Final Vehicle Value £11k

[glosrich]

With PCH or PCP you know the depreciation and how much the contract will cost you up front.

 

The Audi might be cheaper to PCH, as the better residual might mean the depreciation is less even if the retail price is more.

[Wardy]

 

I'm not fully getting the attractiveness of PCP yet, the big attraction used to be the option to roll it into another new car after three years, but now PCH offers this at an often cheaper cost.

 

 

I don't understand this statement. How does PCH allow you to transfer any built-up equity into a new car after three years?

 

With PCH, the only option at the end of the term is to return the vehicle.

[silver1011]

It doesn't, I didn't say it did.

 

My point was it is often cheaper to run 2 leases back-to-back with it's lower monthly's than attempting to use the equity from a PCP to fund the next one.

 

It is possible to buy the car at the end of a PCH, or at least it is with Volkswagen Financial Services, you can request a cost-to-buy just before the lease ends.

[Wardy]

OK I see. It's how the sentence reads then.

[pipsyp]

I'm gonna PCH next time I look to get anything new myself personally....I probably won't care too much about Marque either.....just so long as the car fits the bill at the right price.

Problem with the Skoda PCP's...they trade on affordability...in that it's v easy to get into one of their cars with little deposit for not a huge sum of money per month....problem being is the car isn't worth a fart compared to what you've financed almost as soon as you've driven it off the forecourt and unless you have excess £ to throw at the car to make it go away you are stuck with it for the term or at least until you reach VT point to which for most will be well towards the end of term.

Don't get me wrong...most cars depreciate and lose you money but the Mk3 Octavia really is not a good bet for a PCP unless you are set on keeping it for the full term or buying it and keeping it at the end.

I've fallen foul of this and I won't be buying another.

[Wardy]

I'm gonna PCH next time I look to get anything new myself personally....I probably won't care too much about Marque either.....just so long as the car fits the bill at the right price.

 

I think that's the perfect PCH approach - I'd probably get hung up on trying to chase down a deal on something specific!

[silver1011]

That's exactly where PCH wins, for those that don't much care for manufacturer or added factory options.

I'm 4 weeks into my PCH on a MKIII Octavia Scout, but only because it was the best deal out there at the time of signing.

What makes me curious though is that I would have thought it was cars that depreciate less attract the lower PCH deals.

Looking at the current discounts off list and values of used Scouts I will be paying a lot less than the car will depreciate.

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[WelshPlod]

Depreciation arguments aside...... my idea of the MFGV is that is the amount left on the finance.  So if you hand the car back, then that is the debt that needs to be cleared.

 

That is very different to what the car is worth at the end of the term - whether it be positive or negative equity.

[harrysprout]

Depreciation arguments aside...... my idea of the MFGV is that is the amount left on the finance.  So if you hand the car back, then that is the debt that needs to be cleared.

 

That is very different to what the car is worth at the end of the term - whether it be positive or negative equity.

The MFVG and the balance remaining ( balloon ) are not the same thing. Mine is on a small deposit 0% pcp and I will be keeping mine by paying it off at the end of the PCP. I banked the final payment from the proceeds of a private sale of my old car. I'm done with the treadmill, paying for cars for a while, so come next spring I will give the dealer the balance. MFVG is the amout the dealers give you IF you want a new car on a PCP. Not sure if you can transfer to PCH, see no reason why not.  If they want the MFVG from me, they can have the bloody car back!

 

I intend to get the 'new car' feel back by spending a few hundred on suspension and wider track mods. I shall then run it till it falls apart.

Edited 9 May, 2016 by harrysprout

[silver1011]

I thought the MFGV (Minimum Future Guaranteed Value) and the final balloon payment of a PCP were the same thing?

 

There is only one final amount in the paperwork? Pay the MFGV / balloon and own the car or take the difference between the MFGV and the the cars actual value and use the equity as a deposit on another car.

 

The MFGV is deliberately set low at the beginning of the PCP, this way there is more likely to be equity in the car which will make it more likely for people to use that as a deposit and roll it into another PCP.

 

In other words the dealer knows the car should be worth more at the end of the deal. Are you suggesting the dealer should be willing to sell you the car at less than the MFGV?

[harrysprout]

I thought the MFGV (Minimum Future Guaranteed Value) and the final balloon payment of a PCP were the same thing?

 

There is only one final amount in the paperwork? Pay the MFGV / balloon and own the car or take the difference between the MFGV and the the cars actual value and use the equity as a deposit on another car.

 

The MFGV is deliberately set low at the beginning of the PCP, this way there is more likely to be equity in the car which will make it more likely for people to use that as a deposit and roll it into another PCP.

 

In other words the dealer knows the car should be worth more at the end of the deal. Are you suggesting the dealer should be willing to sell you the car at less than the MFGV?

My fault here. What I was trying say, admittedly really badly is that IF the car is worth more than the MFGV. Which in my case is £8865 at the end of a 42 month 0% pcp, I will be paying just that and not a higher figure over and above 8865 which in effect would be equity towards a new pcp. But we all know that he @rse has fallen out of residuals for the Octy :-(

[sniperpenguin]

With the PCP, the GFMV is the "final payment" to keep the car, but also the amount you would get if you just handed the car back to Skoda... Hence the "Guaranteed" part.

 

Mine is set at 10,500 this December (Early diesel vRS MK3 estate on the 0% deal), so my choices are:

 

- Car is worth less than 10K? - Hand the keys back to Skoda and walk... Go look for a fresh PCP / PCH deal. Even if I like the car, there is no point paying a couple of grand over the odds.

- Car is worth about 10K? - Talk to a few dealerships and see what offers are around. If the part-ex prices are rubbish than look at the option above. If I like the car, just settle the balance and keep it as I know its history.

 

- Car is worth more than 10K? - Best outcome (but rarest). Lets say its worth 12.5K... This gives me a couple of grand as a deposit on trade-in combined with new offers, or if I want a PCH I can sell privately and pocket the cash.


Whatever route you take, its all about comparing the costs over the time period. PCP's can work out cheaper than PCH on occasion, just add up all the costs and split into a monthly bill over the time period. Good luck