PEUGEOT's PCP Hire Purchase Plan

[Anonymous]

Hi there, I was wondering if anyone could explain to me fully the terms of the 3 year PCP plan. If a large deposit has been put down at the start of plan of £7,000 and a GFV (last payment) has been quoted as £11,000 what are my choices at end of period? If I don't want to pay the final payment of £11,000 and decided to trade in and start again from new, the car will be worth more than £11,000 so do I get the difference as a deposit to start again with a new car?

 

[RCZ1]

This may help you understand as quoted from the What Car website

At the beginning, the car's likely value by the end of the agreement is calculated and this is known as the Minimum Guaranteed Future Value (MGFV). You only actually borrow the difference between the car's price now and this figure, and you repay the loan with an initial deposit followed by monthly payments.

At the end of the PCP you have three choices. First, you can hand the keys back and owe nothing, or second, you can pay the MGFV and own the car. However, as the MGFV is always set deliberately low, the car should be worth more than this at the end of the agreement, so the third choice is to put this slice of equity down as a deposit on a new car.

 

[Anonymous]

Hi there, I was wondering if anyone could explain to me fully the terms of the 3 year PCP plan. If a large deposit has been put down at the start of plan of £7,000 and a GFV (last payment) has been quoted as £11,000 what are my choices at end of period? If I don't want to pay the final payment of £11,000 and decided to trade in and start again from new, the car will be worth more than £11,000 so do I get the difference as a deposit to start again with a new car?

The car is most likely to be worth more than the GFV (unless you've really neglected it!) if you don't need to put down £7K then I wouldn't as you're kinda losing that £7K, all you're using that for is taking your monthly payments down. Ask your dealer to compare different deposits and go with the least deposit you can you can otherwise you're just giving your money away. If the RCZ turns out to be worth, for example, £13K then you've gained £2K towards your next deposit.

....that's a really low GFV you've been given :eusa-think: what model are you going for? My GFV for my HDi GT was circa £15K when I bought it 14 months ago. I wonder if the new facelift is affecting it......

 

[Anonymous]

Thank you RCZ1 for your reply! I wasn't sure how it worked at the end of the term. I assume that if you choose to walk away at the end of the three year period then there is no equity cash sum paid to you for the difference between their lowest GMV and the realistic market value at the time? My reason for asking is that my sister has decided to lease a car and has sold her own on We Buy Any Car and is using the equity on her own to pay the monthly leasing instalments. She will therefore not have to pay anything physically for at least four years until the money received for her old car is used up! I have no doubt that there are for's and againsts both choices but I wonder at the end of the day if it would have been better to follow the leasing route and pay the instalments off with the equity from my old car?

 

[Anonymous]

She will therefore not have to pay anything physically for at least four years until the money received for her old car is used up!

That's a good way to do it.

I imagine it was a good salesmans tactic but (my RCZ is my first 3 year deal) he said that a majority of the cars on the road these days are bought in this way, especially the way the car prices are going. I doubt the likes of your fancy Beemers, Ranger Rovers etc are actually owned outright at the end of three years :eusa-think:
The plus point for these deals is that your car is never out of warranty as you're replacing it at three years, no major servicing/repair costs, no MOTs etc. Only downside I find is that AT SOME POINT, whether in 3 years or 30 years you'll own some dealer ££££s :thumbdown:

Good luck with the purchase!

 

[Anonymous]

£11000 does sound cheap mines £12225 after 3 years mind the one on my bimmer was £23999 surprisingly i didn't pay that

 

[Anonymous]

Its £11,000 after 3 years because i traded my mini convertible in and paid a deposit of £7,000. Seemed like a very good idea at the time because I have very reasonable payments but I didn't realise at the time that I could have sold mine privately and then leased an RCZ. admittedly for maybe £100 per month more than im paying at the moment but I could have used my £7,000 equity from Mini to make the payments each month, that would have meant I would have physically paid nothing over two years! As I said I chose to do it the other way and after 3 years I will have to decide what to do then!

 

[Anonymous]

I lease my car as most know on this forum but not from peugeot as they where asking funny money...£4000 deposit then £350 a month i got it for £1900 deposit £289/month over 23 months then hand it back and start again it even dropped to £269 a month with a £1780 deposit later that year.The deal comes with 2 years road tax as well it suits me no negative equity,no warranty issues and its 20,000 miles/23 months deal i am currently at 12k miles with with 6 months left to do no way will i do 20k miles more like 17k

 

[Anonymous]

If you go in and see if they have any in stock they normally do a deal. I went to Robins and Day and they had 22 in stock unregistered in Sheppey docks. I paid £279 deposit and £279 a month for 23 months with Peugeot Contract Hire on a 156 GT with free metallic paint (but I went for the only opal white they had!). Got mine delivered to the dealership and registered in a week!

 

[Anonymous]

My GFV at 3 years is 10.5k - that's on a 156 Petrol Sport.

I've read in car magazines that it's quite common for a dealer (From a different manufacturer to the car you want to trade) to offer LESS than the GFV if you want to trade it in.

My last car was a Volvo C30. The GFV at 3 years was 7K. It only had 18k miles on, and was in mint condition, but despite that i was offered 7k at two dealerships, and 7.7K at another. I'm sure that if it had the average miles of 30K on it then all three offers would have been under the GFV, leaving me owing money to Volvo.