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PCP car deal - what's the catch?

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    #11
    Originally posted by Fraidycat View Post

    3 year old low mileage used BMW 3/Merc C/Audii/Lexus are £18-£20K by the looks of things. That is around 10K off what you pay for new?

    If what you say is correct it would seem Skoda is holding value better than the more up market brands.
    You could probably get the car I am looking at for 15ish if you were lucky/maybe slighter higher mileage (I'm comparing to what I would probably put on in 3 years, which is lower than average - perhaps 7k pa). Also don't forget that if you look at the headline cost, then this is a 8-9k reduction, but the headline cost comes down quite a bit once you use carwow or drivethedeal, and consider PCP contributions etc. If that gets you into the 3-4k premium ballpark for new over used, then new looks tempting, especially considering warranty, less hassle/risk purchasing, the somewhat nebulous benefit of having a "new car" etc.

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      #12
      Try going in to a Skoda dealer and looking at going direct with them as well. They might not be cheaper they will juggle the numbers but they may be able to offer better deals such as....
      Better deal on new stock not sold that's surplus. Could be last years model but unregistered, or just new stock they specced and can't sell. Can't be fussy on spec or colour though. It's just what they have.
      They are likely to keep coming back to you 18 months+ in to swap the car to replenish their second hand stock if you've got a desirable model. They'll wave any penalties and just take it back and start a new one. Slight niggle is the price of the Aygo's go up every time as they evolve from a cheap little car to a highly specced little car.
      They are a lot less likely to take you to the cleaners over damage to the car. We've sent a few Aygo's back with the odd scratch and kerbing and they were just 'whatever'. Never paid a penny in damage. I'd be willing to be the third party companys will do a webuyanycar on you.

      FYI these are our experiences from getting Aygo's direct from Toyata for nearly 7 years now. Only downside is we want out at the moment which means buying the car off in full and re-selling. They aren't interested in taking it back when we want rid.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

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        #13
        Couple of things here.
        1) Watch the mileage limits if you are going to hand back car at end of PCP.
        2) Used car values are high because of supply chain issues with new cars, owing to chip shortages. People are buying used cars instead.
        3) You may be waiting quite a while for the delivery of a new car. I have been quoted April next year on a vehicle I am interested in! I can add another month to that because of the modifications I need!
        4) Dealers are running low on new stock and demonstrator vehicles too because of the above.
        Former IPSE member
        My Website

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          #14
          3 year old used, approx 15-17k for something with ~25k miles on the clock. Cost of financing that over say a 5 year loan at 4% would be about £1700, so call it 16 + 17 = 17700 leaves you with an 8 year old car after 5 years.
          Couple of thoughts. You've no figure for the car you are left with. Autotrader says an 8 year Octavia is still around 5k which will really change your figures. So use 12k as your figure as the PCP will leave you with zero when you give it back. You've also got the options of swapping it at any time and just keep topping up the loan. You mention PCP over three years so I can't see that you've done a true like for like.

          I'd say go back and do your figures again. Factor in the 5k at the end of the buying option and factor in 5 years of PCP. Maybe make the car ownership 6 years so two periods of PCP. I struggle to see that PCP comes anywhere near the cost of ownership to be fair. The advantage of PCP tends to be because you get two brand new cars rather than one old one rather. I find it hard to see that a PCP will make sense on pure numbers over that period.

          Factor in some charges for damage and excess mileage to see worst case.

          Despite what I put previously and the mrs does have the Aygo because she's had a bad experience breaking down with the kids I'm not a believer in PCP for expensive cars.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

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            #15
            Originally posted by northernladuk View Post

            Couple of thoughts. You've no figure for the car you are left with. Autotrader says an 8 year Octavia is still around 5k which will really change your figures. So use 12k as your figure as the PCP will leave you with zero when you give it back. You've also got the options of swapping it at any time and just keep topping up the loan. You mention PCP over three years so I can't see that you've done a true like for like.

            I'd say go back and do your figures again. Factor in the 5k at the end of the buying option and factor in 5 years of PCP. Maybe make the car ownership 6 years so two periods of PCP. I struggle to see that PCP comes anywhere near the cost of ownership to be fair. The advantage of PCP tends to be because you get two brand new cars rather than one old one rather. I find it hard to see that a PCP will make sense on pure numbers over that period.

            Factor in some charges for damage and excess mileage to see worst case.

            Despite what I put previously and the mrs does have the Aygo because she's had a bad experience breaking down with the kids I'm not a believer in PCP for expensive cars.
            True, but we'd probably keep the car at 3 years and just pay out the 9k, and then be left with a 5 year old car vs an 8 year old car after 5 years - although I can't really be bothered to go into the residuals on that.
            I wasn't suggesting that buying new via PCP was actually cheaper than buying recent used, just that the difference in cost is much closer than I would have expected, once you factor in cost of finance for the used car vs 0% on the PCP deal, the "deposit contribution" and the saving over headline price by using something like carwow. So it's not £15k vs £24.5k, its more like £16.5k vs £20k, which makes the new car a much more appealing option than it would otherwise be. And, perhaps, also nice to have the option to get rid in 3 years if we decide we don't want it, and do it all again.

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              #16
              ask the dealers how long it is taking to build you a car. Lot of news articles about chip shortages, leading to extended car build times.

              Used car prices were pushed up, by people desperate to avoid public transport during covid, and wanting a car right now, rather than waiting typically 3 months before covid, for a new build. The extended car build times are also pushing people towards used cars.

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                #17
                Originally posted by caffeine man View Post
                ask the dealers how long it is taking to build you a car. Lot of news articles about chip shortages, leading to extended car build times.

                Used car prices were pushed up, by people desperate to avoid public transport during covid, and wanting a car right now, rather than waiting typically 3 months before covid, for a new build. The extended car build times are also pushing people towards used cars.
                3-4 months apparently, which is OK (if true). Maybe quicker if they can find something near the spec I want that is already built and in the system. I'm not too fussy on most things, so that might work as well.

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                  #18
                  Originally posted by mattster View Post

                  True, but we'd probably keep the car at 3 years and just pay out the 9k, and then be left with a 5 year old car vs an 8 year old car after 5 years - although I can't really be bothered to go into the residuals on that.
                  I wasn't suggesting that buying new via PCP was actually cheaper than buying recent used, just that the difference in cost is much closer than I would have expected, once you factor in cost of finance for the used car vs 0% on the PCP deal, the "deposit contribution" and the saving over headline price by using something like carwow. So it's not £15k vs £24.5k, its more like £16.5k vs £20k, which makes the new car a much more appealing option than it would otherwise be. And, perhaps, also nice to have the option to get rid in 3 years if we decide we don't want it, and do it all again.
                  It's not nice to be tied to monthly payments for 3 years though.

                  PCP is a god awful bubble that is inflating new cars to ridiculous prices and will be the next Fanny Mae....

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                    #19
                    Originally posted by mattster View Post

                    We're not dead set on a Skoda, but we are looking for a non-flash family estate (2 kids, 2 dogs) for longer drives (Europe etc) and the Octavia does consistently top a lot of the group comparisons for such cars. What else is worth looking at?
                    This may sound bonkers but consider a V90. I am seeing insane 18-22k discounts on CarWow with £7.5k "Dealer Contribution".

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                      #20
                      Originally posted by clearedforlanding View Post

                      It's not nice to be tied to monthly payments for 3 years though.

                      PCP is a god awful bubble that is inflating new cars to ridiculous prices and will be the next Fanny Mae....
                      https://www.ft.com/content/0e651206-...c-50ba212dce4d

                      There are also recent articles detailing the extent of leverage by the likes of Volkswagen Finance and other groups that act as international banks but are just car manufacturers.

                      With the effects of climate change obvious to more people now I think you are right and a pop would be no bad thing. Car companies are just retro fitting existing body shapes with batteries, but really they need to use new designs to accommodate new technology. Nobody wants an electric vehicle with very limited distance on fudged technology.

                      New car manufacturer joint ventures are likely to be the future. Won't be sad to see the back of BMW and their poorly engineered, appallingly designed electrical efforts. They are bottom of reliability indexes for good reasons.

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