Ok, so PCP deals. I think I finally get the drift but ideally could do with a few more questions answered. So, a dealer offers me a very lightly used bike, still got 19 months warranty on it, circa £12k I offer him £4k deposit and over 3 years the monthly payments are X (cheap)+ the balloon So today I thought I'd see what it put the monthly payments 'up' to by doing it over 2 years instead, the monthly payments more than halved and the balloon went up by about £1000. OK, so I thought the payments would go up but they actually decreased by more than 50% So do they need to keep the gfv at a certain point hence why the balloon increased and there was nowhere for the monthly to go but down? Also how will it work if I want to pay chunks off the balloon prior to the end of term if they seemingly can't alter that final figure down? Maybe I'm just being thick here...... One last thing, as the bike is technically owned by the finance company until everything is paid (or given back which ideally I wouldn't do) would I be in a better position in terms of consumer rights should an issue arise when the warranty lapses and it's not a 'wear and tear' problem? My point being is that as the bike wouldn't be mine until paid for month 24 or 36, what happens if a mechanical issue arises which isn't really a fault of mine after these 18 months pass? would I be liable to fix it or would the finance company fight my corner as technically they own the bike and I'm just renting it until the balloon payment?
I don't fully understand these PCP deals, but a dealer did tell me they were mainly for those who likes to change their bikes every 2/3 years, not to keep them as you want. So maybe worth looking at finance as an option?
All PCP deals are over three years but you're right to ask the question for payments over 2 years, the bike is worth considerably more after 24 months that's why the balloon payment is considerably less and your borrowing less so monthly payments are lower. Why Ducati never give you that option is beyond me, they obviously make more money over 3 years.
Well I do fall in to the first camp of wanting to change bikes every couple of years so PCP suits in that respect. However if you consider at the cheapest monthly payments plus my £4k deposit, my 'investment' would stand at circa £4500 prior to paying the balloon. Therefore a yearly cost of £2250 which I wouldn't personally expect the depreciation to be, especially as the bike has already taken its main initial hit of circa 15% to be down at the price it is So the way I see it if the bike was going to continue to lose value at the rate of £2250 / year from me taking it on it would be Year 1 - my buy price less £2250 = 17.3% hit Year 2 - new lower value after my first £2250 hit = 20% I may be wrong and ultimately you 'could' see it as renting the bike at £2250/year + running expenses. However, at the moment I've sold my bike to free up some money for a house move in the first half of next year, so keeping monthly payments down for a few months definately suits. Also unless my math is incorrect by the time I add up the deposit + monthly (23 payments) + option to purchase fee + balloon payment.......the finance has only cost me £400 or so. Ultimately if I treated the pcp as a HP agreement but just defaulting higher payments for 6-8 months, it's only costing me £400 for that privilege. Cheap money it would seem. Or.....I walk away and at worst I've lost £2250/year if I don't fancy getting the balloon payment of £8k+ together. It just seems ridiculously cheap. What im not getting is if they have to keep the gfv figure at the end a certain level, then by me actually throwing extra money in over the term it will surely mean they'd owe me money if I did walk away? Also what about liability of mechanical issues, as I wouldn't own the bike would I be protected with support from the finance company IF something non wear and tear related happened?
Do you mean the balloon is considerably more? On this deal the monthly came down but the balloon went up by £1k as that's what they base gfv on I guess
Break down the figures. Price of the bike, deposit , monthly amount, term and gfv and I'll try to explain it
It does seem a bit of a minefield. Im not sure how you dont find yourself without a deposit in 3 years time as they just offer you what you owe on the bike. Also looking at PCP APR, the Multi base model the APR is 4.2% (pretty cheap money) but the S is 8%. I still dont get what happens also f you have a trade in bike that is worth say £9k which is way above the deposit they agree to take on PCP.
It always strikes me that the intricacies of PCP are understood by very few, myself included. If you want a shiny new bike on the drive every 3 years, and are prepared to pay a premium for it, then it makes sense, otherwise cash seems the way to go. It is a bit like buying cornflakes, buy the economy pack for less cash, or, if you can afford it, spend more on the bigger pack but with a lower price per cornflake.
As of today I nolonger own my 899. The finance company have taken it back after I rejected it. Long story see my 899 throttle stuck open thread as to why. If I had bought the bike cash it would not have been so painless. The bike is under warranty and so would probably be spending the next year in the dealers at Ducati whilst they try to fix the problem. As it was on PCP I rang the finance company explained the issue meant the bike was too dangerous to ride and dealer has done everything they can. They investigated and confirmed symptoms and attempted repairs with Ducati before "taking me out of the bike". I'm now free to look at buying another bike. My dad complains about pcp all the time. Tonight, after I told him the outcome is the first time he's ever had anything positive to say about it. For reference Black Horse see a monthly payment as equivalent to 500 miles when they calculate fair use. So 5000 miles is 10 monthly payments.
Add your deposit to your monthly payments and when you've got your total deduct it from the asking price for the bike and ask yourself this: When the agreement comes to an end,will that bike be bike worth more on the open market than the notional,"balance outstanding"? Or,is the balloon payment more than the bike is worth? PCP appears to help people buy stuff that they would not otherwise be able to afford. But rest assured it is just a selling tool,to help shift more bikes,or make more money,or tie you in to buying from a specific manufacturer. If you walk in to the dealer with your pockets bulging full of cash you'll get the best deal,either with free stuff or a discount or whatever..the dealer might not get his finance bonus,but he's sold a bike there and then and he's one bike towards his sales bonus. You can do as many miles as you want.And you can rid yourself of that bike at any time,should you choose to. Buy it on his HP agreement and if you are hard enough you can get a deal:it's Autumn,bike sales will slow,and he's got his finance bonus to play with if he wants to give you a bit off. You can do as many miles as you want.As long as you pay the finance off when you sell it,you can rid yourself of that bike at any time There's no such thing as a free lunch,and somewhere in that PCP deal is a similar amount of money in it for the dealer.Where he hides it/what he calls it is immaterial,you will be paying it.Maybe he'll make his money if you hand him a mint low mileage bike in 24 months,who knows,but he's going to get his money TriOptions is run by Blackhorse,who will make money:The dealer will make money: Ducati will make money. As the Customer,your job is to give them that money I just looked at a 2013 Monster being offered on a £200 deposit + £117 x 36 PCP deal + £89 "documentation fee". Cash price is £6799,(that includes the dealers mark-up of course) If the PCP runs full term the buyer will have paid £4501. Hand the bike in at that point and the dealer has won it back for £2298....nice work if you can get it...if you don't,he's sold the bike anyway...if you chop it in for another,whoop-de-doo he's sold another bike! Not an exact example but you get the picture I'm sure.
Just be careful. Sounds like you've done a voluntary termination. It doesn't show on your actual credit score that you can access however when finance companies search for you they are confronted with a big VT to warn them.
Na man its definitely a rejection as goods not fit. Technical inspections by Ducati and BH etc etc and compensation. They've said I'm fine to go for another bike straight away and that the 899 pcp will be registered as settled with experian as BH essentially but the bike back from me.
That's good then. Basically as you say they are buying the bike and that will cover the settlement. It's actually quite easy to reject something whether it's on finance or not if there is a true problem.
Bought a van once on a credit card. Paid my "deposit" in cash and put the balance on the card. Moved the debt around between interest free cards for two years and paid it off. (Credit companies were offering 8 to 10 month interest free deals on balance transfers at the time). The transfer fees were quite cheap at the time and less than the cost of the interest if I'd borrowed the money from a bank and vastly less than a vehicle financing scheme. Bit of a gamble. You need to know you can pay the debt off in a short period and you have to have enough cards at your disposal and hope that they will keep the interest free deals coming. I had the debt split up into four different bits at one point and you have to keep your eye on the ball. Don't know whether its feasible now. Credit isn't as cheap as it was. I wouldn't do it again. I haven't got the patience for all that juggling now. Shame I wrote the van off in a flood.. Could get two bikes in the back of it as well. Can't swing a cat in the stupid little thing I've got now.
Don’t know what bike the OP is buying but when I recently bought my 899 they said I was going to do too many miles to do a PCP deal. I had 3 grand to put down and it still ended up cheaper doing it on finance. I borrowed 7k put 3k down and the bikes mine. If id have put 3k down on pcp it wouldn’t have been and id be limited to mileage each year. The difference between the pcp repayments and the loan repayments was about £60/month. I still don’t get PCP.
