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I agree. I helped my younger sister buy a car on a PCP recently, and I think they are actually a reasonable deal. It is my understanding that finance company g
by pmuk 9y ago
I agree. I helped my younger sister buy a car on a PCP recently, and I think they are actually a reasonable deal.
It is my understanding that finance company guarantees the future value (GMFV) and that the final payment is optional, e.g. you can always hand the car back at the end of the term if it is worth less the the balloon payment.
- jacquesm 9y agoThat final payment combined with the trade-in value is structure such that the dealer is the only party that will give you a good price on the vehicle and you'll get a new car instead of buying out the old one.
- ZeroGravitas 9y agoThis seems to be the crux of the issue. I'd noticed that everyone seemed to be spending more on cars than I felt was wise. After discussing it with a friend with one of these deals he said he basically felt trapped into buying a new car after 3 years.
- brianwawok 9y agoYes. The deal is dandy if you plan to buy every 3 anyway. If you don't, that is the big downside. (Or if you want to drive a lot of miles, etc). Buying a car every 10 years is a lot more fun than every 3..