OMO: PCP Do's and Do Nots?

[Owenski]

Morning all and a happy new year!
So its been nearly a year (if not longer) since I last posted on here but that's largely been due to a new job which I started this time last year and the arrival of our 2nd baby.
The baby is doing well and the job has done well for me but I'll be leaving the job at the end of the week.


The new new job comes with a car requirement, the company options are terrible but the allowance is quite reasonable. So I've sorted myself out a PCP deal but before I pass the point of no return I thought I would try and tap into the collective knowlage of the org and see if you ugly lot are as useful with these sorts of things as you used to be so...


Have you had a pcp deal? Did you find out anything that fits into the "I wish I had known that before" category?
Do you work for a dealership (looking at you Lozzo) and have any insider "check they don't..." type advice for me?


Oh and how do? to those who know me from before and hello to all those I've yet to be aware joined the fold during 2014.

[maviczap]

Not sure if this is the same subject, but look a this thread?

http://forums.sv650.org/showthread.php?t=215132

[suzukigt380paul]

Morning all and a happy new year!
So its been nearly a year (if not longer) since I last posted on here but that's largely been due to a new job which I started this time last year and the arrival of our 2nd baby.
The baby is doing well and the job has done well for me but I'll be leaving the job at the end of the week.


The new new job comes with a car requirement, the company options are terrible but the allowance is quite reasonable. So I've sorted myself out a PCP deal but before I pass the point of no return I thought I would try and tap into the collective knowlage of the org and see if you ugly lot are as useful with these sorts of things as you used to be so...


Have you had a pcp deal? Did you find out anything that fits into the "I wish I had known that before" category?
Do you work for a dealership (looking at you Lozzo) and have any insider "check they don't..." type advice for me?


Oh and how do? to those who know me from before and hello to all those I've yet to be aware joined the fold during 2014.get a cheap bank loan(tesco etc)cheaper all round,the car will be yours from day one,you can service it where you like and sell it when you like,and it will end up much cheaper long term,for most using pcp means you will be paying for a car/cars for the next 20 years and finish up with nothing to show for £200 or more a month for that period

[Dipper]

get a cheap bank loan(tesco etc)cheaper all round,the car will be yours from day one,you can service it where you like and sell it when you like,and it will end up much cheaper long term,for most using pcp means you will be paying for a car/cars for the next 20 years and finish up with nothing to show for £200 or more a month for that period

This could make sense especially if you're happy to go with a second hand car and avoid the huge first year or two's depreciation...

[Owenski]

I've covered all that ground before deciding on the PCP, the reasons for which are as follows.

The loan method only really works if you're buying a car under 10k, other wise the payments each month are the same as on PCP and your servicing maintenance costs obviously increase the older the car is.
A new car may be more expensive at the onset but you do save a lot of that money in maintenance and running costs over older vehicles. Yes the new "forecourt tax" is quite a kick in the teeth but by not paying the RRP and negotiating a better price can save you that difference anyway... which is exactly what I'd already done with a the qashqai earlier this year and I've done again with Audi this time.

The car I've arranged is an Audi A3 184 S-line 5dr and for note my car allowance is £375/month giving my a rough budget to aim for of £400 a month. This car at RRP is around £27k, plus the extras and they're asking nearly £30k inc extended 4yr warranty. To get that car there are a number of none lottery winning options:

A bank loan -
For £30k over 4 years is £720 a month but you do own the car outright from the start and potentially selling the car could clear off the loan if I want. However that puts me over double my allowance over the same period. Alternatively to get the repayments lower I could opt to take it out over a longer period but the max is 60months at £600/ and that's still £200 over the budget and at the end of the loan I've paid out over £38k

Leasing:
As you know leasing is an upfront payment (on this car its around 2k) and monthly payments are £400 if managing the maintenance etc myself to keep it in comparison of the bank loan. At the end of the 48month lease I return the car and have nothing to show for the outlay. I wrote this idea off right away if would prefer to have the company car in this instance.

PCP:
As with the lease I pay a deposit (£2k) however as its a purchase I do own the car and have the log book etc in my name. The deal I negotiated had the monthly repayments at £400 a month over again 48 months by which time I have spent £21k. Its at this time I will have £12k still to pay IF I want to keep the car. If I don't I can simply give it back. If I do decide to retain the car then I have to pay off the £12k. I'll still be getting the allowance and so I'll look to pay off this £12k with a bank loan. Those repayments would cost me barely over £500 over the loan amount and so total paid for the car would be £34k again selling the car should pay off the loan amount give or take.

So in simple terms to get THIS car I either:
Bank Loan - Total cost £38k over 5 years
Lease - Have nothing to show for having paid out £20k
PCP - Total cost £34k over 7 years with an option to bail out anytime after 4years by selling the car.

[Owenski]

Many reasons for going for a new car are mainly due to experience, 2nd hand cars have only ever cost me money above what I budgeted. For example I've had a 3 series before that I took a loan out for. The loan repayments were about my budget the remainder of which I put to one side each month. Then general issues began causing bigger and bigger bills before I had little choice than to sell the car pay off the loan and buy a cheap run around... then another... then another etc you get the picture. However my wife shortly before I bought the 3 series bought a brand new golf, she made her payments and ran the car. Only this year has that golf been sold and outside of MOT and consumables the only expense we have ever had is for a rear brake calliper that died.

[Owenski]

In short, I've done my homework and the PCP is the best deal for me to get what I want. Unfortunatly I don't know anyone who has had a PCP who can advise me (which is what I was hoping the org could do) on what hidden hazards I should perhaps be aware of before signing on the dotted line.

[Sir Trev]

Before you decide either way check to see if there are any conditions of your car allowance. Back when I gladly handed back my lease car and took the cash (saving shed loads) there was a clause that you had to have a "reasonable" vehicle for your role. Open to interpretation I know but some colleagues were hassled by HR after a while as their cars were basically scrapyard dodgers.


As Paul so delicately said PCP schemes are great for people who want to keep the feeling of the company car and the benefits (frequent refresh, maintenance deals) but don't mind the lack of asset at the end of it. Bear in mind as well that the larger the deferred amount is the more interest you pay on it. If you're happy to keep a smaller/lower spec car for five or six years go for a two or three year bank loan and once paid off keep making the payments but into a deposit account and use it for the next car. About the same overall cost but you are running the show and not a lease company.


(post overlap!!) Looks like you've done a good job of considering your options. If you're set on a car like that and don't have a sizable deposit it looks like you're doing the right thing.

[Owenski]

Not sure if this is the same subject, but look a this thread?

http://forums.sv650.org/showthread.php?t=215132



Hiya Mavi, how you doing pal?


Thanks for the link, I did check out Drive the deal before approaching Audi directly. I showed the audi salesman my research/homework inc the drive the deal page and we agreed quite quickly a better deal than they offered we beat it down even further when I returned to the dealer in late December... Apparently December is the best time to negotiate a deal as the targets they have do not reflect the drop in sales on the run up to xmas. Something I will MOST CERTAINLY use to my advantage in future.

[Owenski]

Trev (another blast from the past, glad to see you're knocking about still).
The terms do indeed state the very same, they specifically state the car cannot be older than 7years. Along with a few other statements such as "Car must comfortably fit 4 adults travelling a distance of 125miles" amongst others.


Another reason a cheap run around is a not a viable option assuming they rigidly enforce those requirements.

[NTECUK]

Because we get a big Fat discount through Nissan I have my car on PCP.
The mileages the killer as well 6,000 pa is never going to work for me and the mrs who goes miles with dog shows and before that family(though thats now stopped for obvious reasons).
I keep the car for two years in general ,Though I did out one after 6 months

[Luckypants]

Not sure if this is the same subject, but look a this thread?

http://forums.sv650.org/showthread.php?t=215132

Hiya Mavi, how you doing pal?


Thanks for the link, I did check out Drive the deal before approaching Audi directly. I showed the audi salesman my research/homework inc the drive the deal page and we agreed quite quickly a better deal than they offered we beat it down even further when I returned to the dealer in late December... Apparently December is the best time to negotiate a deal as the targets they have do not reflect the drop in sales on the run up to xmas. Something I will MOST CERTAINLY use to my advantage in future.

Matt

I have ordered a car through our company scheme in the end as that works out better for me financially. If the option of a company car was not there (albeit funded by me) then I think a PCP would have been the best option as I did not want to put in a large deposit. As you rightly say you can get some deals by shopping around and playing hard ball, but even the end of the month deals could not beat the (net of tax and BIK) monthly payments for our car scheme.

One interesting thing I did find out is that the lease companies get 20-25% discount on retail price so that is the price to shoot for IMO. Why shouldn't we get 20% off? However the best discount I managed was about 12% through drive-the-deal.

[L3nny]

Many reasons for going for a new car are mainly due to experience, 2nd hand cars have only ever cost me money above what I budgeted. For example I've had a 3 series before that I took a loan out for. The loan repayments were about my budget the remainder of which I put to one side each month. Then general issues began causing bigger and bigger bills before I had little choice than to sell the car pay off the loan and buy a cheap run around... then another... then another etc you get the picture. However my wife shortly before I bought the 3 series bought a brand new golf, she made her payments and ran the car. Only this year has that golf been sold and outside of MOT and consumables the only expense we have ever had is for a rear brake calliper that died.

I understand where you're coming from with regards to maintainence but you'd have to take be very unlucky to spend more in maintainence on a 5ish year old car then you would lose in depriciation on a new one.

I've been trying to convince myself for the past year a brand new car will work out cheaper but the sums just don't add up.

[Luckypants]

I've been trying to convince myself for the past year a brand new car will work out cheaper but the sums just don't add up.
I agree, but I've put up with me old shed long enough and I've only ever had one new car before. So for me want has overridden economics.( Although the new motor vehicle should do twice the mpg of current shed)


Sent from my HTC One

[maviczap]

Hiya Mavi, how you doing pal?.

Sorry didn't see this yesterday, yep I'm fine.

new baby, new job still got time for cycling?

[keith_d]

I saw the title of this thread and completely misunderstood. I thought it was referring to 'Angel Dust'

http://en.wikipedia.org/wiki/Phencyclidine


Maybe I'm just showing my age.

Keith.

[Owenski]

I agree, but I've put up with me old shed long enough and I've only ever had one new car before. So for me want has overridden economics.( Although the new motor vehicle should do twice the mpg of current shed)


Sent from my HTC One


Similar for me the 184 is the car I WANT and I'm after the best way to get that car. They're isn't a 5yr old 2nd hand option, I could maybe get a 2/3 year old one but the price of nearly new against the PCP deals on New ones which I did look into meant a saving of around £25 a month or as I saw it £1200 over the 48 months which wont even pay for the 4 new tyres I'll need no doubt need thanks to the previous owners use. Not to mention the other things like brakes etc.



Mavi,
No in honesty, the pushbike hasn't been off the hooks in 2014 at all. Partly because this job that I finish this week is much further from home than previously when I used to commute... however the new new job I start in 2 weeks is even closer than I used to commute plus they have showers so I most certainly will be doing it in 2015.

[maviczap]

Mavi,
No in honesty, the pushbike hasn't been off the hooks in 2014 at all. Partly because this job that I finish this week is much further from home than previously when I used to commute... however the new new job I start in 2 weeks is even closer than I used to commute plus they have showers so I most certainly will be doing it in 2015.

That's good, 2014 wasn't a great year for my cycling, hopefully this year will be better