View Full Version : Pcp - confused

30-05-15, 17:34
Hi, new here.

Im looking for a vw scirocco r line. I went and saw one i liked and talked finance. The car was 22k.

PCP deal was
5k deposit
20k miles
327 a month over 36 months
Balloon payment of just under 11k

What i dont understand is 327 a month over 3 years plus my deposit equals 16k. I will not pay the balloon payment so does that mean I would of spent 16k, handed back the car and nothing to show for it?

Surely HP finance would be better as i would purchase the car for 25k(accounting for interest) and sell it 3 years later for 14k(estimate) meaning ive only spent 11k on the car over the term ?

The saleswomen did not explain it very well and left me confused. I was originally told the deposit and balloon payment is minus'd from the cars value and the remaining (depreciation) is financed over the term but this doesnt seem the case? How is PCP cheaper if it works out like this? Someone explain it :'(

31-05-15, 01:20
Hi Kai,

The Minimum Guaranteed Value of 11k is designed to be that, the minimum. The hope is that if and when you hand back, the value of the car is greater than the MGV and you get to keep the difference.

31-05-15, 10:26
okay so im guessing i would save myself money to do the car on HP. Lower finance and its mine at the end of the term meaning enabling me to sell it. This way the car would of cost me less over the term them a PCP car ?

31-05-15, 10:35
Which based upon the poor mileage they allow in their agreements means it likely to be worth the lesser.

31-05-15, 10:58
Thats exactly what i was thinking. With a PCP deal i would pay 12600+3000 deposit over a 36month term. This adds up to 15900 with the car being worth 20k (used). I wouldnt pay the 11k balloon payment and there is no garuntee i would get anything back when i hand the car back. So ive spent 16k (not including the few 1000 i MIGHT get back at the end) and handed the car back

On a HP car the car value plus interest would be around 24k. After 2/3 years once the car is paid off i would be able to get at least 12k+ which means over the term I would of only spent the maximum of 12k?

I dont undertand why PCP deals

31-05-15, 12:16
Pcp are quite expensive now days .. Your be much better off looking into a personal lease if your not interested in purchasing the car after the 36 months !!
I just recently taken delivery of a golf r .. I used www.freedomcontracts.com .. There very helpful and much cheaper than Pcp deals the main dealers offer

31-05-15, 22:44
Pcp finance is aimed at people who want too pay small monthly repayments and then at the end of the agreement is too hand the car back and start again with a new car