There will be a GFV on all PCP agreements, otherwise its not a PCP agreement. The positive of a PCP is that at the end of 3 years, the vehicle can either be handed back and you walk away, negotiated for a p/ex on a new one, or you can buy it at the GFV. Its not the cheapest if you wish to own the vehicle after 3 years but it is the most flexible. At the moment diesel cars are falling flat on PCPs as the s/h value is not meeting the GFVs due to the insistence of Govt that diesels have had their day. But as long as you run the full term of the agreement that is the finance companies problem and not yours. Had you bought that car outright or on a bank loan or HP, that loss in value is your problem. There is no accounting for future changes to Govt policy or s/h values when you sign up to the deal.
I've always used PCP but there is a point where it just no longer works for me, I've bought a top spec MX5 for £23K which I put £4500 down on, and it's £320 a month but the balloon is £8k and the interest is 2%, where as from memory the Ducati scheme is nearly 9%. That's the killer, I'm also one who would much rather pay more per month to keep the balloon lower but I wouldn't pay £350 a month on this to still have a massive payment left. I think the only half sensible way to buy this bike is a bank loan having saved enough to cover first year depreciation.
Pcp is more expensive for sure but you don't own the bike so when it goes wrong you should have the backing of the finance company if you are having problems getting it sorted. Also if you didn't know you couldn't extend your warranty after you brought the bike this may help you out, and gives you the option to just return it at the end if it has proven troublesome.
Has anyone ever took the PCP to get the manufacturers contribution to lower the full price (which they won't give you on a cash sale) and then terminated the pcp within 14 days consumer credit agreement keeping the lowered price but not stung with the pcp deal?
I did it on my Bmw without any problems, I did make 2 payments on the pcp and then settled, lost a bit on interest but still worked out a good saving, I was planning on paying off the finance within a week but buyer let me down on my bike and had to wait a few weeks to sell again to allow me to pay off the balance.
On cars - I know you can settle immediately - and if its within the 14 days you just pay the interest for the days from when you took ownership of the car - to the day you told them you want to settle the finance - you then have a 30 days to pay from that date - without incurring any more interest and you get to keep any deposit allowance or service packages that were part of the deal.
So a bit of internet and it appears the price quoted from the dealer is the price including the discounts offered if you take the finance. So when you take the finance the figure of the loan is what the dealer has provided not the loan company. consumer credit act means you can terminate the finance arrangement or after the 14 days you can pay off the loan PCP early incurring a little of interest...i think thats how im seeing it..
Pretty much yes. The dealer won’t like it, as any commission is clawed back and they still have to pay any ‘contribution ‘ afaik. Thing to look for is any max overpayment clause. Mostly see them in mortgages but guess they can put them in anything.
But unless there are some incentive like free servicing or deposit allowance you are saving anything by buying on PCP and then cancelling So what offer is Ducati giving for the question to have been asked?
Audi are offering nearly 3000 on a new car cheaper if you use the PCP....id rather buy with cash but will take the pcp and the lower price then cancel or settle the pcp very quickly.
Take the discount, pay whenever you like. even if you keep three months, the saving will well outweigh any interest
Wow, interesting read. I'm sure this loophole won't last too long. This'll be pissing dealers off big time if they're taking the hit. Margins aren't massive on new vehicles.
The dealer does not get hit for the refund of the deposit allowance - but they loose some or all of the commision they get paid on selling the finance. So made up numbers - but lets assume VW Finance offers £3000 deposit allowance 1 week into the agreement you notify them you will cancel and settle the finance 3 weeks later You keep the £3000 and VW loose this.. Then VW Finance cancel 90% of the dealer commision of say £500 so he just receives £50 If you settle after 3 months instead of 1 week - then maybe the dealer looses half his £500 sales fee. If you settle after 6 months the dealer keeps everything. This is how my dealer explained it to me when I asked him about 2 months ago when we bought the last car. VW Finance see it as miss selling the finance agreement as they are supposed to ensure under financial regs that the finance is the correct thing for the customer.. so they withold the commission as punishment. I believe its more complicated than above - because of the discounts and other things that go on between VW and the dealer to push stock... But that gives you the idea.
