Finally got two mintues to nip into a Skoda dealership yesterday and was quite taken aback at the PCP offer plastered on the side of 1.6tdi Elegance on the forecourt. 

 Salesman was unjustifiably over-confident but did confirm that the PCP offer was available on the vRS and what's more, the mileage limits cater for our needs and even given the list price the repayments (in this guise at least) are well under what I paid for my Passat AND for 0%. I almost signed up there and then and to hell with the fact SWMBO would make me sleep and live in it. 

 

 But then sanity kicked in. The reason for low 'repayment' came at the expense of the fact essentially the car is just leased- it isn't likely that in three and a half years time i'd simply splash out potentially more than car's value to settle the outstanding finance. To someone who has always ended up owning the vehicle the thought of PCP suddenly kicks me in the stomach. 

 

 Has anyone else used such a method to purchase a car? Have you chosen to put down against a new model or paid outright? What happens if the vehicle's value isn't deemed sufficient to cover the outstanding purchase price? Given the financial climate is there any guarantee such an offer could truly work out as intended?

 

 You know you're getting older when the brain firmly reigns in the heart... 

You still have the option to own the car at the end of the contract, In the same way as hire purchase except PCP is lowering the monthly repayments because all you are doing is funding the depreciation. After the agreed period you can then either return the car and walk away, pay the guaranteed value agreed at the start of the contract or put any residual value remaining over and above the GFV figure towards another car. You don't technically own a car bought on hire purchase until you've finished paying off the loan.

You do know exactly what the car is valued at as this figure is guaranteed at the outset. If it ends up being worth less, you lose, ( if you decide to buy it) if it ends up being worth more, you win. Normally the car will end up being worth more to entice you to trade up to another car. If the car does end up being worth more than the guaranteed future value and you want to buy the car outright at the end of the contract you only pay the GFV figure, not more.

One thing to bear in mind is that you contractually guarantee that you will not exceed a specified mileage that you agree at the start. If you do exceed that mileage, and you don't purchase the car outright at the end, you will be charged extra for the additional mileage.

Particularly now, with Skoda offering 0% finance and three years free servicing on PCP it is by far the most sensible way to buy a new car, even if you can afford to pay cash up front.

Edited 20 July, 201312 yr by Timoctav

I wish I would have waited a couple more weeks I order my car as I missed out on the 0% and only got the £500

Having just come out of 1pcp and gone into another, as a very high mileage driver (35k pa) I made it work by terminating the contract early. At this point even though I was way over the mileage, it did not matter. Also by terminating, when it comes to bodywork they accept fair wear and tear however at the end of a pcp I you are looking to part ex it, the dealer I am sure will try and take this into account to lower the value offered.

You can terminate the pcp once you have paid off over 50% of the contract.

There is no way the car will be worth less than the gfv if it's in good condition and within mileage. The values are set to protect both dealer and consumer.

Was having this conversation at work yesterday and there appears to be quite a few folk signed up to the same deal with Mercedes. Having read up a bit more about it i'm starting to think it might be the best way to go about new car ownership. I'd panic a bit with the gfv as the mrs' annual mileage is close to the limit but I have no qualms about looking after my vehicles. Its something to consider as the terms do look appealing. 

Was having this conversation at work yesterday and there appears to be quite a few folk signed up to the same deal with Mercedes. Having read up a bit more about it i'm starting to think it might be the best way to go about new car ownership. I'd panic a bit with the gfv as the mrs' annual mileage is close to the limit but I have no qualms about looking after my vehicles. Its something to consider as the terms do look appealing.

You can alter the agreed annual mileage to whatever you feel is realistic, up to an annual limit of 25000, I believe.

Cheers dude, talking to the salesman it seemed to have a pre-defined limit of 12k p/a which could be something specific to the 0% perhaps? Will look into it now i've got my head more around the concept. I (perhaps incorrectly) compare it to house rental which I always see as dead money.  

Cheers dude, talking to the salesman it seemed to have a pre-defined limit of 12k p/a which could be something specific to the 0% perhaps? Will look into it now i've got my head more around the concept. I (perhaps incorrectly) compare it to house rental which I always see as dead money.

Most PCP quoted rates are for 10000 miles per annum over three years. Just for sake of comparison and of course that is the cheapest possible.. Skoda's is up to 25000 per annum, max period 42 months.

I've done a couple of PCPs now. One was at just over 1% for 4 years and I bought the car in May at the GFV which was about £4k lower than the market value for the car. I can't help thinking the dealer would have thought he was doing me a favour by offering just the GFV or a little bit more.

I suspect we'll do the same on our current PCP which has another year to run at 6%, although the car is now a little too small for our needs. When I asked about changing it a month ago, the deal was top book value against full retail on the new car. I could have saved about £1500 using webuyanycar and DTD and about another £2500 by taking the suggested VW Finance. After too many cars from the same dealer I think its time to change rather than be their cash cow. Not a Skoda dealer before you ask who...

Edited 21 July, 201312 yr by Jeeves

It looks like people seem to be positive on the whole idea so i'll consider it, especially as the eldest and youngest have the potential to hit university whilst the term is ongoing.

 

 The only downside is now that i've finally got SWMBO to agree to look at Skoda, she's quite fallen for the Superb 

Does anyone know the excess mileage charge? Or does it depend on model/term/mileage/deposit etc etc?

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We did a PCP on the other half's Mazda 2. She was expected to be doing 25,000 per year mileage so we agreed terms based on that. But with her taking maternity leave during the PCP the total mileage was less than 30,000 after 3 years. The MGFV was only £3,200 or so and she didn't want another car, so we paid it off, yet the car was worth about £6,000 trade in. Meant we kept the car for another year and it is still in excellent condition and we have probably not lost much more than £1000 extra in depreciation. 

Does anyone know the excess mileage charge?

 

 

T's and C's from the Skoda website

 

 

 

† 0% APR representative Solutions available on selected new ŠKODA models with deposits from 0 – 30%, subject to underwriting.

* £149 monthly payment applies to the Octavia Hatch S 1.2 TSI 105PS model based on a 3 year, 10,000 mile per annum Solutions agreement. OTR cash price £15,990: £4,527.79 deposit required to achieve advertised monthly payment followed by 35 payments of £149. Optional final payment of £6,247.21. Deposit shown may be higher than the minimum; a lower deposit will result in increased monthly payments. Further charges may be payable if vehicle is returned. Excess mileage charged at 4.4p per mile. Indemnities may be required, subject to status. Over 18s in mainland UK only. Excludes Channel Islands. ŠKODA Finance, Freepost ŠKODA Finance. Prices and specifications are accurate at time of print. Offers may be varied or withdrawn at any time and are not available in conjunction with any other offer. Retail sales only. Subject to availability on orders placed before 30th September 2013.

^ Model exclusions apply.

** 3 years or 30,000 miles (whichever comes sooner) when purchased with ŠKODA Solutions. Terms and conditions apply.

What if your annual mileage is usually around 6k? Presumably at any time during and at the end of the 3 years, the value of the car would be more so one should expect an increase in the GFV? Is that how it works?

What if your annual mileage is usually around 6k? Presumably at any time during and at the end of the 3 years, the value of the car would be more so one should expect an increase in the GFV? Is that how it works?

The GFV is fixed whatever mileage you do once set. If you do less than the contracted mileage then there should be more profit over and above the GFV at the end. If you do more, meaning the car may well be worth less than the GFV, then you pay the excess mileage charge by way of compensation.

I think that 6000 miles per annum is the lowest you can have on PCP. Might be wrong on that assumption though.

Edited 22 July, 201312 yr by Timoctav

Surely even if you did less miles it wouldn't be a problem, as the car would be worth more at the end. So the differential between the gfv and what it is worth will be greater and give you more deposit on a new car if you want to change.

[quote name="Timoctav" post="3349773" timestamp="1374510072"If you do more, meaning the car may well be worth less than the GFV, then you pay the excess mileage charge by way of compensation.

You only pay excess mileage charge if you hand the keys back. If you use the car as deposit towards a new one, the dealer will make you an offer based on condition and mileage.

I think that 6000 miles per annum is the lowest you can have on PCP. Might be wrong on that assumption though.

Might change from car to car on PCP, but I think we've gone for either 3k or 5k p.a. on wifeys Citigo.

 

Had it since November and she's only just hit 1000 miles, so we're on track

Wow phil, I've do r more miles that that in the last 2 weeks

Maybe ( not for the first time) I'm missing something here. Doing the maths on the example quoted above by timoctav with your deposit and monthly payments you'd end up paying the FULL list price if you paid the gfv at the end, so how would that be a good deal. If the cars worth more due to fewer miles and better condition wouldn't it be worth the same difference if you'd bought it either outright or on 0% finance and you wouldn't be paying full list either (i.e. Not on a pcp) something else to consider is at the end if you wanted to change would you have saved another £5k for your next deposit (less anything you 'made' on the gfv? ) just sounds like a ploy to get you to pay full list for a car and lock you into pcps. If I'm off the mark could someone explian please. Cheers

Wow phil, I've do r more miles that that in the last 2 weeks

I do about 1500 miles a fortnight, but am working in Germany at the moment; I normally do about 6-700 a week myself.  Wifey only drives locally