Not if you do the 'Carlsberg' trackdays like me. Champagne, hookers and Charlie. Soon mounts up......
The profit margins on new bikes and cars are very low. There isn't a lot of room for them to give money off.
Not necessarily. Most PCP schemes offer a GFV (Guaranteed Future Value) that is agreed at the outset. In some cases I know of individuals where the dealer has offered a higher than agreed GFV for the vehicle at the end of the payment period that exceeds the balloon payment as opposed to just matching it. You can then opt to sink the difference into a new deal (which is what they are banking on) or pocket it, hand the car back and walk away. I know of at least two instances where people were offered just such a deal by Land Rover. They both renewed their contracts for new vehicles.
One other point worth mentioning is that in the event your car is written off, following a non-fault accident, the other party's insurance would only offer you "book value" for the car, which may not be as much as the GFV from the supplying dealer, if you were nearing the end of your payment period (say 36 months down the line). It would pay to take out some form of Gap insurance, so you could at least pay off the difference in the balance owed to the finance company, if you received less than the GFV as a settlement.
Only if the dealer knows the buyer is the sort to spend more time polishing it than riding it. Like was mentioned earlier everything is pushing towards 'rent a vehicle service' in some form but there's still a bit of friction to the idea because bikes are a bit more of a cherished item than cars which are mostly an accepted utility now that people are happy to think of it as a monthly cost. It's always going to be better to get a cheaper bank loan but in terms of making expensive items affordable to the average person PCP is a great option to have. My first 1199S was a PCP deal and it worked out pretty well for how much use I got out of it. I was sad to give it back at the end of it and was very tempted to keep it and give them the lump sum as I only really used it for two years but I needed the money elsewhere. I think it's the ease of it all that makes it worthwhile. I got one of the best road and track bikes on the market brand new and it cost me £4k a year or £330 a month. I pretty much learnt to ride on it, went all over Europe and did a shed load of trackdays so doesn't bother me I dont 'own' anything at the end of it. The V4 example above looks very expensive, I'm not committing to extra debt at the moment as I'm maxed out on the car and also want to wait for the R next year.
True, you will inevitably only get market value for the bike at trade in but after three years you should have enough equity sunk into the agreement, to be able to settle the outstanding payment if you choose not to keep it, with whatever the bike is worth at that point. One of the reasons why the small print dictates an annual mileage and that the bike be regularly serviced and kept in fair condition (accepting wear and tear). That's not to say a GFV is not possible on a bike PCP deal. Depends on the finance company and to some extent the dealer.
As you say, one of the biggest draws of PCP is making an otherwise unaffordable item, affordable. In the long run it's more expensive than a straight bank loan but it does mean you won't have to dig as deep into your coffers each month, which for many is the clincher. If you can afford the extra expenditure, I would always opt for a loan (ideally with as big a deposit as you can afford), which after a comparitive three years of payments to the bank, as opposed to a finance company, and providing you've kept the bike in good condition with a relatively low mileage, if you decide to sell it, you'll get the market rate at the time and most likely still have some money left over after you settle the balance. Horses for courses really.
Well the cost differential for say a V4S on PCP and one bought with a bank loan is around £80 a month, based on an average loan of £24000 at 3.2%APR over 60 months and a PCP payment of £350 per month with £1000 deposit. Quite a difference over three years, but you can at least claw some of that back if you sell the bike after that period. If you decide to keep it, in contrast, that's where the PCP system falls over, as you'll really get stung by the finance company.
The V4R is rumoured to be arriving in your nearest friendly dealer’s showroom in February/Mach 2019 but if you haven’t already got a deposit down, I wouldn’t expect to be allocated a bike from the first production run. I suspect EICMA 2018 will be the earliest you will see the full specification confirmed. Andy
GFV is on the PCP for bikes, it’s the same as the balloon payment. Just that I have never known one to be worth more when trading in. Could be a dealer helps with accessories costs etc but the values GFV and balooon tend to match or even the offer of trade in lower than balloon. Do it goes back.
My wife's Mini was on a 4 year PCP About 6 months ago - I looked at PX the mini for a new Audi Q5 and a Land Rover Evoque - both companies gave me similar PX quote which was approx £2,000 under the GFV in 18 months time... So we ended the PCP agreement early under the VT clause when I had paid 50% of car. That way I gave car back and walked away from its negative Equity. I could have continue paying the monthly payment and then given it back - but the remaining payments would have been on a car I did not want.. So PCP is definately not always good for Car's either.
Not sure about that. No mention was made to me of a GFV figure on a PCP deal I had a few years back when I had the 1199. I was merely told that at the three year mark, providing the bike was below the agreed mileage allowance and had been regularly serviced and well maintained, it's then book value would/should cover the ballon payment. GFV is a pre-agreed sum that will either match the balance owed and may well exceed it (especially if you put down a large deposit). Either way, the most important thing is however the deal is structured, you don't end up in negative equity. That's where potentially Gap insurance, as I mentioned earlier, might be a sensible option, particularly for car PCP deals.
My multi had a GFV, otherwise you’d never be able to hand it back at the end if the balloon was over the value at that point. Could you have just handed it back? They may use another phrase ‘choices: pay balance, trade in and use any excess value or simply hand back with no more to pay providing it’s maintained and within mileage’ but it’s a GFV by another name.
In essence yes it is a GFV by any other name, it's just that crucially some deals state an agreed figure on the paperwork and some do not.
My car was £19k bought on PCP with £2k deposit. Paid the PCP for 3 years then paid the balloon with a 0% credit card, took 2 years to clear. I now have a car fully paid for. If i'd have chopped in i'd still be making payments.
Both my Panigales had an agreed Guaranteed Final Value stated on the paperwork that covered the final payment?
