Quote:
Originally Posted by johnbmw6
Mark are there any advantages in PCP over a short peroid say 18 months?.
I usually buy cash and get good PX prices, but change cars within 12/18 months.
|
John, I have PCP on my current 135i which I've had for 16 months, original cost was just short of £40k as it was optioned-up, and the required settlement last month was approx. £4k over the best part-ex price I was offered. So, I've "lost" £4k+the monthly repayments I've been paying on it (£575x16 = £9200), so a total of £13,200, in those 16 months. The part-ex price, however (best part-ex price I've got from 3 dealers), was £22,500 after the 16 months. So if it was a cash deal, I would have lost £17,500.
On the new PCP for the 330D, my deposit was £1k, with the same monthly repayments as the last PCP on the 135i, so total "lost" (not all lost as I've obviously used the car for 16 months, and obviously the £4k finance settlement shortfall was covered by the dealer, though that would have been money in my pocket/discounted off the car/reducing the monthly repayments, otherwise) was £14,200 (vs £17,500 if paying cash), so a difference of £3,300 (assuming your cash would otherwise have been just sitting in the bank, rather than gaining interest or being invested elsewhere, which is obviously even more of an advantage to using the PCP!).
That's even with the interest rates of both PCPs obviously taken into consideration with the settlements and monthly repayments (and the APR was considerably higher on the 135i PCP than the 3.9% offered on the 330d), so if it was 3.9% on both the old and new cars, the difference would be even more.
So, if you're looking to change cars in short periods, particularly with the low APR offered on the PCP by BMW at present - and the extra flexibility and movement meaning they're perhaps more likely to do you a "deal" on the PCP, as they obviously get commission on the actual PCP finance as well - you may be better keeping your money in the bank and going for a PCP in the future (assuming the rates are good at that point, usually the last quarter of the year I think)?
If you were intending keeping your car for closer to the full term, I'm not sure if PCP would be better then, given the balloon payment (about £15k I think on my 330d); but for your case, I think it would be better financially, and you also get to hold onto your capital...