PCP or just pay it?

[mark09]

PCP...what's the pit falls?

I have the monies to pay the full balance but dealer is tempting me with a pcp deal with plan to px the X5 in 2 years for a new model.

What's the general consensus here?

[X5Sport]

When I looked at how I was going to pay for the X6 I was offered a PCP deal but having looked at the costs and added the whole lot up the charges added a very large sum overall. I tend to keep my cars longer and it therefore made no sense to me. With savings interest rates so low, and the stock markets etc all over the place I opted to pay cash instead. In my case the difference over I think it was a four or five year deal was £24,000. I can't remember all the details, as I did not keep them but I was worried about the excess mileage charge. My job means that particular component of the deal was a pure guess, and I could have been out by many thousands of miles over the top.

It really does depend on your own circumstances, and what your future planning thoughts are.

[MJim]

If you have the cash that will almost certainly be cheaper. Dealers are always keen to plug financing deals as they make more money (from you of course) that way. However presented or dressed up, the cost will be the interest on the amount financed plus the loss in value in the car down to the value they guarantee for it at the end of the 2 years. You can gurantee that the interest paid will be a lot higher than the interest earned on the money left in your savings. You'll probably find they also assume a pretty rubbish value for the car at the end too. There may be other considerations such as security from keeping the cash, but once signed up, then you're comitted to paying more out anyway. I'm with X5Sport.

[Chompers]

Are BMW offering finance deposits on the e70 at the moment? They do from time to time do this and have seen up to £2.5k offered from them on some models. If so may be worth taking the deal and then settling 6 months down the line The only thing and can see on the website is that they are giving the Media pack FOC/ complimentary on all e70's are you getting this Mark? http://bmw.co.uk/bmwuk/pricesandspecifi ... fferId=458

[mark09]

Am getting the 2500 discount under BMW current offer.

The end value is 28k after 2 years on car costing 67k!!!

I est the interest at 4.5k over 2 years, think I stick to paying the cash up front.

[acideraser]

I'd say if you have enough cash to pay and forget about it - probably better and definitely cheaper to pay cash.
I opted for pcp, but only because I want to pay it in 2 years. These days you can request settlement figure any time during your contract so you don't have to pay all interest. The "balloon" payment BMW offers is guaranteed value of the car in two years, usually it should be higher if you decide to return it to bmw, I believe real market value will be at least 10k higher i.e. 38k+, depending on options you got. If you intend to keep car for 4+ years again better pay all now.

[5wany]

Def pay cash if you can, you will secure best deal that way. Would think a heavy discount should be got as well, would aim for 12-16% of list. If they don't play ball, just tell them you'll think about it and that you'll phone around a few dealers.

There will always be one who can do a deal on a no nonsense straight forward cash sale. On the old site there was a thread on some dealers and grassicks of perth did do some stonking deals with delivery, and good things were heard about them. http://www.grassicksbmw.co.uk/

Happy hunting

[StumpyPete]

the question is whether the cash that you sink into the purchase could return more than 4.5k elsewhere for the duration of ownership. If you are sinking 50k of your own money in then that could realistically generate more money for you elsewhere than you are paying in interest. However I suspect you are sinking less money than that, and therefore it will be cheaper for you to go cash.

[mark09]

57k cash (or bank transfer) since cash is a dirty word these days!!

Way I see it I am free to trade a new X5 every 18 months and negotiating just as good I'd not better px deal.

I find the apr on pcp not very attractive tbh

[chetalien]

I always go for some sort of finance deal. I set a monthly budget, then use the car for 2-3yrs sometimes less and then change it. TBH i generally dont buy new cars so I save a lot of money. Cash is great now. SO i wouldnt sink 50k+ cash on anything. I will make that money earn more. If you invest smartly then u could keep the money and probably earn the monthly payment with that money. U will still be left with that cah at the end. good luck. each to his own.

[acideraser]

That's awesome discount mate if you have to pay only 57k for 67k worth car!
Well done

[davyk31]

Make it seem like you are taking their finance as they may sweeten the car deal as they expect to make shed loads on the finance. Then at the last minute change your mind and pay by cash.

The old story that best deal is for cash is rubbish, they make a lot of money on finance so best deal is on their finance. What people mean by the best deal for cash is that the best deal is for buying a car with no trade in ,that way the dealer knows exactly how the deal is for them and they are not factoring in having to perhaps stock your old car for a few months and suffer depreciation.

[Motor84]

I've always been interested in the finance route, never done it though. From what I've seen you must change the car after 2 years to make it worth while, correct? Your car will probably lose £20,000 in value in 2 years? So the question is can you taylor your finance deal to cost you less that that figure over the 2 years. Maybe I'm wrong but it must be feasible for your finance deal to in effect 'beat' the depreciation as long as you swop it after 2 years. But then I guess you need to stump up for the next newer car assuming you still went for an X5.

I agree with Stumpy Pete about freeing up the money to earn elsewhere, exactly what I do with my interest only mortgage! Hey, the whole world is in debt right??

[mark09]

Even buying a car out right, do people still take out GAP insurance? If so were best to get?

[acideraser]

can't tell you were is best to take it but I am going to buy one from Car2cover. I've noticed that GAP offered by my dealer is same and underwritten by same company as the one offered by car2cover on the internet. Exactly the same terms and conditions but prices are way better.