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Cash vs PCP


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I'm pcping recently because I'm now at a point in my life where I need the certainty of cost and service that it brings.

I like Toyota so I am hoping they'll always have something I want to rollover into.

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PCP’ing has worked out well for me over the last year. I’ve just sold my Corolla and had enough equity to get my full deposit back plus just over £500 on top. I appreciate this will not be the norm though and the next PCP I start in May will not bring the same result. 
 

 

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1 hour ago, Kental said:

0% has ended, now 1.9% but deposit allowance upped to £1250

The GFV on a TS 2.0 GR Sport has risen £2000 so that should bring down the PCP monthly figure quite a bit. 

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51 minutes ago, Reilly said:

That's helpful, but what happens after the 3 years is up and you're still waiting for your new car.  Do you keep paying the monthly sum for it? I thought you'd either have to buy it out or hand it back after the three years.

At the end of 3 years, you would have a huge balloon payment (GFV) to make if you want to buy out the car. Else you roll into another PCP- essentially it puts you on a PCP chain if you can't pay the final payment. Surprisingly, when it is rolled into a new PCP, you lose benefits (eg the benefit accruing to you as the car is usually of more value in the retail market than the GFV). So if you can afford and if the car is more valuable than the GFV, buy out, and sell online/privately and pocket the excess cash and start a new PCP. Car makers are keen to get you in the PCP chain- so when you come back you will get better PCP deals vs rolling into a newer one.

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1 hour ago, Spo2 said:

At the end of 3 years, you would have a huge balloon payment (GFV) to make if you want to buy out the car. Else you roll into another PCP- essentially it puts you on a PCP chain if you can't pay the final payment.

Exactly what a lot of people forget - the CBP at the end of the PCP agreement they signed.

I don't often change vehicles so the C-HR will be a keeper.

I made sure I did the sums & saved up first ( lockdown & Covid helped ) so the CBP is sitting in a savings account before ordering a new car.

I'm financing the C-HR on Toyota's PCP as its 0% over 3 years & they had £1k deposit contribution.

CBP = Crippling Balloon Payment.

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4 hours ago, Reilly said:

That's helpful, but what happens after the 3 years is up and you're still waiting for your new car.  Do you keep paying the monthly sum for it? I thought you'd either have to buy it out or hand it back after the three years.

No you carry on paying the monthly payments until the end of the term of the old car ie if last payment is the 1st September for the old car and on the 1st of October you start paying the new monthly payments for new car even though you still have the old car.

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8 hours ago, StreetHawk said:

Same here.. just sold my Corolla and now driving a VW Up until the new Corolla arrives. 
 

The value of it had started declining week on week so didn’t want to risk waiting until end of May to sell. The Up is surprisingly good, did a 2 hour mostly motorway drive yesterday and it handled it easily with three of us on board. Not so good when collecting the shopping earlier today, had to pile some up on the back seats around my youngest! 
 

Will definitely appreciate getting back in a Corolla when it arrives.

The VW Up! is a great little car. Had one for a few years, and Skoda Citigo before that, never let me down and surprisingly decent on the motorwaty.

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10 minutes ago, Mikw said:

The VW Up! is a great little car. Had one for a few years, and Skoda Citigo before that, never let me down and surprisingly decent on the motorwaty.

I have only driven VW C segment cars, and i feel they have good noise insulation and quiet cabins. I had latest Kia CEED which was much better than Golf in every way but had lots of tyre and road noise coming into the cabin. One of the reasons that I sold that and got C-HR.

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Im due for my final payment until November. But would like to keep the car and dont want to trade it again and be on the non stop loop of paying.  Does the dealership do financing again for the final payment? Or you have to pay it outright? Or better look somewhere else to get it finance like a loan? Sure depends on the interest rates at the moment. 
i have been trading and part exchanging my  5 Toyota’s  now and need to stop and own it outright.  Did not have a chance to save for the the final payment. Due to increasing demands in everyday living. 

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37 minutes ago, Auris2010 said:

Im due for my final payment until November. But would like to keep the car and dont want to trade it again and be on the non stop loop of paying.  Does the dealership do financing again for the final payment? Or you have to pay it outright? Or better look somewhere else to get it finance like a loan? Sure depends on the interest rates at the moment. 
i have been trading and part exchanging my  5 Toyota’s  now and need to stop and own it outright.  Did not have a chance to save for the the final payment. Due to increasing demands in everyday living. 

A cash loan would be better than any other PCP or auto loans. It would be cheaper and the loaning party will have claim to the cash you borrowed not the car. 

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43 minutes ago, Spo2 said:

A cash loan would be better than any other PCP or auto loans. It would be cheaper and the loaning party will have claim to the cash you borrowed not the car. 

Thats probably my plan, would get a loan to pay for the final payment. But would wait and compare what The dealer would offer. 

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You say you lose the benefits of equity if you rollover but it's not quite that clear cut.

When we rolled my wife's Fiesta over to a new one she paid a deposit which was equal to the cost of the upcoming service we didn't have to do, and carried on paying the same monthlies.

Dealers want to keep you as a customer so they'll massage the figures.  

So in that sense what you see on bill of sale doesn't really matter as long as you end up happy with the deposit and monthlies you're paying.

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This might be a younger generation thing but I have started to always use PCP and see the car as more of a contract like a mobile.

I never pay a deposit out of my own money, take the car on a 4 year PCP then after a couple of years when I inevitably get bored of it I'll use the voluntary termination, hand it back and get another one.

My grandad would be rolling in his grave at me doing this but it suits me quite well.

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20 hours ago, StreetHawk said:

The GFV on a TS 2.0 GR Sport has risen £2000 so that should bring down the PCP monthly figure quite a bit. 

Wow that’s a jump 

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23 minutes ago, Kental said:

Wow that’s a jump 

Looking at it again the figures quoted on the representative example are at 3k miles per annum whereas before they quoted at 8k mpa so it’s not like for like.

There appears to be a glitch in their system and you cannot select the expected mileage to change the quote. 

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11 hours ago, Auris2010 said:

Or better look somewhere else to get it finance like a loan? Sure depends on the interest rates at the moment. 
i have been trading and part exchanging my  5 Toyota’s  now and need to stop and own it outright.  Did not have a chance to save for the the final payment. Due to increasing demands in everyday living. 

My feeling on this:

The dealer/Toyota would be more than happy to finance a new/another car, but I don't see them as being in the business of financing a used car that he/they are not selling.

I think you'd be better starting with your bank, in the past I have had great car financing from my bank, essentially because I had a mortgage with them. Failing that you would be best looking for a loan brokering service.

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If paying off the final sum to keep the car wouldn't you just get a loan from wherever you can get the best deal?

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45 minutes ago, Yugguy1970 said:

If paying off the final sum to keep the car wouldn't you just get a loan from wherever you can get the best deal?

Absolutely, go online and compare current personal loan rates. Check your eligibility and go from there. 

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1 hour ago, StreetHawk said:

Looking at it again the figures quoted on the representative example are at 3k miles per annum whereas before they quoted at 8k mpa so it’s not like for like.

There appears to be a glitch in their system and you cannot select the expected mileage to change the quote. 

The Design has gone up by a few hundred pounds on 8k like for like.

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Supermarkets banks like Tesco , Asda M&S are offering one of the best personal loans with lowest interest, easy to take too. I had previously from Tesco at 2.9%, the best part of all financing is when you paid off and keep the car without paying anything monthly, just fuel and enjoy., another reason why I don’t want to buy a new car, plus my one still drives fine and efficiency is good, basically there is no benefit of replacing it. If you bought a Toyota, just keep it for 10 years at least., they are ageing well like whiskey 🥃 

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3 hours ago, Hardy888 said:

This might be a younger generation thing but I have started to always use PCP and see the car as more of a contract like a mobile.

That's why the car manufacturers invented and promote PCP, they are in the business of selling new cars and PCP gets the buyers nicely back in their dealership regular as clockwork buying a new one every few years.  The customer using a regular 36 month PCP might buy 3 new cars over 10 years, the person buying outright is unlikely to be changing cars that frequently, maybe 2 or even just 1 in the same period.

I'm sure it's got its benefits but it's an expensive way to run a car.

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15 minutes ago, AJones said:

The customer using a regular 36 month PCP might buy 3 new cars over 10 years, the person buying outright is unlikely to be changing cars that frequently, maybe 2 or even just 1 in the same period.

I'm sure it's got its benefits but it's an expensive way to run a car.

The last statistic I saw for that, where I am in France, was average 8 years ownership for a new, or nearly new car. My last two were 8 and 6 years of ownership.

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My last vehicle I kept 13 years & only got rid as it needed repairs that where far more then the market value of the vehicle - current one will be gone before 4 years due to known quality / build issues plus an expensive maintenance bill is looming! 

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I've always kept my vehicles for years before buying a new one. I tend to buy one, then then essentially run it into the ground before getting rid of it via a scrapyard.

Requirements have now changed and I need to replace my vehicle every 5  years, so PCP now works for me, whereas before it didn't. I suppose it depends on personal circumstances really.

 

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