Final payment plus the interest rate charged.

Use car wow to work out discounts and contributions

[Begall]

Use coast2coast or drivethedeal to find out what the going discount is, 90% of the time I’ve found these offering the best discounts. Then either order off there or find a dealer closer that will match it

[daemon]

dgoodwin1 said:

Hi guys,

I am thinking of buying a new car but unsure what to think of the PCP...

I am on PCP at the moment but will get off it via voluntary termination, so I have a few questions relating to this.

The main question is around the dealer's contribution - how likely is it that the dealer will put in a contribution towards the pcp deal? As my current pcp finance agreement, the dealer put £750 towards it and I put down a deposit of £500 with a final payment of just under £11K.

If the likelihood of the dealer putting a contribution down is good or high, how would they work out what to put towards it? Or is that all within the negotiations at the beginning? The car I have on PCP at the moment, I part exchanged from the previous car totally up to a repayment value of 28K. The new car I am looking at is 20K.

Also, in regards to the final payment, are you able to choose this figure or does the dealer pick it for you? As mentioned above, this is just under £11K

Any advice on this would be great.

Thanks,
Dan

Its moreoften the manufacturer backed finance company giving the finance contribution, so dont be fooled into thinking its the dealer (and thus be getting a lesser discount from them)

The final payment is calculated by the finance company.

As has been said, use carwow, drivethedeal or broadspeed to get the best price. Your local dealer should be able to price match (or close to it).

Split the deal into three parts :-

Price of the new car
Value for your car
Finance deal

Negotiate on each - and check multiple sources for each. DONT let the dealer make it simply about the "monthly payment".

[Andy665]

You can lower the GFV but there is absolutely no reason to do so. GFV is there as a safety net, why make your safety net smaller - only possible beneficiary is the finance house