Too Good to be True?

[daren.mills]

I have been offered the following pcp deal for a new car:

Total Cost (inc interest) £21,281.50 (interest rate 4.99% over 3 years, monthly repayment around £100 per month)
Part Exchange £12,500.00 (will take £7k as maximum deposit and give me back £5.5k cash)
Customer Deposit is therefore £7,000.00
Dealer Contribution £2,800.00
GMV £7,900.00
Total Net Cost £15,781.50 (includes £5.5k given back to me)

Total Net Cost to Buy Car Cash £18,809.70 (as wouldnt get dealer contribution)

Meaning its nearly £3k cheaper to purchase on finance due to the dealer contribution?

Is this correct or have I missed something?

Your help would be appreciated.

[Pica-Pica]

I presume the net cash cost is without any discount you could negotiate (there or elsewhere).

[daren.mills]

RRP was £19,923.00 so did get some discount yes.

[anonymous-user]

what is the car?

[Saleen836]

What mileage restriction is on the deal?

[Gregmitchell]

Do you like sausages?

[jas xjr]

Presumably you have looked at carwow etc for a comparison on price

[daren.mills]

6000 miles per annum as its just a run around for my wife.

[daren.mills]

My initial enquiry was through carwow so yes.

I think its a good deal because I have provided a large deposit and they provide a large dealer contribution which isnt there if you pay cash.

The interest cost over the 3 year term is lower than the dealer contribution I would have lost paying cash.

Doesnt correspond with general advice that says pcp is more expensive than cash purchase because they charge interest.

[Saleen836]

daren.mills said:

My initial enquiry was through carwow so yes.

I think its a good deal because I have provided a large deposit and they provide a large dealer contribution which isnt there if you pay cash.

The interest cost over the 3 year term is lower than the dealer contribution I would have lost paying cash.

Doesnt correspond with general advice that says pcp is more expensive than cash purchase because they charge interest.

With such low mileage and as it is just a run around for the wife why not just buy a decent used vehicle for £10k and pocket the balance from the trade in?

[daren.mills]

Its a brand new model that my wife particularly wants so that wouldnt work.

I did think about waiting for a few months and buying one second hand but thought sod the depreciation.

Just seemed a bit too good to be true in terms of pcp v cash.

[ZX10R NIN]

What car?

[Gareth1974]

These are quite nice for a little runabout https://leasing.com/independent-brokers/blue-chill... £7500 for 3 years/8000 miles a year.

[Haws]

Not got time to look at it properly as it's home time in 2 mins but are you not missing £3600 worth of payments from that?

[daren.mills]

Little, I think that car is smaller than me!

[treeroy]

yeah that sounds about right, PCP is usually a lot cheaper than buying it at the RRP for cash. Dealers want you to buy on PCP so that in 3 years time you go back to them and more likely to get another deal through them. Then they can sell you like 3 cars to the same customer rather than just 1.

[anonymous-user]

treeroy said:

yeah that sounds about right, PCP is usually a lot cheaper than buying it at the RRP for cash. Dealers want you to buy on PCP so that in 3 years time you go back to them and more likely to get another deal through them.

It very much depends on the car, some cars new can be had up to 30% off rrp.

[daren.mills]

The £3600 payments are included in the total finance cost (the first figure).

I have gone through it several times with the Nissan dealer and come to the conclusion its simply a good deal.

I am always suspicious of car dealers for some reason.

[treeroy]

Thesprucegoose said:

It very much depends on the car, some cars new can be had up to 30% off rrp.

Yeah, absolutely, some won't be much cheaper, some will be a lot, all I'm saying is its not too good to be true, quite normal for PCP to end up costing less, thanks to "dealer contributions".

I went to a Mazda dealer once looking at an MX-5, RRP 19K, they gave me £4500 off the list price and some very low finance rate. Didn't go through with it but yes you can get pretty huge discounts!

daren.mills said:

I am always suspicious of car dealers for some reason.

With good reason.

[Gareth1974]

daren.mills said:

I have gone through it several times with the Nissan dealer and come to the conclusion its simply a good deal.
.

Qashqai?