Probably a dumb PCP question..
 

Having never bought a car using PCP before I am wondering, is it better to have a higher or lower GFV, or is it something you can't control?

GFV is set by the dealer, out of your control

Not too sure how it works but the Ford dealer we tried first said something about that being part of the figure you get towards your next car, sounds like a bit of a scam to me but I suppose if it's higher than your final payment to own the car outright then that's the bit that goes to your next car, if that makes sense. :wonder:

I'm not 100% as it's the Mrs that did that for herself, I think I shal just lease for 2 yrs as that seems like the cheapest option and saves me about £300 a year before repairs.

So the final value is your lump sum payment at the end of the term, the theory is that the car will be worth more than this at the end and whatever it is worth over the actual part exchange value you can use this as deposit towards the next car.
The alternative is that you just hand it back and walk away (car is checked over and has to meet a standard or else you're are subject to costs), or you finance the remaining amount or pay outright (if you finance the amount again you are paying two lots of finance on that balance)
There is also this thing about it being able to hand back mid deal, bear in mind new cars and the colossal amount of initial depreciation so it's not that easy to get out as they make out if you switch cars often. (New cars, pcp second hand cars also)

Once you get in a PCP deal, you'll have to pay a balance off eventually, albeit in 3 or 30 years (if you continue to change car at every end of agreement), or just hand a car back but then not only will you have lost the initial deposit, you'll also have no car, and no deposit for another one? It seems to me that you'll end up losing big style eventually unless you always renew every x amount of years until you drop dead?


Sorry about the ignorance, i've always paid cash or had a personal loan for cars. I do currently lease my car, but thinking about options for my Mrs who receives a car allowance from work, and one of the t's & c's is that you must produce a V5C to the employer, which you obviously cannot do with a lease deal

It all depends how much you pay up front, my mrs up front payment was a £640 MGZR that she'd had 9 months worth of motoring out of and was probably worth £40 in scrap value, she now pays £150 a month to drive a new Vauxhall Viva SL, between 60mpg, no tax or mot and no tyres to buy for probably 2yrs (the MG needed a full set before she got rid) equates to around £1200 a year, so she is effectively driving a new car for £600 a year which is still less than what the MG cost to buy and quite frankly it was about knackered.

As I have said on other threads it's a bit of a no brainer, and the numbers only get better when you drive something like my 11yr old WRX Wagon that has even higher running costs and is worth ish £3k, I get to put that in my pocket and save upwards of £300 a year if I get something @£150 or below and that's before repairs / oil changes.

I also get a new car every 2/3yrs, what's not to like. :wonder:

Even with an up front payment of £1/2k what would you buy for that money and what would it be worth in 2/3years and more importantly how much would you have spent to keep it on the road when things go wrong with it, as is to be expected really.

The thing about having a new car (especially for someone like my Mrs that has Zero mechanical knowledge or interest in knowing) is you know it's not going to need anything for 20k, no tyres, no brake pads, no new exhaust or niggly things that fail on old cars, no worries come MOT time if it's going to pass, and if something does go wrong you just take it back to the garage and it's under warranty and they give you a car to use while it's in there.

Other option is you go out and buy a new car with cash or as you have done in the past a loan, so you either tie up £15 to 30k in a rapidly depreciating asset and earn no interest on your capital or you pay interest on a loan as well as getting hit for 40/60% depreciation, so you lose at least half of what you put in regardless.

PCP or lease you know pretty much to the penny what it's going to cost over the given period as long as you can afford to pay each month, if you no longer want to continue you just give the keys back and walk away.

My wife took out a PCP for a Suzuki Swift. She put £1100 deposit down and then paid £134 for 43 months. With the documentation fee, in total she paid a shade over £4700.

The GFV was £3250. She returned to the dealer at the end of the agreement, handed back the keys, got keys for a new one and drove off in it. Her monthly payments went down by £16 as the dealer valued her old one at £4500.

In most cases the dealers set the GFV fairly low in the hope you'll trade your old one for a new one.