Getting a car on PCP - tell me what it's all about!

[Audidriver]

Posting for traffic!

I’m looking to buy another car at some point in the near future (not at this very moment due to COVID). I have an Audi A3 which I absolutely love and would ideally like another one. As the one I have is getting older now and doing a lot of miles (which is down to my job but can’t be helped) it is starting to cause me some expensive problems.

I took this car on a HP arrangement over 5 years (in order to minimise the monthly payments) however I still have another 4 years to go and once the car is paid off I imagine it will have done at least over 12000 miles and will be 13 years old. I have to say looking back now the deal wasn’t fantastic and the APR is extremely high but I was in a rush to get it at the time as my previous car gave up on me. I'm also the 5th owner of this car so god knows how well it's been looked after.

I’ve been looking at newer ones on PCP but as I’ve always had cars on HP I have no idea what PCP involves or what’s the process.
I’ve realised that cars aren’t reliable and I really don’t want to be wasting money on something that will eventually give up on me, so I like the idea of PCP as I can trade the car in after so many years (right?)

I’ve been looking on Auto trader and found some lovely ones which are well in my budget and meet all my requirements but their only on a HP agreement. Can any car be put on PCP or is it down to the individual dealership?

Thanks for any help!

Bump! Anyone?

I may be wrong but aren't those the ones with the balloon payment at the end? (If you want to keep it) and if you want to hand it back you can only do a certain amount of miles.
I'd look into the T&Cs because I'm pretty sure that a lot of people are 'surprised' towards the end of a PCP. I may be wrong though!

For that age of car 12000 miles is really really really low

Last few cars I've had on pcp we have ended up with about £2k negative equity at the end of them even 3.5 years into the 4 year deal, even with putting a deposit down first. Personally unless you have a hefty deposit or get offered interest free credit on a special deal I'd stick with the HP as there's no nasty surprise and the car is yours at the end. With our pcp we have paid £225 for 3 years and put down a £3k deposit and are still in negative equity of £1.6k :( just not worth it. And it's not even ours!

Assume you mean 120,000 miles over 5 years. Keep it till then and then trade it in.

You’ve only had yours a year and it’s already needing swapping? That’s nuts!

@ShannonLaird1

In what way are you in negative equity? What happened to put you in that position, did you overdo the mileage, or did the company claim too much wear and tear had occurred?

About to hand mine back in a few months and I’m worried about getting gouged 😬

PCPs are great if you change your car every 2-3 years. Taking it on HP over 5 and changing after 3 means the car was never yours anyway, you'll have paid more APR and your monthly payment is much higher.

Some brands are poor at setting GMFVs which plumbers you with negative equity. I used to work for Toyota and they were great. The GMFVs were reasonable so although the monthly payment was a few pounds more, the customers were usually equity with a few months to go. Audi were the worst as the dealers could tweet the GMFV to get a lower payment but guaranteeing negative equity at the end.

Personally, I wouldnt buy a car other than PCP.

@Fi1982 If you've looked after the car and been honest about the mileage, you'll be fine. Usually deposit contributions or dealer discount can get you out of negative equity.

Slightly overestimating mileage is better than going low. An extra couple of thousand miles a year will be about a fiver a month more, but you get great peace of mind and, if you use less.miles, your car will be in equity sooner.

Yes @PennyGold from what I understand that's how it works but I know a couple of people who have cars on PCP and are very happy with the arrangement so I'm not sure what's different for them (unless they have more money than me which they probably do )

Yes @Thehop - I've had so many problems with it in just the space of a year. There seems to be something wrong with it every other week and it's not just a case of changing a tyre or a bulb, it's expensive things. Like I said it is probably down to the fact that I do so many miles for my work and probably because it's a high maintenance car (?). My sister also has a job working on the community but she's got a 1 litre Toyota aygo which has never caused her any bother in the last 4 years she's had it and it's done more miles than mine has! I guess her car is a lot more practical though.

Don't get me wrong the car is reliable, it gets me to where I need to go and the engine hasn't blow up on me but I'm sick of spending every other week in the bloody garage sorting problems out.

Car was purchased from WR Davies (Renault and Ford) not Audi directly.

Get a proper loan. PCP and HP are both throwing good money after bad.

No one should be in negative equity on PCP, to my understanding, unless you have trashed the car. I’ve had PCP 3 times in the past and been advised at the beginning of a guaranteed minimum future value of the car at the end of the 3 years which has always been more than the balloon payment so that there is some equity to put down as deposit on the next car if you choose to trade in after the 3 year term.

My current car, also an A3 I’ve had from new and chose to keep it rather than trade in after 3 years. It will be 12 this year and has done 157000 miles and never given me any bother. The biggest bill I’ve ever had was new timing belt and water pump which is routine necessary maintenance. I’m now starting to think of changing my car as it’s surely only a matter of time before something big goes wrong, but it’s been a brilliant car for me.

@Audidriver PCPs are there to help those with less income get into a nicer car. All you're doing is paying the depreciation and basically renting the car. As I said earlier, most people change every 3 years so so and never own the car, so PCP is cost effective. Just make sure that the parameters are right for you. Too many people go for minimum mileage to get a lower payment and thereby choose to be in negative equity.

I've had so many problems with it in just the space of a year. There seems to be something wrong with it every other week and it's not just a case of changing a tyre or a bulb, it's expensive things. Like I said it is probably down to the fact that I do so many miles for my work and probably because it's a high maintenance car (?).

Why on earth would you want another one ?

@Spanglybangles - the GMFV and the balloon payment are the same amount. It's what they are guaranteeing the car is worth at the end. If you've looked after it and stuck to the miles you can hand it back without penalty if it's worth less than the GMFV/balloon. Audi have a field of diesels they cant sell for this very reason - after the scandal, the bottom fell out of the market and 000s of cars were worth less than the GMFV sothe customers just handed them back.

I’d advise buying new with a loan and keeping it for years so you are it’s only history. I had a used Audi A4 before my A3 and it cost me thousands in repairs in the year I owned it, I reckon previous owners had probably thrashed it. Was my first used car and that experience sent me right back to brand new. If I bought used again it would be from a dealership with less than 10k on the clock.

@JimDuggansEye apologies, you are right, I was confused. I meant that the GMFV if car looked after would be lower than the actual valuation at the end (which mine were) therefore allowing the difference to be used as deposit for next car. My last one was about £1000.

@Fi1982 ever so slightly over the mileage but what the dealers are offering for the car is way less than what's left to pay unfortunately. We can lower the sting sightly by handing it back to the finance company and just taking the hit with the mileage fine. Cars are a nightmare!

Ha good question @kilisibird! Despite its problems it is a lovely car to drive and I just absolutely love the Audi collection. I know it probably sounds ridiculous but I don't drink, I don't smoke, I don't go out and I hardly ever treat myself to new clothes/make up etc so a nice car is a treat for myself. I work hard and can (just about) afford it so it's what I like to have.

I think with cars it is just luck of the draw. My old car was absolutely fantastic and never gave me any bother in the 4 years that I owned it and it was a lot older than the one I have now and had done a lot more mileage, but it had only had 1 previous owner as where my Audi has had 4, so like I said I have no idea if they have hammered it or not. I guess unless people can afford to buy brand new it's just the risk that we have to take.

@JimDuggansEye - ideally I would like to have a newer one with less mileage so hopefully it doesn't cause me any problems. Do you think that age/mileage matters or is it just luck of the draw?

You seem to know a lot about this so maybe you could answer the question on my original post.

"I’ve been looking on Auto trader and found some lovely ones which are well in my budget and meet all my requirements but their only on a HP agreement. Can any car be put on PCP or is it down to the individual dealership?"

Thanks!

It's pretty wild. I wouldn't recommend, because you don't know what kind of car you'll end up with when you come down- or even if it will be a car! Last time I went shopping on PCP I hallucinated someone telling me that toilet paper would vaccinate me against coronavirus if I ate enough, so I bought the whole shelf full. And well, that kinda snowballed...

So yes, shop straight is my advice.

I have had 4 cars on PCP you are (over) paying for the privilege of having a brand new car every few years - noone I know has ever paid the balloon payment and the monthly payments seem to increase with each new car.

This time I got a low interest bank loan over 5 years and bought a (then) 3 year old car. My payments are less than they were on pcos and I will own the car when its paid off (just under 2 more years or less if I over pay). I'd reccomend really.

@meow1989 Of course the payments go up. Would you expect to get a basket of shopping for the same price a few years later? Cars go up in spec from year to year as well.

How much can you afford to pay , after factoring in running costs?
I would never buy a new car as soon as they leave the forecourt you’ve lost thousands. Better a nearly new one paid with a bank loan or interest free.
What kind of mileage do you do annually?