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Shedite View Drop Down
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    Posted: 22 Jun 2017 at 9:20am
Fair enough deise, my circumstances made sense to go PCP. I did the maths, weighed up the pros and cons and haven't regretted it so far anyway.

But I agree PCP is definitely something that people need to understand more than just the flashy ads - I can imagine there are definitely some people signing up and getting a shock down the line.
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Post Options Post Options   Thanks (1) Thanks(1)   Quote deise316 Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 11:15pm
Originally posted by 9fingers 9fingers wrote:

 

I wouldn't be purchasing a car under it anyway, that's for sure.
Deise, another who'd be in the trade, I'd imagine would agree

Personally I'd never buy a brand new car, 3 or 4 year old car bought with trade in & CU loan is the best & safest way imo

No, wouldn't go next or near one, for a number of reasons. 

But just to clear up a few points Shedite made, because some are incorrect - 

You can't modify it in any way whatsoever. Even putting a towbar on it, theoretically adding value to it, will likely result in money being taken off the fixed trade in price at the other end. Not because the car is worth more or less, tis just because you haven't obeyed the small print. On some of them, services, crash repairs will have to be carried out by specified dealers/repairers (obvious enough why) and all the rest of the stuff 9F pointed out. 

It is a finance agreement, but as the small print says ''You DO NOT own this vehicle until the final repayment has been met'' . This is where car finance differs from a bank or CU loan, in those cases, you do own the car, and if you needed money for something unforseen, you could sell it tomorrow with 4 years and 11 months left on a 5 year loan, the bank don't care. You can't sell a PCP car on to someone else, nor a car with outstanding finance, legally, at that point, it is the property of the finance company. 

You can of course tax & insure it as your car, none of the finance, insurance or motor industries would function if you couldn't. 

PCP itself- The cost/deposit. So you are getting 4K off a new car by trading in your 12 yr old ball of scrap on wheels ?? Eh, you aren't. You are getting precisely nothing. Put it like this, if you are buying a 24K car, you could trade in your old one under PCP & get it for 20k, like the Ad says. Or, if you could come up with 20K some other way, head in to the dealer with it, and you will get it for 20k, you might even get it for 19K, depending on what shape the garage.industry is in at the time (though you have no way of knowing this). Cash is king, cash with no trade in- even better. 

Here's the thing though, nobody stops at the first PCP (nor do they want you to). You will get your guaranteed value for the car as a trade in (there is a flaw here as well, I'll get to it in a minute) and instead of paying off the final lump sum, most will likely just change cars for another new one. Which might be a bigger & more expensive car, maybe your family has got bigger in the 3 years, an extra kid or something, or you are doing more mileage & want something more comfortable. 

So, you can afford the repayments, and on you go again. 5 or 6 cars down the road, when you are maybe close to retiring age, you will need half your entire pension to pay off the lump sum on your last purchase. Some won't, they will be prudent about it & just buy one VW Polo after another, so the final payment won't be too bad, but most who start on this road will end up in something bigger & more expensive when the entire process ends. 

Yer also more or less stuck with the manufacturer you choose. Take a loan out to clear the final payment on yer Renault or Peugeot, maybe you fancy something more exotic, head in to your VW /Audi dealer with it & see how much you will get for it. They won't want the thing, and will give you less than the Renault dealer will, so you will likely lose something on the trade in if you switch manufacturer/dealer. Maybe not a huge concern for some, but it will be a factor for some down the road. 

It's not all bad, and the example Shedite did give in comparison to the bank loan proves this, the cost of credit was a lot less via PCP. But really, it is just a way of selling new cars, I don't quite buy the new car reliability argument, with your new PCP car, any repairs will be covered under warranty (it doesn't mean the car will be reliable, just that you won't have to pay to fix it)- buy a 3 or 4 yr old yoke in a dealer, you will be able to negotiate 12 months warranty, after a year, you will probably have an idea if the car is reliable or not, if yer still worried, take out a 3rd party warranty with the likes of Mapfre for a few hundred quid, they don't cover everything, but all major mechanical/electrical stuff will be covered, minimising large expenses. 

As 9F said, it really depends on whether you want a new car or not, and I don't think I've ever met a single person in the trade who bought a new car. Plenty trade lads driving them alright, all demos/company cars where the dealers are encouraged to register new cars to keep up market share & sales targets and then sell as 2nd hand/near new at a later point. 



Picked the wrong week to quit sniffing glue.....
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Sham157 Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 4:51pm
Will be hopefully changing car in the new year, been having a look at the various options so interesting to read some personal experiences here. On my current car, I went HP initially but then got a CU loan and cleared the HP. Obviously I can now pay back extra when I want to clear it a bit quicker so thatch handy. I saved just over a grand by paying the HP as opposed to letting it run to term. 

Reckon I'll go the CU loan route next time and buy something a couple of years old. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Zinedine Kilbane 110 Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 4:48pm
Originally posted by 9fingers 9fingers wrote:

Originally posted by Zinedine Kilbane 110 Zinedine Kilbane 110 wrote:

Originally posted by horsebox horsebox wrote:

So in theory stay away from a PCP?


I would say do some research before you jump into it.

90% of the time the best option will be

1) Post office
2) Bank Loan
3) PCP / Hire purchase / Leasing option

Sheide looks like he did his homework and it worked out for him.

I wouldn't be purchasing a car under it anyway, that's for sure.
Deise, another who'd be in the trade, I'd imagine would agree

Personally I'd never buy a brand new car, 3 or 4 year old car bought with trade in & CU loan is the best & safest way imo

Yeah its personal preference.

I've always bought 2nd hand but then I don't use it for work.
My Missus uses PCP (she is really bad with money) and changes every 3 years but she uses her's for work and wants a reliable car.
And yes I do get stick that her car is better than mine. 



Edited by Zinedine Kilbane 110 - 21 Jun 2017 at 5:02pm

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Post Options Post Options   Thanks (0) Thanks(0)   Quote 9fingers Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 3:45pm
Originally posted by Zinedine Kilbane 110 Zinedine Kilbane 110 wrote:

Originally posted by horsebox horsebox wrote:

So in theory stay away from a PCP?


I would say do some research before you jump into it.

90% of the time the best option will be

1) Post office
2) Bank Loan
3) PCP / Hire purchase / Leasing option

Sheide looks like he did his homework and it worked out for him.

I wouldn't be purchasing a car under it anyway, that's for sure.
Deise, another who'd be in the trade, I'd imagine would agree

Personally I'd never buy a brand new car, 3 or 4 year old car bought with trade in & CU loan is the best & safest way imo
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Zinedine Kilbane 110 Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 3:35pm
Originally posted by horsebox horsebox wrote:

So in theory stay away from a PCP?

I would say do some research before you jump into it.

90% of the time the best option will be

1) Post office
2) Bank Loan
3) PCP / Hire purchase / Leasing option

Sheide looks like he did his homework and it worked out for him.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote 9fingers Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 3:31pm
Originally posted by Shedite Shedite wrote:

Originally posted by 9fingers 9fingers wrote:


On any PCP agreement I've seen;
1. It's not your car, in the same way as if you lease a house it's not your house.
2. You cannot modify the vehicle.
3. You cannot paint the vehicle, all repairs & alterations are to be done by the garage you purchased in & only them. Same with servicing and any other mechanical repairs/work
4. You're limited to certain mileage or face extra charges when the lease is over.
4. Any scratches etc will face extra charges when lease is up  
I'm not too concerned about modifications so didn't look to far into that. With regards "ownership", I guess there's a few ways to look at it. It stays outside my house, I pay the tax, I am the only one that gets to use the car, it's registered under my name on the NVDF. Not sure if there's any further level I need. Crucially too, I can insure the car in my name. You can't insure a car that's not owned by you. So in that terms, it's not the same as leasing a house. You can't insure a house that you're leasing.

Yes the two services that I do in the 3 years need to be done in the garage I bought it from.

Mileage was set at a level that I'm comfortable with and am confident I won't break.



If it suits your needs then happy days.

I was just posting to point out the negatives of it as only the positives had been covered so far
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Shedite Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 3:26pm

I’ve already bought via PCP, and have nothing to gain from this argument, just throwing out the numbers in case anyone is thinking of it.

In my scenario, I needed to upgrade from a banger, worth about €500 at most I reckon so something more reliable (family reasons).

Ended up on Peugeot 2008.

I went looking at the 3 year old route, which is about €15,000. Less my €500 scrappage and €4k cash, that needed a bank loan from BOI of €10,500 at 8% which would be about €210 a month for 5 years.

With PCP, they gave a €4k allowance. So my €23k car new, less €4k scrappage and €4k cash, required €15k finance, which Peugeot gave me at 0%. Results in repayments of €220/month for 3 years, and then the final payment will be put into a car loan of €7500 over 3 years so €230 month for 3 years (less as I can save any spare cash over the next 3 years).

I could also have gone down the Credit Union or Bank Loan route, presume I could negotiate them to give me the €4k trade in, and €4k cash, I’d have had €15k to finance via bank loan, which would have cost me €300/month for 5 years

  1. Route A (second hand car) would cost me €12,600 in repayments for a 3 years old car
  2. Route B (New via PCP) will cost me €16,200 so €3,600 more but the car is new and will be 3 years younger whenever I sell the car.
  3. Route C (New via Bank loan) would be the same car but would have cost me €18,000 in repayments (€15k loan for 5 years).

They were my choices, each to their own. Now, back to Avocado Toast

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Post Options Post Options   Thanks (0) Thanks(0)   Quote horsebox Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 3:22pm
So in theory stay away from a PCP?
It was far across the sea,
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na na na na na na na na na
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Shedite Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 3:18pm
Originally posted by 9fingers 9fingers wrote:


On any PCP agreement I've seen;
1. It's not your car, in the same way as if you lease a house it's not your house.
2. You cannot modify the vehicle.
3. You cannot paint the vehicle, all repairs & alterations are to be done by the garage you purchased in & only them. Same with servicing and any other mechanical repairs/work
4. You're limited to certain mileage or face extra charges when the lease is over.
4. Any scratches etc will face extra charges when lease is up  
I'm not too concerned about modifications so didn't look to far into that. With regards "ownership", I guess there's a few ways to look at it. It stays outside my house, I pay the tax, I am the only one that gets to use the car, it's registered under my name on the NVDF. Not sure if there's any further level I need. Crucially too, I can insure the car in my name. You can't insure a car that's not owned by you. So in that terms, it's not the same as leasing a house. You can't insure a house that you're leasing.

Yes the two services that I do in the 3 years need to be done in the garage I bought it from.

Mileage was set at a level that I'm comfortable with and am confident I won't break.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote SuperDave84 Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 3:15pm
Yeah, I don't own a car or even have a driving licence.
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Excellent advice gents, even though a cycle a bike hahaha
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Butch Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 3:03pm
I admittedly looked at it for a car for herself. The ad on the radio was for a Audi A3 and 278 a month . By the time you read all the fine print and don't go for the standard model it was prob twice that . The sales girl from Audi North Dublin had my head wrecked and heart broke trying to get me to take the car .
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Post Options Post Options   Thanks (0) Thanks(0)   Quote SuperDave84 Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 2:55pm
Exactly. They call it "interest free" but as everyone knows if you want to buy a new car for cash, the price is negotiable. If you go onto PCP, there's nothing negotiable about it.

Put it like this: if the car costs €24k list price, the deal is likely something like a deposit of €3k, €250 per month for three years and a €12k final payment, or alternatively hand the car back.

But if you go in for a cash deal, you'll be able to negotiate down the €24k. That effectively takes away the "interest free" element of things.

It makes much more sense for me anyway to buy a three year old car for €12k than it does to pay €12k over three years for a new car. Three more years down the line from the first scenario, you still have a car, you've paid €12k (plus interest, admittedly), but you own it free, and it is worth something, almost certainly more than you will have had to pay on upkeep. Second scenario, you have paid €12k and you have literally nothing left to show for it.

The upshot, I suppose, is three years of hassle free motoring, but chances are you'll have the same from years three to six in a second hand car, unless you are doing bigger miles. Most cars don't start to run into expensive maintenance problems until about 150,000km, and most people don't do more than 25,000km per annum, unless they have long commutes. And obviously PCP plans penalise high mileage too, so it's hard to even count that as a benefit.

PCP was devised by car manufacturers as a way of keeping new car production going because cars are increasingly unaffordable relative to real levels of disposable income. It's a bubble waiting to burst.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote 9fingers Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 2:12pm
Originally posted by Shedite Shedite wrote:

Originally posted by Bob Hoskins Bob Hoskins wrote:

what happens if you miss payments?
It's a loan agreement with BOI, so I'd fall into their arrears process. Presumably some angry letters


Originally posted by 9fingers 9fingers wrote:

Originally posted by Shedite Shedite wrote:

Originally posted by Zinedine Kilbane 110 Zinedine Kilbane 110 wrote:

Originally posted by GB 1HughJarse GB 1HughJarse wrote:

What's the catch with PCP car finance?
You look after the car and renew it after 4 or 5 years.
I presume you have to pay another lump sum, or can you just keep paying the same €250 or €300 a month?
If you want to own it outright you have to pay a lump sum?
So unless you want to pay a lump sum at the end you'll always end up "hiring" your car?
What if you haven't looked after the car and the value isn't what you signed for at the start of the initial term?

Elon Musk said by 2025 most cars will be electric/hydrogen whatever and by 2030 you'll have to pay someone to take away your petrol/diesel car.


This sums it up really good.

At the end of the day you are "hiring" a new car for a set period - normally 3 years.
Most cars lose 50% of their value after 3 years but if you like driving a new car thats your call.

But if you want value for money you are better off buying a car that is 3 years old.
Lets say for example the car is £30K and you hire it for 3 years and it loses 50% of its value after 3 years and financing costs are zero.

Option A- Hire for 3 years and pay £15K over 36 monthly installments. You give the car back or can buy it for £15K
Option B - Buy a 3 year old car for £15K and pay off your loan over how many years. You own the car until it dies.
You don't really think of it as hiring though. It's a finance agreement for a car that I own. I can do what I want with it, I can repaint it, put in bucket seats, insure it, tax it etc. It's a finance agreement.
You sure about this???
Which part? There's a number of options after the 3 years, if you're planning on paying the final payment and keeping the car, then yeah, it's yours to do as you please. 

Obviously if you plan on trading it in for a new car after 3 years then you'll only get the GMFV which is pretty low for a 3 year old car.

On any PCP agreement I've seen;
1. It's not your car, in the same way as if you lease a house it's not your house.
2. You cannot modify the vehicle.
3. You cannot paint the vehicle, all repairs & alterations are to be done by the garage you purchased in & only them. Same with servicing and any other mechanical repairs/work
4. You're limited to certain mileage or face extra charges when the lease is over.
4. Any scratches etc will face extra charges when lease is up
IMO PCP agreements only benefit the garage, if it benefitted the customer financially it simply wouldn't exist.
That said it has boosted new car sales which was badly needed, and to a certain extent slowed the amount of imports from Britain.
An accountant & poster on here advised a few years ago
1. Credit Union loan
2. Bank loan
3. PCP
In that order
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Shedite Quote  Post ReplyReply Direct Link To This Post Posted: 21 Jun 2017 at 2:03pm
Originally posted by Bob Hoskins Bob Hoskins wrote:

what happens if you miss payments?
It's a loan agreement with BOI, so I'd fall into their arrears process. Presumably some angry letters


Originally posted by 9fingers 9fingers wrote:

Originally posted by Shedite Shedite wrote:

Originally posted by Zinedine Kilbane 110 Zinedine Kilbane 110 wrote:

Originally posted by GB 1HughJarse GB 1HughJarse wrote:

What's the catch with PCP car finance?
You look after the car and renew it after 4 or 5 years.
I presume you have to pay another lump sum, or can you just keep paying the same €250 or €300 a month?
If you want to own it outright you have to pay a lump sum?
So unless you want to pay a lump sum at the end you'll always end up "hiring" your car?
What if you haven't looked after the car and the value isn't what you signed for at the start of the initial term?

Elon Musk said by 2025 most cars will be electric/hydrogen whatever and by 2030 you'll have to pay someone to take away your petrol/diesel car.


This sums it up really good.

At the end of the day you are "hiring" a new car for a set period - normally 3 years.
Most cars lose 50% of their value after 3 years but if you like driving a new car thats your call.

But if you want value for money you are better off buying a car that is 3 years old.
Lets say for example the car is £30K and you hire it for 3 years and it loses 50% of its value after 3 years and financing costs are zero.

Option A- Hire for 3 years and pay £15K over 36 monthly installments. You give the car back or can buy it for £15K
Option B - Buy a 3 year old car for £15K and pay off your loan over how many years. You own the car until it dies.
You don't really think of it as hiring though. It's a finance agreement for a car that I own. I can do what I want with it, I can repaint it, put in bucket seats, insure it, tax it etc. It's a finance agreement.
You sure about this???
Which part? There's a number of options after the 3 years, if you're planning on paying the final payment and keeping the car, then yeah, it's yours to do as you please. 

Obviously if you plan on trading it in for a new car after 3 years then you'll only get the GMFV which is pretty low for a 3 year old car.
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