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PCP's.


Liam40
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Hi,

What do people think of this financing scheme 'Personal Contract Purchase'?

When I've been looking on some of Ford dealers websites doing some searching for cars, apart from the usual HP (Hire Purchase) I've seen this advertised. I've read up about it by googling, and apparently PCP is very popular, but I wondered what members thought of it?

I've done a search for it on here but can't find anything.

Liam.

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It depends what you want. I used to think they're great - some offering a years free insurance etc if you take it on PCP or whatever. However after actually looking into things I decided to get the money in another form as the interest rates on PCP are usually quite high. They're sold on the basis of if you change car every 2-3 years then theyre great as you are technically paying to rent the car out, and hand it back with no penalty or charges. However if you want to keep the car you pay a lump sum  - However the interest when you look into it is rather high.

 

I just looked into a loan from a bank (much lower interest) and even if I wanted to change my car I could probably sell it on and pay most of the loan off.... (especially if circumstances changed and I wanted to sell the car after 6 months/year). Felt I had a much lower risk this way - PCP is great if you have no deposit, want a car and want to keep monthly costs low - however if you ever want the car to be yours then a loan or HP would be better. I just hate dealerships having worked at one - they sell it so much and you can always get better interest rates from banks. 

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1 hour ago, JSMarsden said:

I just hate dealerships having worked at one - they sell it so much and you can always get better interest rates from banks. 

Hi James,

Did you work in the dealership trade then?

Liam.

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20 minutes ago, Liam40 said:

Hi James,

Did you work in the dealership trade then?

Liam.

Did,

I went to Uni and a company called Pendragon (They Own Stratstone and Evans Halshaw Dealerships - don't think theyre in the SE though but huge elsewhere in country). They had a graduate scheme in Management (so a job once i left uni) but turned out to be heavily sales oriented based job - starting as Sales Executive for a few years in Dealership (which I wasn't told about!)

So worked at an Evans Halshaw Ford branch for about 7 month before I had to leave - just wasn't for me. But i got an understanding of how the majority work. Would never get finance, or any insurance products( I.E Paint protection, GAP, Alloy Wheel protection etc) from them. But thats just me! The thing I see it as, if you can't get a bank loan then you'll probably get refused on a PCP/HP.

 

but its each to their own - one good thing about a PCP is that its low costs, sometimes get freebies (but end up paying for them through higher interest rates) and you can give the car back to them once you have paid more than half the contract off. People see it as the least risky, however whats risky about a bank loan? - You can sell the car off whenever you like, pay the loan off (and pay less a month if you had negative equity etc).

 

Just opinions, positives and negatives about everything. Just all about weighing it up and seeing what the best option for yourself is. A PCP may be a lot better for your circumstances etc - but a dealership 99.9% of the time can't match a bank.

Also, they may say there are no areas on price to negotiate (which nowadays there aren't because some cars we only made a £50 profit, others we made a loss on! -> Which is why they sell lots of insurance products to try and make the money that way). However, if your looking at finance you can always try and negotiate the rates if you don't want to approach a bank.

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9 hours ago, JSMarsden said:

Did,

I went to Uni and a company called Pendragon (They Own Stratstone and Evans Halshaw Dealerships - don't think theyre in the SE though but huge elsewhere in country). They had a graduate scheme in Management (so a job once i left uni) but turned out to be heavily sales oriented based job - starting as Sales Executive for a few years in Dealership (which I wasn't told about!)

So worked at an Evans Halshaw Ford branch for about 7 month before I had to leave - just wasn't for me. But i got an understanding of how the majority work. Would never get finance, or any insurance products( I.E Paint protection, GAP, Alloy Wheel protection etc) from them. But thats just me! The thing I see it as, if you can't get a bank loan then you'll probably get refused on a PCP/HP.

 

but its each to their own - one good thing about a PCP is that its low costs, sometimes get freebies (but end up paying for them through higher interest rates) and you can give the car back to them once you have paid more than half the contract off. People see it as the least risky, however whats risky about a bank loan? - You can sell the car off whenever you like, pay the loan off (and pay less a month if you had negative equity etc).

 

Just opinions, positives and negatives about everything. Just all about weighing it up and seeing what the best option for yourself is. A PCP may be a lot better for your circumstances etc - but a dealership 99.9% of the time can't match a bank.

Also, they may say there are no areas on price to negotiate (which nowadays there aren't because some cars we only made a £50 profit, others we made a loss on! -> Which is why they sell lots of insurance products to try and make the money that way). However, if your looking at finance you can always try and negotiate the rates if you don't want to approach a bank.

Thank you James for the very good advice! It's really helpful when someone has inside knowledge on the matter because they've worked in the field at some point in the past.

I bet your glad you got out of it now! 

Liam.

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10 hours ago, Liam40 said:

Thank you James for the very good advice! It's really helpful when someone has inside knowledge on the matter because they've worked in the field at some point in the past.

I bet your glad you got out of it now! 

Liam.

Oh indeed, indeed I am. Its not a nice place to work, especially when your working 60 hours a week, no weekends off, no overtime etc etc

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Well stated James. I personally have a hatred of Pendragon because of a con job done on me with a warranty and therefore won't ever deal with them again.

Liam. A big bearing is are you wanting to buy new or a year old for example. A cars depreciation plays a massive part in its purchase. Good luck in what ever you get and how ever you finance it.

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1 hour ago, JSMarsden said:

Oh indeed, indeed I am. Its not a nice place to work, especially when your working 60 hours a week, no weekends off, no overtime etc etc

I can see why you wanted out, I would want too, with those working hours!

Liam.

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45 minutes ago, tazzman600 said:

Well stated James. I personally have a hatred of Pendragon because of a con job done on me with a warranty and therefore won't ever deal with them again.

Liam. A big bearing is are you wanting to buy new or a year old for example. A cars depreciation plays a massive part in its purchase. Good luck in what ever you get and how ever you finance it.

Hi Vlad,

Thank you!

I'm not sure yet whether to get a used or new car. I shall keep searching until I've found the right car then will decide from then.

Liam.

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52 minutes ago, tazzman600 said:

Well stated James. I personally have a hatred of Pendragon because of a con job done on me with a warranty and therefore won't ever deal with them again.

Liam. A big bearing is are you wanting to buy new or a year old for example. A cars depreciation plays a massive part in its purchase. Good luck in what ever you get and how ever you finance it.

I think its pot luck with a lot of dealerships. The big dealerships are better with warranty's etc and repairs than smaller ones (who don't have their own repair shops/warranties etc). I dealt with another one local to me who have 2 large garages in my area (and sell a LOT in my area) - also neighbour is a service leader so any problems and always got a back up! But yeh I wouldn't want to deal with them - thats why I bought my car elsewhere rather than the garage I worked! 

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I'd never buy new purely because of depreciation. My last few fords have been either 1 or 2 years old when I got them. My current car I got from a nearly local family run dealer whose been in the trade nearly 100 years. 1 year old car and 2 years free servicing and damn cheap finance too.

Thought I'd add that my latest car I was in and out in minutes. My previous car bought from evans halshaw I was there over 2 hours.

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56 minutes ago, tazzman600 said:

I'd never buy new purely because of depreciation. My last few fords have been either 1 or 2 years old when I got them. My current car I got from a nearly local family run dealer whose been in the trade nearly 100 years. 1 year old car and 2 years free servicing and damn cheap finance too.

Thought I'd add that my latest car I was in and out in minutes. My previous car bought from evans halshaw I was there over 2 hours.

Hope they gave you a cup of tea and a piece of cake in those 2 hours! 😁

Liam.

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You know what? I asked numerous times before I got a drink and nowt to snack on plus I travelled from Manchester to Doncaster to get the car. Oh well. As they say you learn from your mistakes.

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18 hours ago, tazzman600 said:

You know what? I asked numerous times before I got a drink and nowt to snack on plus I travelled from Manchester to Doncaster to get the car. Oh well. As they say you learn from your mistakes.

We offered free tea/coffee from a 'great' vending machine but handovers were done within 20-30mins. However my last handover at local garage was literally 5 minutes. Had the car parked up, fully valeted (didn't even need it) and had 3 things to sign. Probably quick as it was cash, and also he knew that I knew all the jargon and everything that I had to sign, so he didn't have to spend ages explaining disclosure docs etc.

 

Was literally in for 2 minutes no longer. Was great! 

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I didn't have to physically sign anything when I picked up my Focus which was/is on finance. It was all done on a computer. All I had to do was tick 3 boxes and the finance was ok'd and the car mine. Wasn't in there long enough for a cuppa to brew.

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