I’d like to own up to being stupid, and then check im not being even more stupid.

So, my 3 year pcp deal is 12 months from completing. The dealer had called, but the replacement car would be double the monthly payements. This is because i have no deposit – says the dealer. Now, i thought my current car was the deposit, but no, because i actually owe the cars value via the final payment to keep it, right?

So in other words, to swap cars the old one pays the guaranteed future value, and i end up with zero – unless the car is valued higher of course – and I need to find a new deposit… right?

Im not sure of the benefit of this system vs lease now tbh.

You are correct.
Sadly.

Matts right you know.

Sadly.

I think PCP only really works if you run it to its term. At the moment, you owe the final bubble payment plus 12 x current monthly payment. Unless your current car’s trade in value is worth more then that, then you got nothing as a deposit for the next one.

Righto. So id better get saving for whatever i want to in 12 months! Ive no issue keeping my current car.

I’d imagine, over the next twelve months, your current car will devalue by quite a bit less than your 12 x payment. So, yeah, ending a PCP deal early normally costs.

Ive no issue keeping my current car.

This made me chuckle a bit 🙂

Vehicle Values are almost a science now, stuff changes but not as much as you might think.

Really the GFV figure should be now more than 80% of the expected value if you stick to the mileage and don’t wreck it etc.

PCPs were never great for mid-term settlement, but you should have enough for a deposit at the end.

I’d like to own up to being stupid, and then check im not being even more stupid.

The dealer had called

misjudged what this thread would be about…

If you have the money for a deposit then you may as well ditch your current car now, as you can hand it back once half the total payable has been paid.

I’ve only ever seen PCP as a way of renting a car.

Yes the total cost of a PCP over the term is the cost of deposit + monthly payments and you will need a deposit for your next PCP. I guess the aim is to get buyers to focus on a monthly payment cost, not deposits. Which appears to be true in your case?

I don’t really see much difference between PCP and lease if you never intend to buy the car at the end of the PCP.

A PCP is better than a lease when you put minimal deposit down, PCP’s only work on low deposit and IMO zero % finance.

I wouldn’t take out any PCP expecting money back at the end.

So does that mean no more car threads for a year ?

PCP and cars don’t mix. Just ask Frank.

Counter view – we’ve generally overestimated mileage and really looked after the cars we’ve had so have taken back cars that are ‘better’ than the GFV that was in the deal. It has maybe meant a few quid per month extra on the payments but insulated us against excess mileage and acted as a bit of savings for the next deposit.

Had to take it to another dealer to get a better buy back for it – just like trading in your own car, except the negotiables were how much extra above the GFV they were willing to give / how many contributions they could offer on the new one / interest rate / extras – but once that was agreed they then sorted all the finance out so in the end we signed a new agreement and on delivery handed handed one car over and drove another away.

Our current car was a PCP.

We went back to Ford to see about an upgrade but they didn’t seem interested in giving us a good deal so in the end we just settled the finance – got £16k worth of car for £12.5k.

A colleague underestimated mileage, and has a base model 1.4 Skoda Fastback.

As such dealer wants car + £1k at end of PCP deal, and they have no deposit for next car. They also put off speaking to dealer until last week – with three weeks to run on the deal…

Counter view – we’ve generally overestimated mileage and really looked after the cars we’ve had so have taken back cars that are ‘better’ than the GFV that was in the deal. It has maybe meant a few quid per month extra on the payments but insulated us against excess mileage and acted as a bit of savings for the next deposit.

Indeed – but, I’m assuming you’ve run it to the end of its term? Whereas the OP is looking to end it 12 months early. For a £300 pm deal (just plucking from the air) that’s £3.6k plus bubblle to settle. Not many cars are going to depreciate by that much over 12 months. So, PCP is all good if you take a hit upfront and increase monthly payments. But really, you gotta run it through to get any kind of deposit for the next car.

Same here, end of deal wasn’t t as good a deal as we expected. Will be better off keeping car and doing final ballon payment with a loan at the current cheapo rates.

Actually changed one at 2 years out of a 3 year deal (but that was dealer instigated so felt we had the cards in our favour to push for a deal there), the last one did run till end.

Clearly signing a 3 year deal and then trying to negotiate a good settlement after 2 isn’t generally going to go well, but was commenting more on those that were saying you had to save up a deposit, or that it only makes sense if you plan to buy it at the end or that PCP and cars don’t mix. It can, but you need to be aware of the catches and also how you plan to play it out.

and of course, if the dealer won’t give you extra above the GFV to use as a deposit on a car you believe is worth more, you can buy it, sell privately and use the excess as deposit. OK, you need a slush fund to bridge that process which can be an issue.

That’s where second time around we had to tout the car round more than just the supplying dealer to find someone who would give us the excess of value vs the GFV settlement number. One wasn’t playing at all, the other obviously wanted the custom.

I know this doesn’t help but reading these threads makes me bloody love having a company car. Christ on a bike PCP and leasing sound like a royal pain in the arse.

Reading these threads convinces me kryton57 is a spambot only here to stir up discussion. I think renton may be another

I did enjoy having a company car but the tax was just about break even tbh. The only times I felt I was advantaged was when it went wrong and you just dropped it in the garage and expensed it. I’d never buy a new car myself (OK, if I was a millionaire maybe); to me they’re just tools for getting me, the family and bikes from A to B.

But my wife loves her little Fiat, loves having a new one every 3 years and it makes her happy, and PCP is/was the best way to do that. And if she’s happy, I’m happy.

@km79 – this is frank; my recommendation to OP is – ditch PCP as soon as you can.
It’s not a stairway to heaven – it’s more like a staircase to hell.
The name of the game is for you to be conditioned to expect a new car every three years
Tell them to **** off.
Buy a cheap runaround, save money and then buy a car you……own.

OP – you’ll see from the press that car finance is increasingly under pressure for a formal review, as there are significant concerns about miss-selling.

That said (as it doesn’t necessarily affect you)…remember that car finance exists so that manufacturers can sell you some debt with the use of a car thrown in to sweeten the deal. This means that they’re incentivised to keep you on the debt treadmill – every time you buy a car, you reset your total debt back up to the maximum.

Sounds like it’s a bad deal and that you’re not taken by the idea of paying double today’s monthly payments. Either hold on and see it through (do you have the ££ for the final “balloon” payment?) or find s better replacement deal. Remember that you’re not obliged to go with the same dealer (assuming the finance is provided by the manufacturer).

Massively disappointed at the lack of Krytons secret drug habit 🙁

A dealer calls a customer and tells them they can have a new car but repayments will be double what the customer is currently paying. And they expect a sale?

“So does that mean no more car threads for a year ?“

Come on. We all know the answer to that 😀

PCP is fine as long as you look at it as a 3 year car rental.

You’ll never accumulate value in the car to act as deposit for the next one.

And never put a lot of money into a PCP deal – 1 payment down is the only way we do it.

Run the PCP to the end. Pay the final payment, own the car and then run for at least another 5 years, ideally 10.

Simples.

Run the PCP to the end. Pay the final payment, own the car and then run for at least another 5 years, ideally 10.

Simples.

Simple if you have £5k in the bank.

Why would you rent a car for 3 years and then take on ownership of it just when the bills start to come in and its out of warranty?

OP – Have you looked at how much you could sell the car for privately. If that exceeds your current loan liability (unlikely if bought on anything other than 0% finance) then you can settle whenever you want.

If you can be bothered, at the end of the term it may well be better to sell the car privately and just pay off the finance. It is all a financial transaction the car is an irrelevance.

2 PCP I have taken out, 1 was £300 deposit and £129 per month + 1 years free insurance. 2 Traded in a car that was old and knackered, paid £150 per month free servicing + 1 years insurance.

Walked away from both at the end of 3 years.

From what I remember OP put down a pretty hefty deposit, which maybe now makes sense that he thought some how his initial deposit would be ‘protected’ in the value of his car in future.

On a PCP the value of the car will never exceed the repayment value at the end of the agreement period, thats how you have to go in to these agreements.

PCP can work out loads cheaper than lease if you dont put so much down upfront.

You’ll never accumulate value in the car to act as deposit for the next one.

On a PCP the value of the car will never exceed the repayment value at the end of the agreement period, thats how you have to go in to these agreements.

Ours has, twice. Although as noted before that’s because we overestimated the mileage we needed and really looked after it (so you can argue the excess monthly plus cost of regular valeting was where the excess came from, we could have saved that up and had a cash deposit instead). And we did have to shop around the dealers to find someone willing to give a true value in order to get the next deal.

(You might also consider I deliberately did that since if I’d said to Mrs TOJV that she needed to put £30 extra a month aside for the deposit on the next one she’d have managed for a few weeks and then spent it on shoes or something. By putting the fear that not having a car that is below mileage and in showroom condition would land her a bill come handback time, ‘focused the mind’ a bit better)

(you might also consider she’s not on here…..)

Simple if you have £5k in the bank.

Well you call always get a loan. About £150 a month over 3 years?

Why would you rent a car for 3 years and then take on ownership of it just when the bills start to come in and its out of warranty?

I have a 14 yr old car and a 7 yr old car.

The 14 yr old one I have owned for 6 years and has only had consumables.

The 7 yr old I have had nearly 2 and again only consumables.

3 year old is not old for a modern car. They don’t just start dropping apart at 3 years old.

Indeed – my last 330i was on PCP. I bought it, sold it and ultimately used the money for the deposit on this one.

I may well do the same with my current car, although there’s a lot to be said for keeping what I have – £30 tax and 55mpg for example…

Why would you rent a car for 3 years and then take on ownership of it just when the bills start to come in and its out of warranty?

I’ve just taken out a PCP on a second car. We intend to buy it out at the end of the finance period. We don’t tend to change cars very often and this is a decent way to get a car that will last. Other wise we run he lottery of buying a second hand nail now, and then again in 4 or so years. Whereas when the PCP ends we’ll be buying a car that we know everything about and exactly what has been done with it!
We intend this car to last us about 10 years. Deal seems decent and is affordable, so all should be good…..

Well quite – from a financial perspective it’s daft renting the car for 3 years in the first place when you could enjoy cheaper motoring by just buying one somebody else has rented for 3 years. 😉

Sounds like a shit dealership tbh. PCP type funding has its place and can be manipulated to suit both the customer and the dealership in many ways.

Lets face it the dealership wants you on the buying cycle. 3yrs or less to change your car. They get regular sales and regular supply of nice cars to sell second hand.

So if you want to own the car then choose a different finance vehicle OR manipulate it to suit you. We bought a Fiat 500 on PCP. Decent deposit, £100pm payments and we paid the final payment on the dot. Cost me £250 in total including finance setup costs etc. That’s pretty cheap finance, but then we were always wanting to own it.

The reason your dealership is shit is they are not using the Chrysalis method which came out in the motor industry to fuel PCP deals. Its pretty straightforward but your dealership has missed the point.

The theory is that there is always a point during your PCP contract where a little bit of extra support towards the deposit from the manufacturer/dealership will turn a deal. By putting in the contract mileage and vehicle details into a computer linked to glasses/cap guide they can find a point where they just adjust the support figure to get the the exact deal you are on without any extra money. Have you ever noticed why some manufacturers offer more ‘contribution’ on new cars when taking finance. Its because a customer on finance is 75% more likely to repurchase within 4yrs.

The idea is not to call the customer and tell them that if they double their payments, they will get a new car. The ides is to find the point where the current manufacturer offer make the customer offer seem a goer. Say he called you up and said for £10 or £20 per month we have a stock vehicle which you can drive away with no deposit and we will take your current car in. That’s probably something to think about. Whats probably already happened is that your car has been valued against its expected mileage, then they have seen how much deposit contribution is available from the manufacturer and if it allows you to jump in a car without much pain then its a pretty nice sale.

If your car has 12mths to run and the dealership is asking to double payments, tell them to walk on by. If you are not desperate to sell then carry on the payments. Worst case scenario you hand it back and walk on to your next contract. If you do a bit of work you may be lucky to sell it yourself and keep any credit, but manufacturers aren’t stupid and the GFV is usually pretty sound.

Or finally, you let the dealership know that you ‘May’ be in the market to change at any time in the next 12 mths but only on similar terms to previous. If they can come up with something, you can be contacted. Sometimes a vehicle is sticking or the manufacturer is chasing numbers and they blow their brains out.

I have never sold a car in my lifetime…….

Well quite Hobo, the salesman in me tells me that theres no incentive to do f all.

IF it makes you feel any less stupid, I hadn’t even heard of PCP, never mind what it is before this thread.

😳

I think a crack habit would be cheaper than pcp.