This is moot in this case because...There is no downside to 0 percent finance
The PCP interest rate is 5.9%
Yes, in this case, but I wasn't referring to higher interest rate pcp.This is moot in this case because...
I'd see it more as encouragement. Bottom line is new cars generally always depreciate more than second hand, so what you notionally save on cheap financing you lose on eye watering depreciationA downside with 0% finance is those terms dupe people in to spending more on a car than they need to.
If you are buying a new car you are spending more than you need to, no matter how you pay for it.A downside with 0% finance is those terms dupe people in to spending more on a car than they need to.
It's only guaranteed if there is no damage to the car and your mileage is within the limits. But the biggest catch on the final value is that it is set the dealer's favour and in the majority of cases the car will be worth more. I used PCP to buy my previous car, paying the 'final value' to keep it. 5 years later I traded it in for more.and have a guaranteed value locked in which im told is about 15k.
how is it a catch?It's only guaranteed if there is no damage to the car and your mileage is within the limits. But the biggest catch on the final value is that it is set the dealer's favour and in the majority of cases the car will be worth more. I used PCP to buy my previous car, paying the 'final value' to keep it. 5 years later I traded it in for more.
Because the guaranteed trade in value is set in the dealer's favour below what the fair market resale value is likely to be?how is it a catch?
And how is that a catch? At the end of the term you can buy it from them at this price. Or trade it and avail of the extra value. And it's a contract with a financial institution not a dealership.Because the guaranteed trade in value is set in the dealer's favour below what the fair market resale value is likely to be?
Because a large cohort of people are being conditioned that the final value is all it is worth and they are simply rolling from one PCP deal to the next. Granted it is really only a catch for those who don't understand the full terms of the deal, but the ESRI and other bodies have been flagging how bad these deals are for consumers for years yet many continue to fall for it.And how is that a catch? At the end of the term you can buy it from them at this price.
sorry i dont believe that a large cohort of people are only getting the GMFV at trade in time when the value of the vehicle is much higher, it may well be that people dont understand how much interest they are paying on higher rate pcp or that they dont own the car until the final payment is made, or that there are mileage restrictions but i would be surprised if what you are saying is the case. Its generally in the dealers interest to get you to take another pcp so if anything they are more likely to inflate your trade in to give a deposit to go again than anything else.Because a large cohort of people are being conditioned that the final value is all it is worth and they are simply rolling from one PCP deal to the next.
I dont doubt you Leo but would you have any source or link for this? Thanks.the ESRI and other bodies have been flagging how bad these deals are for consumers for years
But the offer will be lower than you will get elsewhere because they know the majority of people can't stump up the final value and won't be able to countenance the alternative of handing back the keys and walking away with nothing. You can't just shop around for a better deal unless you clear the finance.Its generally in the dealers interest to get you to take another pcp so if anything they are more likely to inflate your trade in to give a deposit to go again than anything else.
Central Bank, media, Credit Unions, ESRI, others have been warning about them for years. They're designed to lock consumers into a 3 year cycle of new cars with the same dealer.I dont doubt you Leo but would you have any source or link for this? Thanks.
They can offer you less if they think you'll struggle to stump up the final payment.I presume when a dealer offers you more then the GMFV, their only offering you what they would pay for the car and not the true resale value??
any data on this or just a hunch? you can literally goto any garage in the country and get trade in prices, you dont have to go back to who you bought from, or you can sell it privately.But the offer will be lower than you will get elsewhere because they know the majority of people can't stump up the final value and won't be able to countenance the alternative of handing back the keys and walking away with nothing. You can't just shop around for a better deal unless you clear the finance.
no they arent, you can can goto any dealer you want.They're designed to lock consumers into a 3 year cycle of new cars with the same dealer.
whats the true resale value? cost to change is always a dark art, some manufacturers will be running promotions and artificially inflate the trade in, others wont and it looks worse. But PCP or not id imagine youd get the same trade in offer as someone who has the same car with no finance on it.I presume when a dealer offers you more then the GMFV, their only offering you what they would pay for the car and not the true resale value??