Hi mate, it's blatantly obvious for the OP who started this thread that personally he was begruding/disalusioned by the whole car finance thing,as are most people who start these types of threads, cause they car jump etc or spend too much money on other areas in their life's l personaly would never start a thread on this subject matter..... It borders on personal circumstances, wages, personal debt, and it even can come over as insulting, as there's always always the same people who jump on there soap box and take the moral high ground that car debt is bad, what if this or that happens etc etc,same principles apply to houses /mortgages, you can't legislate as no one is right or wrong here, it's there money.these threads nearly always end up going Pete Tong because of the delicate subject matterHaha hang on I’m not exactly creating loads of threads telling people that pcp is the devil! I’m responding to a post about car finance,
that I had fundamental disagreements with, in a thread about car finance...!
But fine. For you matey, I’ll promise from this day forth, I’ll never post again about car finance. Just for you
Interesting though isn’t it. If I posted a way that you could all get £3500 extra discount on new car orders, you would all stand to attention like meerkats! Just saying....
Original PCP's were often sold on the basis that you ut down £xk deposit at at the end of the PCP period the GFRV will be lower than the actual value leaving you with a balance towards your next PCP deposit. If you think about it no Finance Company is going to deliberately set a GFRV lower than the real value of the car.
Definitely depends on personal finances! If you can avoid paying 6% or more on a PCP I would always avoid it. There are better deals around than Audi! Frankly if I was worried about finances I wouldn't be buying or PCPing a new Audi!
Ahh I see
Not necessarily true, and also a flawed argument.
Yea really good debate thanks!
I hope my posts come across as just voicing a different opinion (admittidely usually against more popular opinions on here...). Sometimes tone is hard to gauge in written format..!
Agree with all your points and can understand we’re you are coming from! I obviously take a slightly different approach to it all, but then I have a different attitude towards consumer debt.
A good example of why you need to listen peoples views and not get caught up in the emotional side of 1. I want that car and 2. I can afford £x a month.
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), the dealer deposit is relatively easy to secure even as a cash buyer, so the difference is about £1400 when you account for that. But £400 does little to change your overall point I mean £1400 is no small amount, but for the convenience of paying a smaller monthly fee, I can see the attraction.
Debate is always good, don't personalise it and differing views should be encouraged
PCP is a tool designed by the industry to make the car industry more money (it is a financial product after all, albeit currently unregulated).
PCP is a tool designed by the industry to enable people to 'spend' more without feeling they are spending more and get into "better" cars (see previous point).
PCP was not designed in the interests of consumers other than to make them temporarily feel good by getting a nice(r) car.
Manufacturers love PCP as it makes them money and provides a nice supply of nearly new well maintained cars, if PCP works for you and crucially you
understand it then the world is your oyster, if you don't understand it you need to look past the "for just another £100 a month I can afford..........".
For my circumstances, I bought my S3 cash, now if I could have been rsed I could have PCP'd it, invested the capital I would have used buying the car to try and make enough return to offset the cost of the PCP............as DrEskimo says above every option has risks and therefore there is no right answer. Sit down with a spreadsheet and work through the options making sure you understand them and the risks of each, if you do understand the options then you will make the right choice for you.
I live in Europe where PCP is less popular/known about and the difference between the number of expensive cars I see versus when I am back in the UK is staggering, the frequency of S/RS cars in Europe is tiny (I have seen 1 RS3/3 S3s in 3 years) in the UK I seem to see an S3 every time I go out! My local Audi dealer sees 1 S3 a year for service...........mine!!
Sounding a bit middle aged, sorry
Great point and well made.
Although if I was being pedantic (and you know I will be...
But its not just the economic argument I am making against PCP vs other types of loans, its the risk of being in negative equity and having to pay money to get out the deal should your situation change.
Lets assume you take either of the deals above, and after 18months the worst happens and you face redundancy.
Lets assume the cars trade in value is worth the GFV on the Audi Calculator after 18m/20k miles @ £25,800.
The settlement for the PCP loan after 18months would be £31,400. This leaves you a shortfall, or negative equity, of £5,600 to cover and settle the finance in full.
The settlement for the personal loan after 18months would be £23,800. This leaves you with £2k positive equity. You are able to clear the debt and have £2k back in your account.
Any finance against a heavily depreciating asset carries risk, since there is a danger the asset value falls faster than the debt you owe on it (i.e. the asset for which the best is borrowed against is worth less than the debt owed). As you can see, the PCP has far greater risk due to the structure of the loan and the proportion of capital and interest paid per month.
They are fantastic while everything is going great....but life has a habit of throwing a spanner in the works. Best laid plans of mice and men and all that...
I still can't get my head around how people on here are pulling £30-65k cash out their a***!! There should be another, more elite, forum for you guys
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