PCP
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Joined: Mar 2002
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From: Ulaanbaatar
PCP
It's been a while since I've visited here and posted something useful, so here goes...
I was talking with a chap recently and the conversation got around to cars (doesn't it always?) and I mentioned about my interest in an i3 on PCP. He said a good friend of his had recently returned a premium German marque at the end of its PCP term. The dealer, who supplied the car on the deal, offered £4k less the the 'agreed' future value. Why? In the small print was a clause stating that if the manufacturer released a facelift or revised model of the car during the term of PCP agreement, the future value of the vehicle would be adjusted to reflect its change in value.
I'm not sure how the situation was resolved, but one to watch given the regularity with which most contemporary cars are 'revised'.
I was talking with a chap recently and the conversation got around to cars (doesn't it always?) and I mentioned about my interest in an i3 on PCP. He said a good friend of his had recently returned a premium German marque at the end of its PCP term. The dealer, who supplied the car on the deal, offered £4k less the the 'agreed' future value. Why? In the small print was a clause stating that if the manufacturer released a facelift or revised model of the car during the term of PCP agreement, the future value of the vehicle would be adjusted to reflect its change in value.
I'm not sure how the situation was resolved, but one to watch given the regularity with which most contemporary cars are 'revised'.
Registered User
Joined: Apr 2003
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From: Chester
Something sounds suspect in that.
The reason PCP exists is to be a cheaper entry to getting a car of a given type whilst keeping the customer on the teat of a finance scheme that the vendor can make money on.
That wouldn't so much burn the bridge as nuke it!
That smacks of the dealer / customer relationship having totally broken down, the dealer knows they'll never get the customer back / trying to recover some sort of funds
The reason PCP exists is to be a cheaper entry to getting a car of a given type whilst keeping the customer on the teat of a finance scheme that the vendor can make money on.
That wouldn't so much burn the bridge as nuke it!
That smacks of the dealer / customer relationship having totally broken down, the dealer knows they'll never get the customer back / trying to recover some sort of funds
Joined: Mar 2004
Posts: 23,291
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From: Nottingham
i recall a dimwit at work quite a few years ago. Got a Focus, not even a good one (if it exists) on the never never. i'm sure the drivers door had been painted.. anyway
few years down the line got a new job, company car. Ford wanted £4k to take the car back.
it cost him more than my 1500 mile s2000 at the time over a few years.
he "needed 4 seats" though.. errr look - over there.. there's a point!
i think it was called ford options... ford robbery
few years down the line got a new job, company car. Ford wanted £4k to take the car back.
it cost him more than my 1500 mile s2000 at the time over a few years.
he "needed 4 seats" though.. errr look - over there.. there's a point!
i think it was called ford options... ford robbery
Member
Joined: Apr 2004
Posts: 33,838
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From: Sunshine Coast - England UK
I dont fully understand PCP.
Is the deal generally that you pay a chunky deposit, low monthly payments and you basically give the car back at the end, or do you always end up with some money back at th end, as you've been paying over the guaranteed value?
Is the deal generally that you pay a chunky deposit, low monthly payments and you basically give the car back at the end, or do you always end up with some money back at th end, as you've been paying over the guaranteed value?
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Joined: Mar 2001
Posts: 31,181
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From: Hertford
The idea was, you set the final balloon payment sufficient to give you enough equity for the deposit on the next car on a replacement plan, so they'd got you hooked on the never-never for ever and ever.
But it can go terribly wrong if values fall out of bed.
The amount of delinquent/underwater sub-prime car loans in the USA is likely to blow up a bubble at some point.
It worked very well on my first MX-5. Balloon leases were only available to business users back then...
But it can go terribly wrong if values fall out of bed.
The amount of delinquent/underwater sub-prime car loans in the USA is likely to blow up a bubble at some point.
It worked very well on my first MX-5. Balloon leases were only available to business users back then...
Joined: May 2006
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From: In Bed..... fordshire
We got my wife's Seat on PCP and paid a higher deposit so the monthly payment was only £99
A different Seat dealer were trying to get me into an Cupra FR Estate for a £5,000 depost.....but on a lease! Took my money elsewhere.
I'm ambivalent to PCP as a concept, if it works for you, use it. If it doesn't, don't.
ETA: to Nick's point, this is definitely why they moved away from "Guaranteed Future Value" as people were understandably pissed off when they didn't get what they thought they were going to get at the end. Of course, it only makes a real difference if you walk away completely - which the majority of PCP buyer's don't do, they put the money into the next car so never really see a "loss"
Last edited by GarethB; Feb 10, 2017 at 06:10 AM.
Joined: Oct 2006
Posts: 11,445
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From: Plymouth
I never heard of anyone with any equity left at the end of a PCP.
You can however manipulate these schemes quite easily.
Often dealers offer an attractive deal to sign you up on a PCP, or even a finance agreement (regular Hire Purchase).
Sometimes a huge cash bung, discount, service plans or similar.
What I did was negotiate hard, take the HP option and a couple of weeks later just pay the whole thing off in cash.
They get VERY pissed off when you do this but nothing they can do - you are entitled to a settlement at any time.
Its just that very few people ever do this.
The only thing I saw that had clawbacks in the small print was where the SEAT delear would only offer two years servicing as an incentive to PCP.
In there they state they will terminate the 'freebies' if you pay it down.
But generally its a winner
Perhaps its why the cock-ends at Plymouth Ocean BMW don't lke me haha
You can however manipulate these schemes quite easily.
Often dealers offer an attractive deal to sign you up on a PCP, or even a finance agreement (regular Hire Purchase).
Sometimes a huge cash bung, discount, service plans or similar.
What I did was negotiate hard, take the HP option and a couple of weeks later just pay the whole thing off in cash.
They get VERY pissed off when you do this but nothing they can do - you are entitled to a settlement at any time.
Its just that very few people ever do this.
The only thing I saw that had clawbacks in the small print was where the SEAT delear would only offer two years servicing as an incentive to PCP.
In there they state they will terminate the 'freebies' if you pay it down.
But generally its a winner
Perhaps its why the cock-ends at Plymouth Ocean BMW don't lke me haha