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AA3751
Newbie


Joined: 17 Jul 2016
Posts: 14



PostPosted: Thu Jul 28, 2016 11:31 pm    Post subject: Reply with quote

cheshire911 wrote:
You need to double check those figures.
Car costs £106k

MGFV at end of term (48 months) = £47,000

Depreciation = £106,000 - £47,000 = £59,000

Less Deposit £25,000 = £34,000

PCP is financing the depreciation plus interest.

Lets say Interest is 6.5%

Depreciation + Interest = £34,000 x 1.065 = £36,210

Over 48 months = £754 per month

Excludes fuel, servicing, maintenance, VED, MOT.

Assumes 5k miles per annum (otherwise costs increase due to excess mileage penalty - usually applied by reducing the MGFV

IF I've not over-simplified it and if I've not overlooked something of significance, then those figures quoted do not make sense to me and I'd be back asking them to clarify and break them down much as I have done.

If there are any professionally qualified accountants on the forum, perhaps they can add their view and correct me on anything (I am NOT an accountant).

Maybe I've got it completely wrong? £1200 per month versus above £754.
Lifetime cost £86,400 versus £61,210?????


It's the interest calculation that's off here I think! The interest is calculated on the full value of the car so Purchase price less deposit. Not just on the difference between that and the GFV! That should help get it to the quoted figures
 
  
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AA3751
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Joined: 17 Jul 2016
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PostPosted: Thu Jul 28, 2016 11:38 pm    Post subject: Reply with quote

ragpicker wrote:
jazzy2000 wrote:
Just met with the stealer and been quoted for a £106k pana for down £25k with £1.2k per month for 4 years on pcp. After that, i would just hand the car back if i cannot pay the 47k balloon. That works out £82.6k for 4 years if i hand the car back. Based on 5k miles allowance a year, that is £4.13/mile before i servicing and fuel Surprised Surprised


And this is precisely why I have never financed a car, and equally why I'll never own a GT3 now!

I just cannot stand the fact that I would be throwing money away on something I will never really own, or even that something depreciates so quickly because of the way the market is set up. There is no way a car is worth £10k less the moment it leaves the forecourt, its just that we are forced into paying £10k more for it than its worth to fund the salesmen's bonuses.

A few months back I was looking at getting a low BIK car for the wife and financing it through my limited company as a way of actually getting money out of the company efficiently. In the end I binned the idea and bought her a Range Rover Sport for £15-20k (an awful lot of car for the money - but thats another topic). Even if it depreciates, it won't be at a dizzying rate and at least we own it outright.


I just took a company car out for the wife on PCP! Cheap deals costing around £250inc vat a month. Costing around £3k a year and works well for us. New car, warranty, all costs and fuel go through company, no tax or NI to
Pay, corp tax relief, low BIK amount. Always depends on what car your after I guess though.... Calculations on the low CO2 panamera/cayenne hybrids would be interesting....
 
  
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jazzy2000
Trainee


Joined: 10 Nov 2015
Posts: 61



PostPosted: Fri Jul 29, 2016 7:13 am    Post subject: Reply with quote

I wonder how many people drop 100k+ cash for a new 911 or the new Panamera.
 
  
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6appeal
Montreal


Joined: 02 Jan 2016
Posts: 603



PostPosted: Fri Jul 29, 2016 7:54 am    Post subject: Reply with quote

I bet that's less than 1% of buyers... Even if you had the cash, you probably wouldn't.... "Ownership" is a bit of an urban fallacy. Sure, for my bike and classic car it's nice to own them... But for a new/modern car, it's much less relevant.
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ragpicker
Estoril


Joined: 14 Apr 2013
Posts: 3978
Location: North East England


PostPosted: Fri Jul 29, 2016 7:57 am    Post subject: Reply with quote

6appeal wrote:
But for a new/modern car, it's much less relevant.


Why's that?

Surely its just a personal preference?
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Shurv
Albert Park


Joined: 09 Jan 2013
Posts: 1733
Location: Northampton


PostPosted: Fri Jul 29, 2016 10:21 am    Post subject: Reply with quote

If you are planning to move it on in 18 months, why not take a bank loan out, plenty out there on 3.9% APR rates. If you need more when you trade up, you can top it up or keep it running and pay cash for the difference. Only use dealer finance if it is sub 4.9% APR. If you aren't taking it to the end of the loan term, it makes little difference between PCP and HP, if the interest rates are the same, but often there is a difference between dealer HP and PCP rates. PCP's are likely to be lower as this is the finance product the Manufacturer Finance house wants the dealers to promote. I've been in motor finance for 25 years, so feel free to PM me any questions you have.
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6appeal
Montreal


Joined: 02 Jan 2016
Posts: 603



PostPosted: Fri Jul 29, 2016 9:05 pm    Post subject: Reply with quote

ragpicker wrote:
6appeal wrote:
But for a new/modern car, it's much less relevant.


Why's that?

Surely its just a personal preference?


It is indeed, but with three main changes in society over the last 10 - 20 years in particular for the primary cars in day to day use:
1) Disposable incomes have increased and greater proportion of people are in the market for "premium" cars. When i bought my first car 20 years ago, it was another world in the work car park.
2) Borrowing has become more prevalent with it being cheaper and easier to obtain.
3) From the recession 8 years ago, people have tended to hold onto cash for a rainy day and to pay the small cost to finance such a purchase and effectively hire the things.
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jazzy2000
Trainee


Joined: 10 Nov 2015
Posts: 61



PostPosted: Fri Jul 29, 2016 9:40 pm    Post subject: Reply with quote

6appeal wrote:
I bet that's less than 1% of buyers... Even if you had the cash, you probably wouldn't.... "Ownership" is a bit of an urban fallacy. Sure, for my bike and classic car it's nice to own them... But for a new/modern car, it's much less relevant.


I have always paid cash when buying my cars. It is not ownership that important. Rather it is not paying more money (by way of interest) than is required. Besides, money in the bank instead is not going to give me more interest than what anyone charges. What do you guys think?

But then i have not bought a 100k car before and ***** out 100k cash is still quite hard to swallow.
 
  
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wilpert
Albert Park


Joined: 06 Jun 2010
Posts: 1554
Location: London

2016 Porsche Boxster 987

PostPosted: Sat Jul 30, 2016 9:01 am    Post subject: Reply with quote

It seems that there are so many variables in this discussion, HP, PCP, part cash part finance.
I'm impressed how many people give it so much consideration and work out all of the options available, then make rational decisions.

Even at my age, I tend to see what I want, commit to buying it, realise I couldn't really comfortably afford it and then somehow pull together the funds so I can pay for it.
It's called impulse buying and it's usually led by the heart and not the head.

All this Pcp, HP, oap and all the rest of it just goes out of the window as I drive around the lanes in my impulse purchase.

Not a good example really am I
nooo
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AA3751
Newbie


Joined: 17 Jul 2016
Posts: 14



PostPosted: Sun Jul 31, 2016 10:32 am    Post subject: Pcp Reply with quote

Anyone that's good with a calculator here's one for you!

So let's assume same deposit, same monthly payments...

Keeping the car for 2 years, which would give you more equity left in the car HP or PCP???

HP will of course be on a longer term length than PCP to achieve the same monthly payments but even doing that I'm curious which one 'pays off' more of the car value rather than interest so effectively gives you more cash if you sell the car ....
 
  
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6appeal
Montreal


Joined: 02 Jan 2016
Posts: 603



PostPosted: Tue Aug 09, 2016 9:07 pm    Post subject: Reply with quote

Same deposit, same monthly payments, means that you have the same total sum borrowed and that you are paying it off at exactly the same rate, and as long as its the same APR, then surely that means there is no difference. Your cost is most likely in the small print of any early repayment fee clauses.

From my PCP... "For the 911, £90k car, £15k deposit, £75k finance @ 6% £1,200/m 4yrs residual £35k so round figures are £55k depreciation + £15k interest."

I have received a HP quote 5%+, and doing the £75k, but over a total repayment of 5 years instead, so paying it down quicker at £1,440 a month, it reduces total interest to £11.4k cost, so literally about £2k a year interest, which on such a car and level is pence. Extra £200 a month, but at end if year 4, in theory it would be worth £35k+ and have finance balance of £18k, so a larger level of equity accordingly.

all man maths Wink [/quote]
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6appeal
Montreal


Joined: 02 Jan 2016
Posts: 603



PostPosted: Tue Aug 09, 2016 9:23 pm    Post subject: Reply with quote

Wow, lombard at 4% (Pistonheads tip)... £1380 a month for £75k over 5 years HP. Only £8k total interest. £1,600 a year interest!! thats ridiculously low.

Makes you think Dont know
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- VW T2 Bay Window 1976
Past:
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jazzy2000
Trainee


Joined: 10 Nov 2015
Posts: 61



PostPosted: Wed Aug 10, 2016 8:20 pm    Post subject: Reply with quote

6appeal wrote:
Wow, lombard at 4% (Pistonheads tip)... £1380 a month for £75k over 5 years HP. Only £8k total interest. £1,600 a year interest!! thats ridiculously low.

Makes you think Dont know


Yes. But £8k interest + £40k depreciation makes that an expensive hobby. Get Me Coat
 
  
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6appeal
Montreal


Joined: 02 Jan 2016
Posts: 603



PostPosted: Wed Aug 10, 2016 8:30 pm    Post subject: Reply with quote

Worth every penny... or so they say. If these cars a rubbish, I blame you lot! Wink
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- Yamaha MT01; CCM Cafe Racer
- VW T2 Bay Window 1976
Past:
- 991.2 Carrera, 640d GC, 635d, RS6, Audi TT 225, Astra with wind up windows, Citroen ZX, Rover 213, yes behold, a Rover 213... Renault 5
 
  
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G2
Barcelona


Joined: 26 Oct 2015
Posts: 1342



PostPosted: Fri Mar 01, 2019 9:24 am    Post subject: Reply with quote

One of the usual differences is that pcp has excess mileage charge laid out in exchange for that GFV. I don’t use pcp so don’t know if this applies for Porsche. Other manufacturers use it so worth watching out for.

Either option has the residual set artificially lower to protect the underwriter by you overpaying a bit in the primary term. Underwriter could be the manufacturer or finance company depending.

Also the shocker for most people with Porsche comes when you spin the car for another one. The trade in figure is closer to the artificially lower balloon figure than the marketable value of the car. Thus making finance much more profitable on the back end and providing a level of lock-in for future sales...

Finance has its uses but needs homework to select which option to use...and the dealer business manager is the last person you want to help you make the decision Question
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k11pol
Monza


Joined: 18 Feb 2010
Posts: 215
Location: Aberdeen


PostPosted: Sun Mar 03, 2019 9:28 pm    Post subject: Reply with quote

I would say be very careful with your finance and get everything in writing. I’m saying this because I took finance on my last car as I was also buying a house at the same time and it made for an easier life. I went for an Indy finance company who specialise in performance cars or so they advertise themselves. Their rates were better and I wanted to take it over 4 yrs for the lower payments until the house was bought then pay it of sooner. They also promised me flexibility of repayments ie I could over pay anytime and close the deal when I wanted too.

Anyway after my first instalment I called the finance company they set me up with to make an extra payment and was told no you can’t do this but if you want you can make over payments and we will hold this money for you until the end of the term, ie for 4 years. This totally baffled me and when I contacted the broker they simply said oh sorry no you can’t do this.

I have in writing their instruction that I could make overpayments so will take this further at a later date.
 
  
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