Questions on taking on a GT4 using PCP.

[Buggyjam]

Alright all. This is something I’ve wanted to ask, but daren’t. I’ve plucked up the courage to ask, so please go easy on me

I was looking around an OPC recently and looking at the details in the window on a 2016 GT4. I think the details were as follows

Deposit - £15k
Car price - £80k
Balloon - £43k (I think it was)
Monthly - £1000
Term - 36 months
Apr- 7.8
Annual miles- 10000

It sparked my curiosity. I broadly understand how PCP works.

1/ If you actually drove a GT4 for 10000 miles per year, how much would that knacker the value after the 36 months? Just looking at the balloon payment I can’t invisage it would be worth less than £43k. It would be 5 years old with 36000 miles. I appreciate it wouldn’t remain it’s lofty worth they currently sit at!

2/ Miles notwithstanding, do you see GT4 values remaining solid or shallow drop? If after 3 years would it be unreasonable to expect the residual to be north of 55k?

3/ with that in mind could you hand the car back after 3 years and use the equity towards another, newer GT4 to lower the monthlies? Could you then repeat the process again, each time putting more and more into the next? What is the limit on how much you can put towards pcp?

4/ I’m aware they run on expensive cup tyres. The car comes with extended warranty for 2 years. I’m not familiar with the extended warranty. Are there any “gotchas” on it for something like a GT4, say bushings that wear easily that aren’t covered etc.

5/ With PCP are things like stone chips classed as wear and tear? A front end blow over could badly eat into your residual I imagine.

6/ I shamelessly would want to use it as a prime car (some of you are fainting now, I can hear the thumps). I fly to work so it would only be for days off. My current Porsche is my only car. I can live with noise and hard suspension. Comfort doesn’t bother me. I just love to use them, all the time. I’m not a for special days person

7/ I understand GT cars lack decent underseal protection. Is that right? Would any surface corrosion underneath from driving in the wet be deducted on pcp?


Thanks for your tolerance. I’m not a high end P car owner as you can rightly tell ha. And I appreciate my questions might smack of naivety. Thanks.

[Buggyjam]

Thanks chaps. I appreciate the replies. I was surpised at the 10k pa mileage on the information sheet. I thought OPCs didn’t like people driving these things ha. In all honesty the way I use my current P car I’d not put on 10k pa, but still likely do 7000.

That is a very good point re tyres. So you’d have to factor in a set of winters. And I’d need somewhere to store the summers.

Thanks for suggestion re the GTS. You know I have actually that’s a good suggestion. I’m still not discounting the GTS. The GT4 just bowled me over when I sat in one at an open day, that’s without driving it.

I presumed the depreciation would have been shallower on the GT4 than the GTS although whether that amounts to losing more in numbers I’ve no idea. I could see handing it back with miles on would hit hard. Given they’re quite young cars I can’t find any examples to see how hard. Anyway, not that bothers me in principle - I like driving them . I was thinking as long as the equity is enough at the end that I have the same £14k to put into another. But I can see like you say, most likely not.

[Buggyjam]

Taffy66 said:

Basically you're paying £14k interest to borrow £65k over three years..Seems expensive to me compared to base rate at 0.5%.

Hi Taffy, would that be only the case if you handed the car back and it was worth the same or less than the balloon? Say some simplified figures...

Car cost £80,000
Balloon £40000
Actual Final value after 3 years £40000
Payments £36000 ( over 3 years)
Deposit at the beginning £14000

So I can see if you hand it back and it’s worth the same as the balloon there’s nothing to put down for a newer car. So on top of the monthlies you’ve lost the £14k. But if the car was still worth more than the balloon you’d have some to put to the next car, so not all of the £14k is lost?

I’m trying to get my head around it all still

[Buggyjam]

Far Cough said:

Firstly , are you looking to keep the car beyond 36 months ? It will make a big difference. You can get cheaper APR`s if you shop elsewhere and a higher deposit will lessen the monthly payment.

Hi Far cough, thanks for taking the time to help with all the questions. Useful info.

I’m not sure about whether I’d want to keep it or not. I could see I’d be tempted to see how bad it depreciates over the course of the 3 years. I accept it’s going to go down a good chunk with use. It is a car. Still the value at the end means nothing if I keep it, as I’d still have paid £90 odd thousand.

Other factor is a 5 year old Gt4 will a few years later start need increasing bits and bobs to keep it ship shape.

I can see it’s a really expensive way to buy if you pay the balloon off.

Mm. I’ve had some really good points on pcp raised on here. Food for thought.

[Buggyjam]

Porsche911R said:

.

You think I am Porsche super owner ! lol I bought my 1st new Porsche age 45 !!!! and lost money on it. (GT4)

Hi

See you owned a Gt4. At what point did you lose money on it? Did you buy new and sell after a few years or buy at the peak? Absolutely please tell me to bog off and mind my own business. Just curious as researching into these cars I kind of got the impression after they were released. they all went up a in price on the nearly new/ slightly used market, peaked and have dropped slightly but still seem more expensive than when new. It seems a fair lot are held on opc stock looking around online. My analysis is most likely totally wrong and open to be put straight

Anything pertinent to gt4 ownership you found yourself? Any surprises or gotchas?

Edited by Buggyjam on Monday 23 April 18:17

[Buggyjam]

Porsche911R said:

Miles = smiles for the driver but miles = less value when selling, a 5k mile car is classed as high miles after 2 years !!!! it's all madness.

I can see the cost of some of them at 2 years old sitting on OPC stock they must be laughing as they’ve sold them once when new for less money. It’s like a rinse and repeat ha

I’d be going (if I do) into it to just use it and that’ll tank the value. If (big if) I did use pcp and use it properly I’ve also got to factor in things like obvious paint damage from chips. That’ll be a few grand for film or respray too. Things like that. I read unless you track them or bang the discs, the pccbs last a long time.

I’ve heard stories (true or not I don’t know) of opcs basically telling people not to use them much. If that’s the case I was surprised to see on that pcp propostion an annual of 10,000miles. Given the cars invariably end up back on the stock sheet for a second go with someone else, I would have thought they’d want to slap a lower limit on?

[Buggyjam]

Hi P-MJH . Like you say, I don’t have 80 grand in my current account (nicer problems to have ) I’m sensible with repayment commitments.

You’ve mentioned something I was not even aware of, that you can use pcp from outside Porsche. Shows my lack of knowledge on pcp. I really need to do some more homework on that. Are there any finance companies that you know of who would be a better pcp option? I could look into those to explore the numbers.

Thanks for your help.

[Buggyjam]

There’s some really good questions being raised. Some good stuff. It’s had me thinking!

Rightly or wrongly I had put down my cars as another monthly outgoing on something essentially disposable that I choose to do. You you don’t really need to live or survive but enjoy, gym membership, a hobby etc. Just outgoings really. When you add it all up over the year it’s quite expensive as an annual sum. I don’t buy gym membership outright, or have my yearly allowance for meals out sitting there. Non of it is an investment in a financial way, just things you enjoy day to day that cost money to do. A lot of those things add to quite a sum over a year and you’ve got nothing tangible to show for them after the fact really. They’re just enjoyable.


Mm, it’s all good opinions. Food for thought. Cheers chaps!

[Buggyjam]

Porsche911R said:

NO they care what other people have and want to be seen in the same car at any cost !

Blimey, hope you don’t mean me in that post . Just to say I’m happy when I read it, I don’t fit into those descriptions. I just love them. Doesn’t matter if anyone is watching. I don’t mind what others have. I’ve never been an envious type .

[Buggyjam]

SL550M said:

As an earlier poster said, there is some validity in the argument that cars can be viewed as just another monthly outgoing, like any hobby or discretionary purchase. One of my best mates was very much against car expenditure at any level and always drove around in something old and usually very boring. He would, however, happily spend 10 or 12 grand on a 2-week family holiday sitting on a beach cooking himself in the sun. None of my cars (including Ferrari and Porsche, some but not all of them PCP'd) ever cost me that much in a year. He was happy with his holiday 2 weeks of the year. I was happy driving a gorgeous car for 52 weeks of the year. Whatever makes you happy, and you've got the money, I say just do it.

Ha bar the foreign holiday thing, you’ve just described me . I always ran round in rotten old bangers until last year as wasn’t fussed on cars. Then I discovered an interest in Porsche cars.

[Buggyjam]

Twinfan said:

But for a lot of people PCP isn't purchasing, that's the point. It's leasing or paying to use it, which is fine if you understand the game and are happy to play. Some people seem to think it's the devil's work, which it isn't, it's just a way to get into a car you want to drive without actually owning it - but at a cost.

When I was in my really early twenties I used to blow all the wages I earned (tiny amount) on flying lessons. Essentially renting. Used to cycle down to the airfield as couldn’t afford a car. Bit like the same thing in that regard, just paying to use something. Closest I ever came to owning an aircraft was a share in a wooden single seat home built one with a vw beetle engine . Those were the days!

[Buggyjam]

Granfondo said:

People like PCPs and on some NEW cars there is an argument that it can be cheaper than buying outright with cash.
But using the OPs example,if the car is only worth the GFV you have spent £51k yes £51,000 to rent a GT4 before any expenses tyres,servicing etc.

If that sounds like good value for your hard earned cash then crack on!

Yes that’s a big caveat. I would use the car to do normal miles, prob about 7-8k a year . There’s no prior GT4 form to see how bad this will affect it. I know the word would be “badly” Ha. I presume (we all know what that’s the mother of ) that driving it will kill the value down to somewhere in the 50s. But I can’t see a 5 year old GT4 being worth into the 40s. That’s getting towards the territory of what a 5 year old Cayman S are currently going for (low 40s).

What you say re the cost is totally on my mind. That is scary when you view it like that. And regardless of what it’s worth at trade in, I still will have paid £51k at the end of the 3 years.

I’m viewing this many ways and doing my research. I’ve an open mind to all the options and there’s been some good ones on here, from alternative vehicles to financing aspects. I’m certainly not committed to going down this route and keeping my appraisal open. I’ve found it valuable advice so thanks to everyone so far!

[Buggyjam]

Porsche911R said:

yes the balloon is the GFV, so you pay the balloon or hand the car back.

deposits are often lost or a big % of the deposit is lost, hence if you not saved up a new deposit you generally have to down grade your car all else being equal.

I have seen people being given inheritance and 3 cars later they have gone from a nice £30k car to a £20k car to having nothing left !!!

only winners are dealers.

I was watching a video on finance and the chap mention putting down a deposit is often counter productive. I can see when it comes to handing the car back you’re essentially in the same position as you started with (no deposit on the first pcp, no deposit on the second pcp) but of course that means a higher monthly cost and therefore far more interest being paid as the borrowed amount is higher. I couldn’t get my head around the benefit myself. Either way it’s expensive!

I’ve used online calculators on a straight forward loan for 65k at 4 percent apr and the charges were 5k over the course of the term (60 months). I’ve no idea if 4 percent Apr is achievable. Using the settlement calculator and taking a rough (trying to be realistic not optimistic) guess as to value at year on year to year 3 it’s about a 25k loss from year 1 onwards if you want to sell the car and settle at various points, Varies a bit with the way interest is paid of course. With pcp as someone mentioned the hypothetical of handing it back after year 3 could equate to a 45-50k loss.

[Buggyjam]

SV_WDC said:

So do Porsche not offer a GFV on their PCP deals?

Thought that was a buyer advantage on the finance. Being able to know how much a car is going to cost you in monthlies over the term, then if the car is worth more than GFV the equity can be transferred into the new deal. If it's worth less then the buyer doesn't lose out, the dealer does. The buyer may just find themselves with no deposit for the next deal.

I’m guessing but I bet they make more in the finance than any “loss” of the vehicle is worth less than the GFV. Also they have their mark up on the final value.

Which brings me to another question, is there anything that stops dealers offering you an artificially low final value? Or do they see benefit in offering you a more realistic higher value if it is more than the GMFV so you “believe” you have some to put towards the next one which tempts you into signing up to another deal?

[Buggyjam]

Granfondo said:

Can we turn down the sensible post button down a few clicks please!

No I like suggestions like that ha!

[Buggyjam]

n12maser said:

Here's another thought. Don't agree that you should go without anything for 3 years but I do agree you should only buy a GT4 when you can afford one WITHOUT HAVING TO BE F&CKED BY A PCP DEAL.

So....In the short term, why not get into something slightly more affordable + less likely to continue depreciating, e.g. a 981 Cayman GTS. buy private with an inspection so you're not paying the dealer markup and VAT. fund the car with as high a deposit you can afford + a personal loan over the next e.g. 3 years to make up the rest.

In 3 years sell the GTS that you will own outright and then make the jump into a GT4 using the same deposit + personal loan route.

Hi maser.

Thanks for your suggestion, it’s one I have been looking at myself. Im not transfixed on the GT4 pcp Avenue by any means. I’m considering all avenues. GTS seem to go for about 55-60 for a 2015. Would you say in 3 years expecting a 2015 GTS to be 35k to be a sensible assumption?

I’m not for the minute hanging up on residuals (you can see from my OP Im firmly in the cars are to be driven, the value drops approach ) just it’s part and parcel of running ideas around.

Thanks

[Buggyjam]

Twinfan said:

Personal loans for over £25k aren't exactly the easiest things to get hold of...

My banking app say I’ve pre approval from my bank for a personal loan up to 50k but the Apr is most likely rotten as an old apple.