[robwils]

Been to a few dealers recently (various makes) , they all seem to want to push the pcp route, seem to lose interest when cash is mentioned. Do they make that much more money via pcp ?
Would have thought a lump sum in would be good for any business ?

[Nick the Greek]

Big margins in finance.
Also with PCP you're more likely to buy another BMW.

[NISFAN]

80% of cars bought outside of business in the UK are bought on PCP. The car industry are pushing it, as people used to paying 'monthly' are easier to get to buy another in a year or two......just see this forum at the effectiveness of PCP as a sales tool.

[....,,,,..,,..]

If car manufacturers had to rely on cash sales, they would either go under or have very limited models for sale.

PCP and similar globally is what gives us all the range of cars we have.

PCP, PCH and business lease is what keeps them going.

[robwils]

It can't be the best thing for us as buyers then ?

[Nick the Greek]

^^^^^

Lol!

You think they're a charity.

[robwils]

Originally Posted by Brigand

If car manufacturers had to rely on cash sales, they would either go under or have very limited models for sale.

PCP and similar globally is what gives us all the range of cars we have.

PCP, PCH and business lease is what keeps them going.

Realise if they relied on cash sales there would be issues. But if most are pcp then some lump sums coming in would be good ??

[malc1]

I had a slightly different plan from them.

They tried quite hard to get me to use PCP when I bought my car but mentioned that I was prepared to pay cash for the vehicle.
So they did a better deal - paid half cash including my old car and arranged for me to pay the other half of the car in 2 Years time.
So an interest free loan from BMW which I could not refuse.
Better in my bank than theirs.
Still buy another though even though no finance plan.

[73henny]

The dealer still gets the cash. It comes from the finance company. You're paying them back not the dealer

[robwils]

Originally Posted by Nick the Greek

^^^^^

Lol!

You think they're a charity.

Obviously not - I'm employed by a business too. Just amazed that they will be prepared to lose a sale that brings in a lump sum. I'm assuming they get a large commission from the finance then ?

[ukbeemerboy]

Originally Posted by robwils

Obviously not - I'm employed by a business too. Just amazed that they will be prepared to lose a sale that brings in a lump sum. I'm assuming they get a large commission from the finance then ?

No, the dealer gets the full price of whatever you pay for the car. The finance company is who you owe the money to. The dealers gets paid a commission for using BMW Financial services, plus from the customers point of view, it normally allows you to buy a more expensive car by only financing a portion of it, which is what a PCP does.

There are deals for cash buyers, however why would you want to put such a large amount of money into a depreciating asset?

[JustChris]

If it appreciates - buy it.
If it depreciates - lease it.

As the saying goes.

[ukbeemerboy]

Originally Posted by ChesterM2

If it appreciates - buy it.
If it depreciates - lease it.

As the saying goes.

Exactly right

[AdamW]

The sales person gets extra commission if they sell on finance and as above they know you'll probably go back to them for another car 2-3 years later. Cash isn't so useful to them as they loose their ties to you (plus the finance company pays them immediately anyway so makes no odds)

[robwils]

Originally Posted by ukbeemerboy

Exactly right

But if my interest on the loan is higher than I would get in bank ?

And I'm not committed to a monthly payment,

Still trying to get this right in my head

And if the dealers are pushing it then it's for their benefit ??

[....,,,,..,,..]

Paying cash is pretty much a throw back to when interest rates were 'normal' and you actually got interest on your savings.

Not actually sure you get far with anything paying cash these days.

Even getting a new sofa, wanted to pay cash, salesman suggested zero % finance over a year and he could give me discount.

It's rather mad how some of it works and that's not even looking at discounts available if they sell insurance or warranties.

[JustChris]

Average PCP cycle refresh now 22months according to my local dealer ...

[Nick the Greek]

Rob

Yes, you're right.

The best sale, in terms of what the dealer makes, is on finance.

Also, as previously noted, it allows people to get into cars they would otherwise not be driving.

A pound to a penny says most people who drive £50k BMWs don't have the Money to pay cash, so finance is their only way into the driving seat.

[Proftinkerpot]

Clearly BMW push PCP deals because they use their own finance company so the interest they charge comes back into their coffers. The added likelihood you will come back and buy again and they get a fresh car to sell as an approved used vehicle. It's all good for them but you benefit by only financing a car half the value of what you actually have and you get to change it regularly.

[....,,,,..,,..]

Originally Posted by Nick the Greek

Rob

Yes, you're right.

The best sale, in terms of what the dealer makes, is on finance.

Also, as previously noted, it allows people to get into cars they would otherwise not be driving.

A pound to a penny says most people who drive £50k BMWs don't have the Money to pay cash, so finance is their only way into the driving seat.

Yep exactly, either don't have the total cash or don't / can't take a hit of 50k etc.

Also some of us have 2 or more cars to juggle with, paying cash for 3 cars can be hard to swallow lol.

Also a lot get company opt out cash for a car, so PCP makes good sense.

[teaston]

Talking of PCP, does anyone know why drivethedeal don't have BMW deals anymore?

[robwils]

Originally Posted by Proftinkerpot

Clearly BMW push PCP deals because they use their own finance company so the interest they charge comes back into their coffers. The added likelihood you will come back and buy again and they get a fresh car to sell as an approved used vehicle. It's all good for them but you benefit by only financing a car half the value of what you actually have and you get to change it regularly.

Not sure you only finance half the car, yes that's what your committed to, as you can pay deposit all monthly payments then walk away, but that would have cost a fair bit??