PCPs

ffiscool · « **on:** June 27, 2017, 23:05:41 »

hi, I have never done a PCP before, but there is a deal where an extra £1000 would be contributed by the dealer for taking one out. I read on Martyn Lewis' site, that often these can be paid off, after 6 months, or you pay a massive chunk after 6 months and then say 1 month later, you pay the balance, so that the interest paid for redeeming early is only on the lower amount.

Apologies if I have asked this before, I cannot find it...

So, I just wondered, has anyone here recently taken a PCP out with the dealer, or paid off an amount early but obviously still benefited from the extra discount by taking the PCP in the first place.

Thanks for any thoughts

Jon · « **Reply #1 on:** June 28, 2017, 13:59:41 »

its a commonly used strategy. You'll have to read the small print carefully when you sign up. Ford were recently doing big discounts for taking out a PCP deal that could be paid off after a month. No interest penalty but it was a 0% deal.

ffiscool · « **Reply #2 on:** June 28, 2017, 14:15:16 »

wow.. thanks... I am hoping the interest rate comes down a bit, as it nears September as I am not fussed with the new plate, so can buy in July or August

Jon · « **Reply #3 on:** June 29, 2017, 09:31:11 »

I am eligible for the Hyundai Affinity scheme. Dealers don't always mention it as there's little incentive for them to supply a car through it. But the finance with an Affinity is high at 6.9%.
Instead I took out a loan from Sainsbury's bank at a much lower rate. It's fully flexible so I can pay off early.

It's worth comparing all options. The PCP with discount may well work out best, especially if you can pay it off and refinance. Check the small print before you sign up.

Piskoty · « **Reply #4 on:** June 29, 2017, 13:24:32 »

One further point regarding personal loans and paying off early: where the loan claims to be fully-flexible regarding paying off early, check whether the redemption figure given includes the interest on the full-term - so no real savings to be had by paying off early without penalty (which is why they allow it).

ffiscool · « **Reply #5 on:** June 29, 2017, 14:03:59 »

ah, thank you.. I will investigate fully

Piskoty · « **Reply #6 on:** June 30, 2017, 14:06:18 »

Also, hints have been made by Mark Carney that interest rates will rise soon, if you're getting credit in whichever form, get it fast!

ffiscool · « **Reply #7 on:** June 30, 2017, 16:36:21 »

thank you. Well I have done it.. not doing PCP but a personal loan, with 2.8% apr.. so it is the amount I am happy to pay per month. also part exch mine.. never done it before but I have so much going on, and just easier this time to do it. Getting the Premium Nav in silver, mid July :-) I went back to the dealer who I got this one from and they were obv wanting the car on their books by today.. so it is fine, swings and roundabouts for the difference it might have made down the line. also I get a nice refund on my car tax as I only renewed in May

Ruperts Trooper · « **Reply #8 on:** July 08, 2017, 13:49:16 »

I bought my current car with a PCP to get the £5,000 manufacturer's contribution - and paid off in full after 2 months retaining the discount and paying interest only for the amount/time outstanding - but set-up & final arrangement fees had to be paid.

I have heard of some taking a PCP and then cancelling within the 14 day cooling-off period - discount was retained, no initial or final fees payable - only capital & interest for the amount/time - the salesman and dealer miss out on commission that way so don't expect any goodwill later on.

ffiscool · « **Reply #9 on:** July 08, 2017, 23:13:28 »

I did think about it, but it happened quickly and I just went with the personal loan.