I told him that just give it back & walk away but then the big initial payment plus four years payments & he has nothing to show for it.

i know when i was looking for a skoda fabia for daughter, friends pcp was up on her citigo i had the chance of buying it however it wasnt a great price,

she loved the idea of getting a new car after 3yrs, she said if she had bought it outright would of cost more as she was guaranteed a figure, she said the key was not to go over on mileage, she had odd kerbed alloy but nothing was deducted,

She wouldnt have it any other way, 3 yrs of free worry motoring.

Maybe some pcps are different.

j77 wrote:

Or just hand it back and choose another brand.

+ at the end of agreement you have a guaranteed value for the car, if the bottom did fall out of the used car market you would be safe.

I did once have a FL1 on pcp. At the end of the period it was worth less than the settlement amount, so I just handed it back. They were a bit surprised. A few thoughts:

They usually give you a discount for taking finance. You can usually pay it off after one month and keep the discount. Not sure if that applies to pcp.
As JF says, if the bottom drops out of the market (eg diesels drop in value or no-one wants a secondhand DS after they've been continually trashed on the DS forum) you can just walk away.
If you think you won't be able to afford a similar replacement - eg if you're retiring and losing income - you can hand it back and buy something cheaper without having to worry about selling or trading in a car that's worth more than the one you want to buy. When I gave back my FL1 I bought a mate's ten-year-old Disco. You could hand back a three year old DS and buy yourself a Duster (or two).

Downside - You'll need to sort out any dents and scratches as they'll charge you for them; you need to be really sure of the mileage you'll do as they sting you for going over the mileage limit. My FL1 went a bit over the limit - probably that trip to Turkey. And be really careful to read the small print before you sign. Ex AA Series III LWB Safari - Gone
300TDi Disco (bought new - terrible car) sent back after 18 months
Freelander 1 Estate - leased, given back at end of lease
200TDi Disco (bought from a mate with 100,000 on the clock) - Gone
Disco 2 TD5 - sold and exported to France
FR2 TD4 GS - Gone
FR2 SD4 HSE - Now changed for a DS
New model ex-demo Evoque S 180 in white
Unable to order a new DS, so gave up. Now have a Volvo S90 Recharge.

Jack frost wrote:

+ at the end of agreement you have a guaranteed value for the car, if the bottom did fall out of the used car market you would be safe.

Never heard of that before. it would be interesting to know what the small print actually said.
Certainly the advice must be NEVER enter any agreement without reading all the small print. Ex AA Series III LWB Safari - Gone
300TDi Disco (bought new - terrible car) sent back after 18 months
Freelander 1 Estate - leased, given back at end of lease
200TDi Disco (bought from a mate with 100,000 on the clock) - Gone
Disco 2 TD5 - sold and exported to France
FR2 TD4 GS - Gone
FR2 SD4 HSE - Now changed for a DS
New model ex-demo Evoque S 180 in white
Unable to order a new DS, so gave up. Now have a Volvo S90 Recharge.

Quote from Land Rover pcp agreement (as stated on website):

2. Return – hand back your vehicle to Land Rover Financial Services without making your optional final payment. If the vehicle is in good condition (fair wear and tear accepted) and has not exceeded the maximum agreed mileage, you will have nothing to pay. If the vehicle has exceed the maximum agreed mileage a charge per excess mile will apply. Ex AA Series III LWB Safari - Gone
300TDi Disco (bought new - terrible car) sent back after 18 months
Freelander 1 Estate - leased, given back at end of lease
200TDi Disco (bought from a mate with 100,000 on the clock) - Gone
Disco 2 TD5 - sold and exported to France
FR2 TD4 GS - Gone
FR2 SD4 HSE - Now changed for a DS
New model ex-demo Evoque S 180 in white
Unable to order a new DS, so gave up. Now have a Volvo S90 Recharge.

Am I not right in thinking that you require a sizable deposit every time you start a PCP.

Doesn't this effectively make it more expensive in the long run, compared with buying it outright?

It alright on the first PCP as you have a vehicle with value, of part exchange, to be the deposit. After that you have nothing as you hand the car back, and then have to find the next deposit.


Surely the large deposit is paying for the low(ish) monthy PCP payments. FL2 XS SD4 Auto 2010 2012-2017 (21k - 91k miles) (MY2011)
FL2 Metropolis SD4 Auto 2014 2017- (16k - 79k+ miles) (MY2015)
Metro in its 11th Year of (Extended) LR Warranty / Full LR Service History
(Expensive, but Trouble/Worry free - hopefully?)

I am sure you don't get out for nowt.

Hire purchase or whatever fancy name they give it must always be more expensive than buyin for cash otherwise how would the lender make any money?

I just sleep better at night knowing I can keep my Freelander for years and years and years.

(My other car is 85 years old!)

Can’t remember the book, but I got an insight from an economics text that changed my whole way of looking at these things... It suggested that you should always try to work out what the real business is of any company you are dealing with - that way you understand things from their perspective. The author argued that while we may think that Macdonalds sell hamburgers, they are really a property company. Equally, Hertz etc were in car sales and finance and so on. For many companies, the day-to-day trading activity is run at very tight margins (or sometimes a loss) but provides the scope to make big profits on the allied sales.

In the old days most car dealers made their money on parts and servicing, rather than car sales. Nowadays, I guess they are really selling financial services, with the actual car relatively inconsequential to the whole operation. This also allows daily affordability to become separated from underlying asset value, which in turn enables cars to move upmarket and for car prices to rise. It’s the same as houses and the mortgage market - very few of us would ever be able to buy a house outright and the easier finance is (again separating value from affordability) the higher the prices can rise.

Personally, i’ve always been a cash buyer for cars - which is why I have seldom been able to buy anything newer than about seven years old! 2005 D3 2.7 Auto
Previously:
2010 MY FL2 TD4e GS - Now gone at 199,500 miles, about 135,000 of them mine.
‘93 Defender 110 200TDi CSW
‘87 Defender 90 4 cyl Petrol
‘83 110 CSW V8 - best ever!
Range Rover 2-door V8 (not sure of year - 4-speed box and vacuum diff switch)
Series III SWB Diesel

Sidthecat wrote:

Jack frost wrote:

+ at the end of agreement you have a guaranteed value for the car, if the bottom did fall out of the used car market you would be safe.

As you'll have seen from my earlier post, for whatever reason that didn't happen with a work colleague who was left with a difference of around £5k

im unsure how it works as ive always bought my vehicle to own, but if you like owning a New car they reckon its better to get on pcp but have to find the best pcp deal.

As mentioned friend bought a citigo for what it cost for 3 yrs trouble free motoring it would of cost them more if bought cash.

I think the way the make money is if you sign that your mileage allowance be 10k miles initially and end up doing 15k a yr prices are extortinate.

When dad was vw garage getting key coded on all his od passatt the salesman said the older generation cant get out of there head that PCP can work out cheaper.

The excess mileage charges aren’t extortionate, or any kind of money maker, they usually simply reflect the additional loss in residual values from the extra mileage. I’ve certainly done the maths to prove this on mine, even at 28p a mile

When PCP prices are advertised, the small print usually shows a laughably low annual mileage (4,000 miles per year is not unknown). This is all part of the smoke and mirrors used to get to that low headline monthly figure. It’s VITAL to set a realistic annual mileage figure and not be pressurised into accepting a lower figure “to keep the monthly payments low”. Mine’s set at 30,000 a year, 122,500 over the term, despite howls of protest from one salesman. Even then, I’m already budgeting for the excess charges to go over that, or put them towards buying the remains outright, if that makes most financial sense at the time.

inneedofhelp wrote:

When dad was vw garage getting key coded on all his od passatt the salesman said the older generation cant get out of there head that PCP can work out cheaper.