Rant about PCP’s and how Dangerous they can be

[Ron240]

PCP is by far and away the most popular method nowadays of private individuals purchasing new cars, because for the majority it allows them to run models that they might otherwise struggle to afford.
When the scheme began it was for brand new vehicles only then it spread to include used also.
As already said you are basically just renting the car over a pre agreed period then starting the cycle all over again with a new one. Very few people make the balloon payment at the end of the agreement and keep the car.
I do not like PCP because once you go down that route you are effectively locking yourself into the cycle.
Actually owning your own car seems to be a rare thing thing nowadays.
Buying new is my personal preference and I do this fully aware of all the implications. Including my present one I have purchased 6 brand new cars in the past 9 years and am proud of the fact that I have owned every one of them.

 

[Frontstep]

If you don't know, don't sign.


There isn't really much else to say really, if you do and your happy then great.

 

[Uncle Benz]

I saw a fella on PCP once, put his hand straight through a plate glass window and didn’t even flinch.

 

[Craiglxviii]

I saw a fella on PCP once, put his hand straight through a plate glass window and didn’t even flinch.

Broke every bone in his hand? Wouldn’t feel it for hours?

 

[steveq]

Car manufacturers and dealers seem to display the PCP monthly cost and the actual price of the car is buried in the small print.

I see that you say that your partner's commute is 2 miles. You don't say if that is each way or in total.
Assuming it is each way and the daily total is 4 miles and the monthly PCP cost is £340, the cost is an eye watering £4.25 per mile!
Another way to look at the PCP cost is £17 per working day!! That's out of your after tax income.

I appreciate that is purely looking at commute mileage and not other mileage/use. However, it also doesn't include the actual running costs: insurance, road tax, fuel, servicing, etc.

 

[Craiglxviii]

Car manufacturers and dealers seem to display the PCP monthly cost and the actual price of the car is buried in the small print.

I see that you say that your partner's commute is 2 miles. You don't say if that is each way or in total.
Assuming it is each way and the daily total is 4 miles and the monthly PCP cost is £340, the cost is an eye watering £4.25 per mile!
Another way to look at the PCP cost is £17 per working day!! That's out of your after tax income.

I appreciate that is purely looking at commute mileage and not other mileage/use. However, it also doesn't include the actual running costs: insurance, road tax, fuel, servicing, etc.

Done purposefully after a lot of customer perception clinics. Seeing £23,400 vs £227/mth? Which do you think is the easier sell..?!

 

[Blobcat]

Car manufacturers and dealers seem to display the PCP monthly cost and the actual price of the car is buried in the small print.

I see that you say that your partner's commute is 2 miles. You don't say if that is each way or in total.
Assuming it is each way and the daily total is 4 miles and the monthly PCP cost is £340, the cost is an eye watering £4.25 per mile!
Another way to look at the PCP cost is £17 per working day!! That's out of your after tax income.

I appreciate that is purely looking at commute mileage and not other mileage/use. However, it also doesn't include the actual running costs: insurance, road tax, fuel, servicing, etc.

If the commute is 2 miles, then I’d suggest shoe leather is what you should be investing in…

 

[Ron240]

Done purposefully after a lot of customer perception clinics
Seeing £23,400 vs £227/mth? Which do you think is the easier sell..?!

Yes it definitely is done on purpose...in fact sometimes the cash price is not even mentioned so one has to ask if interested.
I suppose it comes down to your personal circumstances and preference for the way you pay for things. The most popular way is for people to pay everything monthly because it is easier for them to work out their finances, however it can also be easier for sellers to get away with charging more.
They want to know what your monthly budget is then they are able to put you in pretty much any car (within reason) for that monthly payment. Of course other things need to change because of this, and it is never in the buyer's favour.
To me all I am interested in is the cash price because this is the honest figure that cannot be disguised or massaged to make it look more appealing.

 

[Rory]

Done purposefully after a lot of customer perception clinics. Seeing £23,400 vs £227/mth? Which do you think is the easier sell..?!

Took one on a Honda for daughter as it was 0% and, on top of other discounts, there was an extra £500 for taking the PCP. Salesman told us Honda wants everyone on PCP and is prepared to pay an incentive.

Sure enough, 6 months before the end date the dealer calls back and tries to presuade me to swap the car for a new one. I got him to run through the figures but he seemed genuinely baffled by why I insisted on knowing the GFV - he said it's irrelevant, as "no one" keeps their car for the full term.

To be honest, it didn't seem a bad deal - we could have turned a 2.5yrs old car into a new one for pretty well the same monthly, but I didn't go for it as it felt like a trap. The spec of the current version of the model had dropped the glass roof too.

 

[Adamki83]

Car manufacturers and dealers seem to display the PCP monthly cost and the actual price of the car is buried in the small print.

I see that you say that your partner's commute is 2 miles. You don't say if that is each way or in total.
Assuming it is each way and the daily total is 4 miles and the monthly PCP cost is £340, the cost is an eye watering £4.25 per mile!
Another way to look at the PCP cost is £17 per working day!! That's out of your after tax income.

I appreciate that is purely looking at commute mileage and not other mileage/use. However, it also doesn't include the actual running costs: insurance, road tax, fuel, servicing, etc.

I’m about to blow you’re mind….
It’s actually 1.1miles each way specially!
please don’t ask me why she doesn’t walk to work sometimes it drives me mad.

 

[EmilysDad]

I’m about to blow you’re mind….
It’s actually 1.1miles each way specially!
please don’t ask me why she doesn’t walk to work sometimes it drives me mad.

Which is about as far as EmilysMum drives each way ....

 

[Stevedol]

This makes interesting reading, especially as I've just signed up to a 4 year PCP deal on a new car, (the car itself is a story for another time, when I pick the car up next month).
My experience so far shows that the PCP market is designed to sell new cars, not used cars.

I went to a dealership to test drive a used car, (and predominantly to prove to myself I couldn't afford it), low and behold I really liked the car after the test drive, so we sat down to talk numbers.

Long story short, PCP on the used car (7 months old) was at approx 9%, whereas I knew that PCP on a new model was in the high 4%, so I asked about numbers on a new car to a very similar spec as the used one. Surprisingly, the brand new car comes in at £50 a month cheaper than the used car. OK, yes there's a few thousand more to pay off the PCP at the end of the 4 years, but that also means there's more residual value in the new car after 4 years.
Interest payments on the 2nd hand car were in the £9000 range, whereas it's £4000 odd on the new car.

Needless to say, I decided on the new car instead of the 2nd hand one, For anyone that's interested, I'll reveal what it is once I've picked it up middle of next month.

This will be my first PCP purchase, it looks at the moment to be the right choice for my circumstances, time will tell I guess. Hopefully it's not going to be a costly lesson learnt.

 

[sl500amgsport]

Hope you checked the small print on the permissable mileage and condition on return if you expect to be debt clear at the end of the term...

Sent from my SM-G988B using Tapatalk

 

[Janchee]

PCP is a strange one with Mercedes. It’s actually quite competitive because of the guaranteed future value. However, buying a Mercedes is one thing … servicing it is another!

PCP works for some and doesn’t work for others.

Next craze is Personal contract hires like you see on the website leaseloco. Deals from there are coming well, well under dealership pcp prices. If you’re not bothered about keeping the car after two/three years then it’s a no brainer.

Also, selling your car. Carbuyinggroup offered me 1.5k more for the car then dealership and that’s for it in ‘Good’ condition. Dealership we’re just gob smacked as they couldn’t even get close by £100+ per month. Started with all the ‘negative’ scaring tactics to try and keep me interested.

Don’t get me started on Webuyanycar…

 

[sl500amgsport]

We buy have offered me £1500 more than I paid for the wife's Peugeot 2008 2 months ago!

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[mioba]

If the commute is 2 miles, then I’d suggest shoe leather is what you should be investing in…

Id be using a bike if its just one person using the car instead of peeing so many hundreds up the wall for next few years.

 

[SL63 Mark]

According to Autoexpress, the retail price of a brand new 2021 Mini Cooper S Sport is £26,355. The total repayment on your loan is £27,120, so I am not sure where you would lose out, am I missing something ?

£340 per month for 48 months = £16,320 plus £9,500 balloon, plus £1,300 deposit = £27,120, so the PCP is only costing you £765 more than the cash retail price of £26,355 ? Am I missing something ?

 

[flowrider]

According to Autoexpress, the retail price of a brand new 2021 Mini Cooper S Sport is £26,355. The total repayment on your loan is £27,120, so I am not sure where you would lose out, am I missing something ?

£340 per month for 48 months = £16,320 plus £9,500 balloon, plus £1,300 deposit = £27,120, so the PCP is only costing you £765 more than the cash retail price of £26,355 ? Am I missing something ?

No one pays retail price on a new car.

 

[mioba]

If you think the finance company makes 785 and pay book price for a car, using the ex above. then thats just a pile of horse poo.

 

[SL63 Mark]

I've never bought a new car, so what sort of discount could a private buyer expect ?