spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 Had this 'argument' on the Jag forum as lots on there do PCP, I say they don't own their car and they get all wound up basically they don't though, at the end of the day they hand the hired car back or use it as a deposit for the next one... 4 Quote Link to comment Share on other sites More sharing options...
Grundy Posted November 5, 2014 Share Posted November 5, 2014 Had this 'argument' on the Jag forum as lots on there do PCP, I say they don't own their car and they get all wound up basically they don't though, at the end of the day they hand the hired car back or use it as a deposit for the next one... Wait what, you are on ANOTHER forum?!?!?! Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 Had this 'argument' on the Jag forum as lots on there do PCP, I say they don't own their car and they get all wound up basically they don't though, at the end of the day they hand the hired car back or use it as a deposit for the next one... Wait what, you are on ANOTHER forum?!?!?! Was on it a fair bit but bored now, only so far you can go winding up a bunch of old farts... Quote Link to comment Share on other sites More sharing options...
Grundy Posted November 5, 2014 Share Posted November 5, 2014 Had this 'argument' on the Jag forum as lots on there do PCP, I say they don't own their car and they get all wound up basically they don't though, at the end of the day they hand the hired car back or use it as a deposit for the next one... Wait what, you are on ANOTHER forum?!?!?! Was on it a fair bit but bored now, only so far you can go winding up a bunch of old farts... So you come crawling back to us....pfft! Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 Had this 'argument' on the Jag forum as lots on there do PCP, I say they don't own their car and they get all wound up basically they don't though, at the end of the day they hand the hired car back or use it as a deposit for the next one... Wait what, you are on ANOTHER forum?!?!?! Was on it a fair bit but bored now, only so far you can go winding up a bunch of old farts... So you come crawling back to us....pfft! I never went away, and admit it you would miss me if I went for good 1 Quote Link to comment Share on other sites More sharing options...
Ekona Posted November 5, 2014 Share Posted November 5, 2014 Plus, depreciation isn't really an issue as at the end of the term you just hand the car back for the guaranteed value and get a new one It's not quite that simple. Unless you've spent your time saving, you'll have no deposit for a new car so you need to find that. Ah, but I can use the equity in the car as a deposit! Yeah, if you have any: Finance people don't get rich by making errors like how much a car will be worth after 3-4 years... You could end up with a couple of grand equity, but equally you could end up with nothing if the market crashes or you picked a car that nobody else wants (a pink diesel Focus is going to be hard to shift!). Or you might go to a different manufacturer as you want one of their cars instead, and suddenly your equity is gone as they won't give you what you need to clear the finance, so you have to hand the car back and start again. PCP only really works when you have a LOT of spare cash you don't mind losing, or if you know you can save enough to cover the PCP at the end. Don't get me wrong, that's how I've financed some cars in the past and I lost a load, but it was totally worth the experience and I could afford to do it. If you know you're never going to pay the PCP figure off at the end, and you never have any intention of doing so, there's an argument that says you might just as well get a lease instead. Cheaper, less risk, guaranteed end dates etc. Just my two cents, anyway. Not trying to lecture anyone as I've done the exact same thing and it was awesome, but there are pitfalls to be aware of. 1 Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 ^ yep exactly why I wind up the guys on the Jag forum, they have the spare cash and can afford to 'buy' a £60k new car, pay £600 a month for 3 years then use the car as a deposit on the next one. At least it means the likes of me car pick up a £60k car 4 years old for £19k 1 Quote Link to comment Share on other sites More sharing options...
JoshC Posted November 5, 2014 Author Share Posted November 5, 2014 (edited) Plus, depreciation isn't really an issue as at the end of the term you just hand the car back for the guaranteed value and get a new one It's not quite that simple. Unless you've spent your time saving, you'll have no deposit for a new car so you need to find that. Ah, but I can use the equity in the car as a deposit! Yeah, if you have any: Finance people don't get rich by making errors like how much a car will be worth after 3-4 years... You could end up with a couple of grand equity, but equally you could end up with nothing if the market crashes or you picked a car that nobody else wants (a pink diesel Focus is going to be hard to shift!). Or you might go to a different manufacturer as you want one of their cars instead, and suddenly your equity is gone as they won't give you what you need to clear the finance, so you have to hand the car back and start again. PCP only really works when you have a LOT of spare cash you don't mind losing, or if you know you can save enough to cover the PCP at the end. Don't get me wrong, that's how I've financed some cars in the past and I lost a load, but it was totally worth the experience and I could afford to do it. If you know you're never going to pay the PCP figure off at the end, and you never have any intention of doing so, there's an argument that says you might just as well get a lease instead. Cheaper, less risk, guaranteed end dates etc. Just my two cents, anyway. Not trying to lecture anyone as I've done the exact same thing and it was awesome, but there are pitfalls to be aware of. I can't argue with you as admittedly I don't understand car finance fully, however just a few points on that. - The deposit would be from selling my 350, would probs get 5k for it and a 3/4k deposit seems to be quite decent against a 38k car? I know finance people do make thier money somewhere, but what you say about the car not being worth anything, isn't that irrelevant if you have a guaranteed value at the end of the 36 months? Anyway, I'm not saying everyone should do it and tbh I've always said myself I never would as a car nut like me could get a lot more fun with a 10 year old japanese rocket for a lot less than a brand new car but a couple of things have swung me recently. Firstly, having gone to the BMW showroom with my mate to pick out his brand new 235i, I realised there are a lot of attractive benfits to buying new. The interiors of new cars these days have come on A LOT! His 2 series M sport and these Nismo's make my 350z interior look very poor, and I know it has always been a weak point of the Z but the difference was incredible! Also, along with the same friend my father, who has to be the most sensible person when it comes to money and finance I know, has just changed from buying 3 year old cars every time to taking out finance on an Audi with the view to get a new one every 3 years. I figured if it makes sense to him, who am I to argue! Haha! There must be enough benefits and positives in using finance for so many people to have brand new cars these days? When you see someone driving a brand new 3 series or simialr the chances they didn't have the cash to buy it outright? Edited November 5, 2014 by JoshC Quote Link to comment Share on other sites More sharing options...
WINKJ Posted November 5, 2014 Share Posted November 5, 2014 free servicing is a benefit, thats just over a grand over 3 years anyway that youc an save on for starters!! Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 free servicing is a benefit, thats just over a grand over 3 years anyway that youc an save on for starters!! Yep and also obviously the car is under manufacturers warranty the whole time too, if you want a brand new car it is one of the easiest ways to get it on the driveway but don't think you are avoiding the depreciation because you are not Quote Link to comment Share on other sites More sharing options...
WINKJ Posted November 5, 2014 Share Posted November 5, 2014 free servicing is a benefit, thats just over a grand over 3 years anyway that youc an save on for starters!! Yep and also obviously the car is under manufacturers warranty the whole time too, if you want a brand new car it is one of the easiest ways to get it on the driveway but don't think you are avoiding the depreciation because you are not yep, its horses for courses. (without doubt a cracking saying!). if you want to do it.... go for it! Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 I have always taken a small loan out when buying a car, even when I have had the cash to buy it, as I don't have a mortgage it helps the credit rating My favourite wind up with the Jag guys is when they do mods to their PCP cars, I ask them if they checked it was ok with their insurance AND the owner 3 Quote Link to comment Share on other sites More sharing options...
Daveyboy11 Posted November 5, 2014 Share Posted November 5, 2014 Surely a bank loan is better no? Better interest rates and you actually own the car. Quote Link to comment Share on other sites More sharing options...
WINKJ Posted November 5, 2014 Share Posted November 5, 2014 Surely a bank loan is better no? Better interest rates and you actually own the car. somehow I don't think he will get a bank loan for 34k? Quote Link to comment Share on other sites More sharing options...
JoshC Posted November 5, 2014 Author Share Posted November 5, 2014 Surely a bank loan is better no? Better interest rates and you actually own the car. £30kish on a bank loan is a huge amount though no? I assume you would need the full amount to purchase the car if you didn't finance it? 1 Quote Link to comment Share on other sites More sharing options...
JoshC Posted November 5, 2014 Author Share Posted November 5, 2014 free servicing is a benefit, thats just over a grand over 3 years anyway that youc an save on for starters!! Yep and also obviously the car is under manufacturers warranty the whole time too, if you want a brand new car it is one of the easiest ways to get it on the driveway but don't think you are avoiding the depreciation because you are not Genuine question then, becuase as I say I don't fully understand finance yet! - How does the depreciation affect you if you have a minimum value after 3 years and just plan to hand it back for a new model? Quote Link to comment Share on other sites More sharing options...
Daveyboy11 Posted November 5, 2014 Share Posted November 5, 2014 Surely a bank loan is better no? Better interest rates and you actually own the car. somehow I don't think he will get a bank loan for 34k? Ok I didn't know that was so bad, I could get one for £25k so I assumed it wouldn't be a problem. Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 free servicing is a benefit, thats just over a grand over 3 years anyway that youc an save on for starters!! Yep and also obviously the car is under manufacturers warranty the whole time too, if you want a brand new car it is one of the easiest ways to get it on the driveway but don't think you are avoiding the depreciation because you are not Genuine question then, becuase as I say I don't fully understand finance yet! - How does the depreciation affect you if you have a minimum value after 3 years and just plan to hand it back for a new model? The hand back value will be weighted in the dealers favour so they can still make money and the difference between what the car was new will be the depreciation Quote Link to comment Share on other sites More sharing options...
JoshC Posted November 5, 2014 Author Share Posted November 5, 2014 free servicing is a benefit, thats just over a grand over 3 years anyway that youc an save on for starters!! Yep and also obviously the car is under manufacturers warranty the whole time too, if you want a brand new car it is one of the easiest ways to get it on the driveway but don't think you are avoiding the depreciation because you are not Genuine question then, becuase as I say I don't fully understand finance yet! - How does the depreciation affect you if you have a minimum value after 3 years and just plan to hand it back for a new model? The hand back value will be weighted in the dealers favour so they can still make money and the difference between what the car was new will be the depreciation Yeah I get that the minimum value will be weighted in the dealers favour ut if you know what it is from the outset and you're happy with it then you don't need to worry about what it will be I guess? Quote Link to comment Share on other sites More sharing options...
Ekona Posted November 5, 2014 Share Posted November 5, 2014 I hate it when people multiquote to reply to posts as it looks like an argument for the sake of it, but I don't mean that here: It's just purely for ease, promise I can't argue with you as admittedly I don't understand car finance fully, however just a few points on that. - The deposit would be from selling my 350, would probs get 5k for it and a 3/4k deposit seems to be quite decent against a 38k car? Seems like an average deposit to me, no probs there bud. I know finance people do make thier money somewhere, but what you say about the car not being worth anything, isn't that irrelevant if you have a guaranteed value at the end of the 36 months? It depends. If the car is worth (i.e. what you can sell it to Joe Bloggs or a dealer for) £15K, and the PCP is £12K, then in theory you have £3K equity. You can use that to either be a £3K deposit on a new car from a dealer, or sell the car privately and pocket that £3K. If the car is only worth £12K then you have zero equity. This is exactly what the finance companies are after, as it means they got their sums right. In this case, you then need to find more deposit for a new car, or just hand the car back and walk away. At this point, you've pretty much lost everything. If the car is worth £10K but the PCP is still £12K, you're laughing. At this point you've 'gained' £2K on the deal, so you definitely want to be handing the car back at this point! Alternatively, you might want to haggle with the finance company as they don't want to be stuck with a car worth less than is owing on it, so you might be able to get it for, say, £11K. However, in this situation nobody, not a private seller nor a dealer, is going to touch your car. If you want shot to someone else, you'll have to find the extra. This is the situation you're in throughout the loan period, though. I did the first bit with my 911 a couple of months ago. Finance company saw their money, I came out with a few grand in my pocket, and my buyer got a bargain. Don't mistake 'dealer' for 'finance company': They're two different entities. I bought my car from Porsche, but the financing was with VAG directly and they would've had the car back at the end, not Porsche. Actually, it would've gone straight to auction like my brother's Cayman R did when he cancelled his agreement, but I digress. Anyway, I'm not saying everyone should do it and tbh I've always said myself I never would as a car nut like me could get a lot more fun with a 10 year old japanese rocket for a lot less than a brand new car but a couple of things have swung me recently. Firstly, having gone to the BMW showroom with my mate to pick out his brand new 235i, I realised there are a lot of attractive benfits to buying new. The interiors of new cars these days have come on A LOT! His 2 series M sport and these Nismo's make my 350z interior look very poor, and I know it has always been a weak point of the Z but the difference was incredible! Also, along with the same friend my father, who has to be the most sensible person when it comes to money and finance I know, has just changed from buying 3 year old cars every time to taking out finance on an Audi with the view to get a new one every 3 years. I figured if it makes sense to him, who am I to argue! Haha! There must be enough benefits and positives in using finance for so many people to have brand new cars these days? When you see someone driving a brand new 3 series or simialr the chances they didn't have the cash to buy it outright? People just want a new car. They don't care how they get it, even if it's financially disastrous for them ( ), as long as it's new. It's a stupid thing to do as the depreciation curve is ridiculous, but there is NOTHING like the feeling you get driving a brand-new car. Ever. Yes, you have other potential benefits like a warranty, and possibly free servicing, and maybe even a more fuel-efficient car, but the depreciation cancels all that out and more usually. Unless you're buying something like a P1 or a GT3 and you get instant appreciation, that is! In terms of ultimate common sense, buying a 370ZN on finance is daft. It's a car that isn't really loved, the styling divides opinion, it's not the star performer in this sector, it's thirsty and doesn't make a nice noise, and the interior isn't particularly great. And yet, none of that matters at all as we don't buy sports cars because they're sensible, we buy them because they're fun and they make us feel good, so if you can afford the finance and know what you're getting yourself into then I say go for it, as cars are a passion and if you love the 370ZN then that's all that matters! If I can ever get a drive sorted on one, I could well end up in one too, despite me knowing it's a stupid thing to do! Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 free servicing is a benefit, thats just over a grand over 3 years anyway that youc an save on for starters!! Yep and also obviously the car is under manufacturers warranty the whole time too, if you want a brand new car it is one of the easiest ways to get it on the driveway but don't think you are avoiding the depreciation because you are not Genuine question then, becuase as I say I don't fully understand finance yet! - How does the depreciation affect you if you have a minimum value after 3 years and just plan to hand it back for a new model? The hand back value will be weighted in the dealers favour so they can still make money and the difference between what the car was new will be the depreciation Yeah I get that the minimum value will be weighted in the dealers favour ut if you know what it is from the outset and you're happy with it then you don't need to worry about what it will be I guess? Nope you can just save up to keep the car, give it back or sort out another deal on a new car Not saying it's a silly thing to do, if you want a brand spanking new car and the sums work then it's a great way to afford a nice car with piece of mind and a fair amount of security if things go wrong Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted November 5, 2014 Share Posted November 5, 2014 (edited) Biggest gamble is if the 370z Nismo holds its value over say 3 years which is debatable. I am sure all the current owners will be along saying it is rare etc etc but that is not a gauge, if in 3 years time the standard 370z is worth half what it was new then nobody is going to pay that much of a premium for a Nismo imo but there you go... As Dan has said very comprehensibly above, either the finance company will insist on a low final payment so bigger contribution along the way or you risk loosing money at the end of the deal Edited November 5, 2014 by spursmaddave Quote Link to comment Share on other sites More sharing options...
KyleR Posted November 5, 2014 Share Posted November 5, 2014 I think the reason there is such a difference between your quote and that which your mate got in BMW is the interest. That dealer is charging around 12% APR which is ridiculous when there are 0% deals available. When I last looked at getting a Nismo I was quoted £370 per month, 0% APR with a £7k deposit and £15k GFV. Quote Link to comment Share on other sites More sharing options...
sipar69 Posted November 5, 2014 Share Posted November 5, 2014 I'm afraid your 'you don't own the car' wind up wouldn't bother me at all. PCP works just fine for me. I'm under no illusions about making any money on the deal - as I've done before, I'll hand the Nismo back in a few years and get something shiny and new. I don't think there's much point in debating whether one sort of finance is better than another - depends entirely on your circumstances. 1 Quote Link to comment Share on other sites More sharing options...
Ekona Posted November 5, 2014 Share Posted November 5, 2014 The only cars I've ever 'owned' have been my MX5 and MR2 track slags! Quote Link to comment Share on other sites More sharing options...
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