PCP Car Finance Explained

PCP Car Finance Explained



hi Justin David here again I've just done a video on specking my nubian WM 140 I and actually as I was making the video at the end an idea for another video came upon me and that was to talk about the finance and purchasing behind cars it's something that I'm very interested in it's something that frustrates me a lot to be honest because often I've been into dealers and dealers no disrespect to dealers they've got a job to do but they've also got a product to sell and often they wall I think to try and pull the wool over the customers eyes and because I've been doing this quite a while now I actually know quite a lot about the finance behind cars and so I thought I'd put this video together to talk about different options to talk about a PR talk about flat rates to talk about volunter mination and stuff like that but the average member of the public might not be familiar with and it frustrates me when people aren't getting the the best deal that they could do so that's what this video is going to be about so this is totally off-the-cuff it's not scripted so I'm going to be using a product called finance cow it's a free online website sorry I've just realised I forgot to start my screen recording okay so hopefully this is now recording yes so there's a website called finance calc Skoda UK and it's brilliant it is a really good tool for calculating what lonely payments are going to be but also for calculating early settlement figures and it's about rioting in my experience it differs slightly but it's pretty spot-on so I'm going to be using that as a demonstration today okay so let's start by talking about what a PCP is PCP is probably the most common way of financing a car now I in the past have used PCP I've also used personal loans I've battled with the weather PCP is a good way of buying a car or whether it's not a good way buying a car I've been there I've done so many different options for financing cars you know I'm 40 now and I've probably bought 20 cars plus over the last 20 years or so from BMW from Audi from Porsche you know from Mercedes I've dealt with a lot of premium brands and so I think I'm fairly well qualified to to try and help people who are looking at buying cars so PCP personal contract plan personal contract purchase what does it mean well it basically means that and this is something that I didn't realize at the beginning it basically means that you buy a car you pay a deposit you finance the rest and then you have what they call a balloon payment at the end the first thing to realize about a PCP is that it's not a lease it's a finance plan you own the car technically it's exactly the same as a higher purchase agreement but the main difference is is that say you're let's take a 48 month agreement after 47 months of past instead of month 48 being the same amount as all the previous month payments it's much larger HP is basically where you pay forty eight equal months now obviously when you pay over a traditional HP agreement your monthly payments are going to be higher because every month is the same and by month 48 in our 48 month example you have paid the entire amount of car off so you own the car the difference with the PCP is that you are paying a deposit which is entirely up to you how much you pay you're then paying 40 in a 48 month example you're paying a forty seven month period of equal payments and then you are offsetting a much bigger payment to the end now that is sometimes called a balloon payment is sometimes called gfv which is guaranteed future value the advance for the PCP is that you've got lower monthly payments so let's just have a look on the screen here so this is finance cows so let's this is a total finger in the air example let's say we are buying a car for 30,000 pounds and we are putting in a 1,000 pound deposit and we are financing over 48 months let me just zoom in a little bit so you can see this a bit clearly or clearly and let's say this I'll come back to what flat rate in APR means in a minute but let's say we'll take a reasonable APR of 4% flat and ignore these because a lot of finance agreements years ago used to have a quite a high first payment that used to charge something like I don't know 125 pounds admin fee when you started the agreement and then there was an option to purchase fee that seems to be going away a bit more and that can alter the APR so I'm going to assume there's no option to purchase fee no arrangement fee in this example and let's say on a 30 thousand pound car we've got a bloom payment of 10,000 pounds now what that means is that the good thing about a PCB is that you're protected so a dealer will give you a GFP a guaranteed future value so they're saying that regardless of what happens providing you've taken reasonable care fair wear and tear of the vehicle and providing you have agreed you've not exceeded a certain amount of mileage will come to mileage in a minute the car will be worth 10,000 s so we calculate the load so this tells me look over here that we have borrowed 29,000 pounds because we've given a thousand pound deposit and our APR is coming out at 7.7 and our monthly payments we've got for effectively 47 monthly payments of five hundred and thirty pounds 97 and then at the end at month 48 we've got to give them 10 thousand pounds to own the car or it might be that the bottoms fallen out the mark your cars only worth eight thousand pounds well rather than saying well actually I'm going to give you ten thousand pounds to own it I'm gonna give it you back and they take the risk all PCPs whenever you take a PCP out make sure it's a regulated agreement and that will mean that it's covered by the Consumer Credit Act which means that you can hand it back and I'll talk about policy termination or anybody bleah what this is saying is that the guaranteed future values have several pounds you've made all your payments it's only worth eight you can give it back so interesting so that's basically what a PCP is now whenever you what the first thing I would say notice here I put in a flat rate of interest of 4% but it's telling me the APR is seven point seven and that is vital whenever you go to buy a car from a dealer I'm not saying they do it all the time but in my experience dealers will give you an interest rate and they will say something like oh you and get your great interest rate we can do this at 3% or for say well dirty at three point nine percent and you go fantastic that sounds good well the first question to ask is is that flat or is it APR because often they will quote flat rate to make it sound better than it is and as a rule of thumb obviously it's not quite that here because we've got a balloon payment but on a rule of thumb the APR is twice the flat rate if you work as that as a rule of thumb you know where you're at so if a dealer is telling you three point nine and they and you say well it's at APR or flat and they say flat you can go actually that's about seven point eight APR which isn't that competitive if the best rate you can get is six point nine seven point nine APR I would tend to if you can if you've got a reasonable credit rating go to somewhere like Tesco Bank they'll give you 3.9 3.8 probably less than that have a look but on new cars there's an incentive to buy a new car to get more new cars on the road and the finance company will tend to give you a better rate if you're looking at a used car on a pcp be very careful because I've seen rates as high as 12% APR 10 point nine percent APR and it's not worth doing let's just take an example let's say I was buying a used car and it was I don't know fifteen nine nine five and I'm gonna put one thousand pound deposits in 48-month term and from what I've said earlier let's say it's a 12-person let's know let's say it's a ten point no an APR of thumb let's put five point five in the flat rate and fifteen nine nine five over four years you probably can have a balloon payment of not a lot five thousand let's work this out now look at this ten point six APR pretty close I said a rule of thumb Harvick there's white that or potato is good five point seven five point six five there you go so 5.65 we bought a car at fifteen nine nine five who put a thousand pound deposit in so with financing forty nine ninety five at 303 pounds a month sounds reasonable clear apparent but law what were paying we're paying four thousand two hundred and seventy six pounds in interest alone and a total amount payable on that fifteen nine nine five is twenty thousand two hundred that's quite a lot for a used car you know so I wouldn't do that I wouldn't bother personally and you want to try and get that interest rate down let's say we knock it down to 4% flat it's knocking it down 24 5 pounds a months well our interest charges over the 4-year period has dropped 2,000 pounds and 17.7 now that still pretty high but it's reasonable for a used car okay the interesting thing is now so we've covered PCPs the next thing i want to cover is settlement so i'm going to take an example something that's very similar to my BMW m1 40 on my previous video let's say my purchase price is 31,000 pounds we'll stick with no deposit to begin with 48 months term and it's a two percent flat rate it's a very good rate at the moment on used cars and outside new cars and that's why pcps on new cars can work quite well something I didn't mention is is actually let me just sorry look I know I'm flitting about but let me just go back to that previous example opposite 5.65 their lot the interesting thing which I didn't point out look is our balloon payment that we owe at the end is almost the same as our interest that we've paid which is ridiculous really that's why it doesn't work very well on a used car going back to my new car example so let's take a cost of 31,000 pounds deposit of 0:40 a month termina 2% flat now on a 48 month term on a new car because you can get a lot of discount on a lot of new cars been in mind that my car was getting on for 40,000 retail because I've got negotiated a big discount the balloon payment isn't that bad the balloon pain which is 14 1 1 8 on my car so we're only really financing what 17 thousand pounds the important bit to remember on a PCP is which I would go back to what I said earlier I didn't years ago is that a dealer might say oh well your your point you deposit it and you're financing this bit and then you've got this bit at the end don't forget that you're paying interest on all of the amount borrowed not just the bit between the deposit and the final value so if you've got Heidi if you've got quite a high final value and a high APR you were paying interest on that final value that you're not doing anything with so just bearing that in mind but with a 3.9 percent APR as you can see look I put two percent flat in coming out at 3.9 APR 9 is I've borrowed effectively 31 thousand pounds because remember we're paying interest on the balloon payment as well the total charge three and a half thousand which is less than the fifteen thousand nine hundred and ninety five pound used car at a ten point nine eight PR so that is actually pretty good they're only charging a three and a half grand to borrow 31,000 right this is interesting so our monthly payments look are four hundred and thirty-three pounds nineteen let's see what happens when we put in a deposit of a thousand pounds brings it down 23 pounds a month now you could go well okay well I'm going to add a 1 a big monthly payment I want a month payment of 350 pounds so let's say I don't know I'm guessing here let's put 4,000 in that's not a bad example so put 4,000 pounds down to bring my monthly payment down from 4 3 3 2 3 4 1 so what 9 2 quid a month but you've got to find 4,000 pounds in deposit which is Clara I'm on it to find that you could do with something else to put it in the bank and get a bit of interest on it now the interesting thing is because you've got a balloon payment at the end your settlement figure is hardly ever going to be different depending regardless of what deposit you put in after about the first 12 months so what I'm going to do look he's going to this term called settlement calculator and I'm going to look at what the settlement figure will be on this term so we are financing 27,000 and a monthly pay which is 3 for 142 so let's put it into here so loan them out in 27,000 to 48 months first payment 3/4 I've forgotten what it was three four one forty two three four one forty two and they remember our balloon payment a final payment is fourteen on one aid tells me look that it's three point nine let me just make sure I'm right yeah three four one forty two solo so I put four thousand pounds of positive now this tells me what my settlement figure is at any point so let's say after two years we decide we want to get out of it now don't forget that a PCP as I said earlier is the same as an HP room and you can settle at any time you can ring up the finance company say what do I owe give them the money and own it you could sell the car you could pay it off that way just be careful about selling a car that's got finance on it because that's quite tricky but you can always settle it so you could ring up any time and say what do I own a PCP so let's say after twenty four payments so two years we want to know what we're gonna work roughly and again it will change a little bit but we would owe twenty thousand seven hundred and sixty seven pounds ninety to get out of that agreement okay now if any my we've put four thousand pounds in and we owe twenty thousand hundred and sixty seven let's see what we dough without putting any deposited so going back to the loan calculator no deposit monthly payment for 33-19 okay so let's go back to our settlement calculator so finance thirty one thousand four to three 19:43 19 and the settlement before that was twenty seven six seven now law what we owe after also I'm wrong I'm wrong there four three three ninety right twenty to eight one two so yes is higher we owe more because we've put no deposit in but we don't know 4000 pounds more we owe what I can't on what it was now twenty seven thousand three what was it three four I can't remember now m'lila three four I don't know this yes Bert it's about two thousand two thousand one hundred so what I'm saying is yes you've you owe two thousand one hundred pounds less settle but you don't know four thousand pounds less to settle you put four thousand pounds in at the beginning you've paid less per month fair enough but you still owe two thousand pounds let you owe $2,000 not four thousand pounds less so if you can afford the cash flow I would pop 1,500 quid it let's try it with 1500 quid 398 that's nice let's keep it under 100 400 pounds a month 398 78 so we're going to be financing 29500 398 78 398 78 yep the settlement 22,000 45 and we've only put 1,500 pounds in so what I'm trying to say is and it might not be coming across very well what I'm trying to say is don't think that if you put a big deposit in at the beginning you're gonna owe you're going to get all that deposit back because the longer you running for obviously by the time you get to same month 42 six months for the end because the final value is always 14 1 1 a regardless of how much deposit you put in you're gradually meeting that final value so you're never going to get that four thousand pounds back so if you can afford the extra fifty pounds a month I would do that then putting a big they're the last thing to cover is the difference between flat rate and APR okay so flat rate is basically the amount that you would pay per year so let's say you borrow a thousand pounds and you had a flat rate of 10% you would pay a hundred pounds every year for every thousand pounds that you borrow so if I borrow a thousand pounds over two years I'm going to pay two hundred pounds in interest on a 10 percent flat you have to remember that's not assuming that's assuming that you are owing a thousand pounds for the whole year but you're not because you're paying it down so you're at you are a thousand pounds in month one if it's a straight HP agreement you owe nothing at the end of month twelve so flat rate gives you an indication of you borrow a thousand pounds flat rate templates and you pay a hundred pounds in interest but the reason that APR is usually twice that amount there abouts is because APR takes into account that you're paying it down as well so let's take our thousand pounds over one year you are a thousand pounds at the start you own nothing at the end of month twelve so if we if our interest charge was a hundred pounds then effectively you take the average point of what you owe so if we if we try to explain this if we have an interest charge of a hundred pounds over a thousand pounds that's ten percent flat but if we paid a hundred pounds in interest over five hundred pounds because remember we're paying it down so effectively halfway point of a 12-month period we don't know a thousand anymore we owe five hundred so we take that point five hundred and we take our interest of fair a hundred what's that it's not ten percent it's 20 percent and that's where roughly as a rule of thumb the doubling comes from now we can work out monthly interest rates I might do another a video on that that's where you take things like the APR and work out the 12th root and all sort of things it gets fairly complicated but like I said a rule of thumb always ask what the flat is and then you can roughly double it to get your APR 8 is voluntary termination now voluntary termination if you buy an advantage of buying on HP or PC PC if it's a regulated agreement and there are agreements out there that aren't covered by this I had a friend once who bought a car through Santander and they wants to get out of it and we looked through the small print and he actually wasn't covered by the the voluntary termination regulations so just make sure it's a regulated agreement but what the volunter termination says is that providing you have paid 50% of the total amount financed including any deposits you've made you can walk away from that car now don't get confused between half term and half amount because I've read on some forms that some people think oh well I've had a 36 month agreement I've paid 18 payments I'm gonna give you a back doesn't work like that searching with a PCP because obviously you've got a big offset at the end a big balloon payment there's no way after month 18 of a month 36 month agreement you would have paid half down so it's half the amount let me give you an example so let's say we are borrowing 30,000 pounds with a deposit of 2,000 pounds flat rate 2% and a balloon payment of 14 1 1 8 this is the important bit when you're looking at voluntary termination total amount payable 33 – 4 – okay that's your amount you've borrowed 30,000 pounds your interest charges and any deposit you've made okay so 28,000 look plus your 3,200 42 pounds interest is 31 – for 292 plus the 2,000 pounds that's the important so if you want to work out whether you can hand your car back or not look at your finance agreement look at the total amount payable and divide it by two so I'm gonna get my calculator up here which is here so let's have a look so in this example our total amount payable is thirty three to four 292 divide that by two so if we have made payments of sixteen thousand six hundred and twenty one pounds and forty six pence we can hand it back so let's say we have made actually what we'll do we'll take that we'll take the halfway term point so twenty four payments so let's take our monthly payment 24 months times three hundred and sixty four thirty six is eight thousand seven hundred and forty four and then remember we can add a deposit on so our deposit was two thousand pounds we've made payments of ten thousand seven hundred and forty four pounds and sixty four pence we can't voluntary terminate yeah even though we've paid twenty four payments and that's because we've got that massive balloon payment so let's work out when we can get out of it so total amount payable thirty three to four to ninety two divided by two 16600 21:46 take off a deposit of two thousand fourteen sixty two 146 and then divide that by our monthly payment three six four thirty six we can get out of that we can volunteer terminate just after month forty so maybe go to one forty one so you could get out of that seven months early now what valen termination means is that if you've got a car say our car was only worth twelve thousand pounds and let's say our settlement figure was I don't know let's say we're at one thirty six so it might be seventeen thousand pounds to get out of it you've got to sell the car for 12 grand and also give the finance company thousand pounds to get out of it however if you are at this point you can say okay well I've made 41 payments have the car back and they can't really do anything about it they don't like it but you can walk away you ring them up or you write a letter there's a various standard letters on online things like money saving expert calm and they will come and put the car up they can't charge you to collect the car and one that is a very interesting Amer it seemed that some kind of researching at the moment is whether they can effectively Pro right to the mileage charge now we haven't talked about mileage what mileage says is this when you take a PCP out us teammate roughly what your yearly mileage is going to be so let's say it's 8,000 miles a year and they will say for every mile you go over that we will charge you 8:00 p.m. I'll let's make it easy let's make it 10:00 p.m. I'll that's pretty high but let's think is 10 p.m. on so let's say at the end of the term the end of the whole agreement 48 months you want to give the car back and you've done 40,000 miles and you signed up for 8,000 miles a year over four years which is 32,000 miles so your 8,000 miles over so what they will do is charge you 8,000 times 10 pounds so they will charge you 800 pounds so you can't just give it back and that's when that's in that's when that is in force a way around it is it is if you're going to buy a new car is go to the dealer a couple of months before get a part exchange value trade it in and go that way the dealer will have some kind of incentive to get you into new car and they'll usually try and get you out of it the mileage charge only comes in firstly if the value of the car is less than the guaranteed future value so if it's not it won't come in but if it is they will charge you an excess mileage because obviously the car is worth less and they need to auction it off with you to get rid of it somewhere the question is is if you voluntary terminate so let's say we're gonna volunteer terminators month 41 so we should have done 8,000 mile times four 32,000 so and if they're going to pro-rata it at month 41 sats 41 48 times 30 mm you should have done twenty-seven thousand three hundred miles ish when you give you back at volunter mination if you've done say thirty thousand they could say well actually you owe was let's assume it's dead-on twenty-seven thousand you can volunteer terminate but you also I was three hundred pounds to walk away there is a fair and tare section of a finance agreement basically you know yes he's going to have a few scoffs but providing you've taken reasonably good care of it it's regularly serviced you know it's not completely trashed they should take that car away and you should walk away from it there are finance companies who will try and get a pro rata mileage excess charge out of you and I don't know which is right or wrong there are some arguments on forums that say they can't enforce it there are some are going to say they'll try and enforce it if you want to fight it you can but really I don't know but technically if they pro rata my legit that's how you work it out but that's a volunteer terminate so are there any downsides to it well I've read that there will be a mark on your credit score but all it will say is is that the agreement was ended somehow it won't say whether you ended it or whether there's finance coming the end of it and I've read loads of articles that say you'll still get financed again you know you can you can once you terminate and then you can date finance out with red some people they were volatile major three or four times and it's not made any difference but it's there it's really they're not to be abused is there to say well I can't afford it to fall into hard times I've paid more than fifty percent in the total amount payable I'm going to give it back but you know there's an argument to say well I have this car three years out of a four year term I've reached my volunteer mination point it's a it's worth five thousand pounds less than I won it I want to buy a new car well why would you trade it in and have to find another five thousand pounds before you start again you could volunteer terminate and start again that way and have a clean slate I think that's everything so important it's our PTP is the same as nature you can get out of it anytime you can pay it off anytime excess my lease choices apply but only really at the end always that's what the flat rate of interest is when you're going for a car not and then you can work out what the APR is don't put a big deposit in if you can because you'll lose that deposit whenever you surfing you'll never get that whole deposit back I'm sure there's other things I'll think of in another video but I hope that was useful if there's any questions you've got about polish termination about APR about how you work things out please comment below and I'll see you again soon thanks for watching

39 thoughts on “PCP Car Finance Explained

  1. Great vid very informative thanks ! I see alot of young people getting roped into finance agreements here in Ireland too .. I had a conversation with a lad last week and told him that you would get a grand car for a thousand pound and under and that finance is a fools game . He still went off and got pcp the madman lol . I bought a 04 car last year for 500 quid it did need a few repairs and a service but i can do that stuff myself so it's fine . I'll have it a few years yet until i upgrade to maybe a 08 if the price is right but until then i will keep this mint and sell her on for a few hundred tested of course ._.

  2. So basically I'm quite confused. This is what I'm looking to do is – Put down 2k deposit ,on a 20k car. Pay the monthly payments and hand it back after three years. But now I'm so confused is do I have to pay the GFV/final payment whatever its called when I want to hand it back or no ?

  3. Sorry if it’s been covered but would a partial payment mid term of say £1000 not affecting monthly’s, always equate to a settlement figure that is £1000 less or does it somehow get swallowed up ? Great vid by the way

  4. Mate this is the best and most straight forward explanation on this topic and I've watched loads. Great stuff keep posting more please. Quick question: Can you sell the car back to them before the VT (and pay what's left in depreciation) ? For example – Say you've been into a PCP for 1 year and your end of year balance is almost the same as what the price for an identical car is on the market(i.e barely depreciated) – Can you go to the dealer and give it back + pay the difference(say £1000) and walk away?

  5. This is madness. I have bought 2 cars in the last 20 years, both new bought for cash. Both served me exceptionally well with no serious faults whatsoever. Now I have saved enough to buy another good new car without borrowing any money. I will do it as soon as my current 12 y.o. car starts developing any serious faults. So far it drives like new. And that is in my book a responsible way of buying cars. If you do not have money for a new car, just buy some used Honda or Lexus. Simples.

  6. I'm still a bit befuddled by the concept of PCP – you pay interest on the total amount but given that you're likely to hand the car back, you never get the underlying asset that you've paid interest on. So you're paying to borrow the value of the car minus the money down but you still owe the balloon at the end unless you hand it back in which case you've paid interest on an amount that you never see back in any form. The sheer amount of interest you're paying is insane versus what you've really borrowed. No wonder car companies are pushing so hard and giving away discounts!!

  7. Hi… just need some advice… I’m self employed would a pcp financial be any good if I took 20k car or shouldn’t I bother .. thanks

  8. Hi Justin , I assume they carry out a credit check for the pcp finance , Is this easy to pass or find out berfore you begin the process, ie you might owe a lot on credit cards , would it count
    against you getting the PCP finance.

  9. Got my car appraised today and am able to sell it back to the finance company and I can a manage payment figure and walk away. For the moment that suits me down to the ground but I’ve needed to pay at least a year and a bit off. Hope this might help in my situation where their circumstances change who are looking to reduce their outgoings. ;). This is also classed as voluntary termination and you’ve came away paying off the car 🙂

  10. @JD Car Finance Hi, I recently sold my car – received a massive offer hence cash in the bank. I am now looking to go on a PCP plan. The car I've seen 'is 32k and I'm looking to put 6-7k deposit but only a 2-3 year term.  Audi have offered me the car I want at 7.3 APR 24 months @ £297 per month. My intention is to enjoy the car and after 2 years return back to dealer and course not pay the balloon payment. Do you think this is a good deal offered?  The term suits me as I dnt want ti commit for too long on a PCP plan and want to return car back and thereafter decide if I need a car or go on another PCP

  11. Car funding is just for mugs,,I always bought a runabout for cash and moved my way up,,for 29 years never funded a car,,, call me an old fart if you like,,BUT I’ve just taken delivery of brand new Bentley GTC, 😂😂😂😂 and paid for it,! 👏🏻👏🏻

  12. Looking up Porsche PCP on their website, you don’t own the car. It’s owned by Porsche finance until the final payment is made

  13. Hi JD Great video very helpful. If you had a ballon amount of say £14.000 at the end of say three years and you want to keep the car would the the dealer offer you another pcp to pay that off. And is it worth doing. thanks

  14. * New video coming soon – looking at buying nearly new from car supermarkets and why, even with a potentially higher interest rate, it can be much better than buying new even with massive dealer incentives. Especially if like me, you want to get of out a PCP agreement early! *

  15. Wait so if say I have an optional final payment of say £20k to own the car, can I take out another PCP and the £20k will be deducted from my next one? As a deposit?

  16. I'm not sure it's helpful to say don't put in a bigger than necessary deposit because 'you'll lose deposit", when you're actually taking this back through lower monthlies. It is the case, however, that what you save on interest you could get back through interest on savings invested (even with today's low rates). Nevertheless, there is some leeway to be had where you can gain from a higher deposit, which is to max the mileage allowance. The higher the max mileage limit, the lower GFV, requiring more deposit for the same monthlies, and which will lower the interest paid on the car still further.

  17. Hi folks,
    Great report off jd,… but don't forget buying a new vehicle is the fastest way to lose money (fact)..
    If your only doing 8 / 10k a year why do you need a brand new vehicle ?
    My honest and humble opinion it's all about keeping up with the neighbours. Plenty of very good quality used cars out there for a fraction of the cost.
    Good luck.

  18. Justin just came across your vlogs via the M140i connection (I actually own an M135i 65 plate). I particularly enjoyed this one as it really brought home the intricacies of a PCP and how at times logic (uninformed) can lead you to the wrong conclusion – ie with hindsight I probably should've halved my deposit as I could've coped with higher monthly payments but thought it better to put in more upfront – you live and learn 🙂 More so when informative vlogs like this are discovered. Kind regards, Kevin

  19. Hi Justin great video. Quick question for you! I am thinking about VT'ing my BMW 1 series as the value is much less than what i owe on it. The mileage shouldn't be an issue but i am worried as I have had the vehicle for 3 years but only had it serviced once… I've read on forums that some finance companies will charge up to £300 for missing service stamps. HELP! 🙂

  20. Also can I ask, does PCP start when you sign the agreement or when you take delivery of your new car? Thanks Gary

  21. So I can take out a PCP to have the manufacturer deposit contribution say its £1500 then settle in full after say 2 days and only pay 2 days interest which is minimal. Is that correct?

  22. Great video thanks. I've never done a PCP before so your video has helped massively, one quick question though…if at the end of the agreement you want to trade the vehicle in for a new one (let's say an upgrade/more expensive vehicle) do they take the vehicle as some sort of deposit on the new one? If so what value do they generally put against it? Thanks.

  23. This is a great video, but something has always confused me. (And yes I realise I'm probably missing a point and sounding like the dumbest person ever)

    If I took out a separate loan from Tesco for example – do I use this money to pay the PCP? if I take a PCP deal with a car dealer, I'll be paying interest to Tesco and the dealer won't I?

  24. Hi Justin,

    I have a 2016 120d M-Sport on a 48 month PCP and am considering trading it in for the M140i. I am sure I am in negative equity since I have only had the car since July 2016. What would you suggest I do? obviously there would be the three months delivery time by which time more payments would have been made.

    Thanks,

    Tom

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