To PCP or not to PCP...

A downside with 0% finance is those terms dupe people in to spending more on a car than they need to.

But fair enough if people have extra money to indulge themselves that's their choice.
 
A downside with 0% finance is those terms dupe people in to spending more on a car than they need to.
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 depreciation

Never ceases to amaze me that otherwise sensible people blow masses of money on new cars

I have a fair bit of a car habit myself which I'm trying to ween myself off but I am acutely aware of the costs, I generally try to avoid huge depreciation but all too easy to get sucked in n
 
and have a guaranteed value locked in which im told is about 15k.
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.
 
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.
how is it a catch?
 
Because the guaranteed trade in value is set in the dealer's favour below what the fair market resale value is likely to be?
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.
 
And how is that a catch? At the end of the term you can buy it from them at this price.
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.
 
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.
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.
 
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.
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.
 
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??
 
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??
They can offer you less if they think you'll struggle to stump up the final payment.
 
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.
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.
 
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??
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.
 
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