PCP: Do you have experience of this type of finance?

[ronson49]

Hi All.

So i decided im going to get a bike for sure, i can afford one, but i cant save a dime.... If i can go out on my bike on a sunday ill happily pay for it, but i cant sit in the house for the next 6 months and twiddle my thumbs.

So i dont mind paying premium to get and repay. Its my life ethos.

With thay said. PCP is new to me. Finance and Loans arent.

So my local bike shed is selling a £1400 used 125cc bike. I know i only want this bike for 2 years maximum, and i will only use it for learning and getting away at the weekends.


So how does PCP work? For example, if a bike is 1400 and i ask for PCP deal for 2 years, at 12000 miles......

What is the actual repayment plan? I mean is it a crap deal? Am i paying for the bike twice??

At the end of this 2 year process, they can keep the bike, i dont care about it..... So that this means to me is that the value i pay monthly is not to cover the full cost of the bike since my options are:

1) Pay the guarenteed value to keep the bike
2) Walk away and let them take the bike
3) Use it in a part exchange with a new PCP deal


So if a bike sold at 1400 for example, what does this mean? IF it is assumed i have finance left over, i cannot be paying the full 1400 for this bike since it would be standard HP. So i must pay less than 1400 even if what i am paying of this value will be lost at the end of the PCP. (unless i use this value for a new PCP)


Any advice would be grand

[pinkyfloyd]

From the way it looks as I've always seen it is your pretty much renting the bike. You pay your deposit and then pay low rate monthly payments for a couple of years and then either pay the last hefty sum of money and keep the bike or hand it back.

Its better to go private. Whats to say that in 3 years that you've lost your job and have no way to scrape together the 3K they want to pay off the bike. You'll be left with no option but to hand it back and that means you've just paid your X amount a month for nothing.

Might as well buy private and save up to pay outright or go for HP rather than PCP.

If its only a 125 then go for a CG or YBR and you can pick them up for much less then that.
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illuminateTHEmind wrote: I am just more evolved than most of you guys... this allows me to pick of things quickly which would have normally taken the common man years to master
Hockeystorm65:.well there are childish arguments...there are very childish arguments.....there are really stupid childish arguments and now there are......Pinkfloyd arguments!
Teflon-Mike:I think I agree with just about all Pinky has said.

[ronson49]

Thanks for your quick reply mate

Yeah i kind of figured that as well... its almost like im renting a bike and its also possible that Maintenance is included in the contract.

But for me this is part of the Beauty.... The "low monthly payment" and "big bulk payment" which means i cannot be paying for most of the bike.

So a 1000 pound bike might be worth 700 quid in 2 years with 12000 miles. But, i am already expected to pay 700 quid at the end of the PCP contract... if i dont, they resell and get that value.

I dont know how much the bank will take on a payment, but it must be a figure between 0 and 300 over 2 years less the deposit plus whatever they charge for the privilige.

It still must be a small small amount monthly?

[pinkyfloyd]

In all honesty the best bet is to trawl Ebay or classified ads and buy one without any kind of finance deal at all. Might be a pain in the arse saving for one but its better than paying out interest repayments on a bike that will only be with you for a short while.

You can pick up a decent 125 to do your test on for under a grand and if you get your test passed ASAP then you can sell it on for pretty much the same price provided you look after it.

If you buy anything from dealers you have to take into acount they will have bought if off someone in part exchange and they will add their money onto that so they'll make a profit on the sale and thats on top of their overheads. So the bike you pay 1200 for you could have got for much less and saved yourself money. Also when you go to sell the bike on you'll have to take off the dealers mark up because you wont get that back no matter what happens. If you PX it then you'll get a few hundred for it towards the next bike. If you sell it privately you'll get a little more but will still lose money.
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illuminateTHEmind wrote: I am just more evolved than most of you guys... this allows me to pick of things quickly which would have normally taken the common man years to master
Hockeystorm65:.well there are childish arguments...there are very childish arguments.....there are really stupid childish arguments and now there are......Pinkfloyd arguments!
Teflon-Mike:I think I agree with just about all Pinky has said.

[Bendy]

[Rogerborg]

The payments would have to be a lot lower than the payments on a £1400 loan for it to make sense, since you'll end up with no asset.

In fact, if you drop it then you'll have a liability - you either have to put it back to mint or buy it off them.

Even with fully comp insurance, the excess could be more than you've saved going down the "hire" route.

If you want an informed opinion, show us some numbers.
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Biking is 1/20th as dangerous as horse riding.
GONE: HN125-8, LF-250B, GPz 305, GPZ 500S, Burgman 400 // RIDING: F650GS (800 twin), Royal Enfield Bullet Electra 500 AVL, Ninja 250R because racebike

[Polarbear]

These new finance deals have me totally flummoxed. Whats wrong with the old borrow x amout and pay it back over x amount of time.

I went in to buy the wife a new car and they offered me this 0% finance deal, but there was a final payment of over 4 grand. Its almost like they are trying to force you into using the car as a deposit on a new one when the finance deal expires.
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Victory Cross Country American tractor.

[Bendy]

[Rogerborg]

Yup, they actually make sense for some cars, particularly ones with low depreciation. Although you're really just leasing, and so should compare the monthly payments to a straight lease deal as well.

But for a cheap bike that you're liable to drop? I'm not seeing the point.
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Biking is 1/20th as dangerous as horse riding.
GONE: HN125-8, LF-250B, GPz 305, GPZ 500S, Burgman 400 // RIDING: F650GS (800 twin), Royal Enfield Bullet Electra 500 AVL, Ninja 250R because racebike

[Paulington]

There is no point on this Earth to putting a £1400 motorcycle on finance, ESPECIALLY as it's a 125!

You can pick up a YBR125 or similar which will get you through 2 years with an oil change and some petrol for half that price!

Finance is a horrible horrible thing, you are selling yourself to the creditor who is giving you the finance and yes, if you drop the bike and can't buy it from them or can't keep up with your payments they have the ability to legally stretch your arsehole to about a six-foot diameter without even bothering to use a bit of KY.

Don't bother with it, really, just get a cheaper 125 and save the money for when you do your test, it's much more efficient.

Of course, by the sound of it you've made your mind up anyway so it doesn't matter what I say! .

Hope that helps. .
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"Four wheels move the body, two wheels move the soul."
Current Vehicles: '89 Kawasaki KDX200, '99 Yamaha XV535, '00 Honda ST1100 Pan-European, '08 Suzuki GSX-R1000, '08 Mitsubishi Lancer GS4 2.0 TDCi, '15 BMW 1 Series 116d Sport Turbo.
CBT: 27/08/08. Theory: 04/09/09. Module 1: 16/09/09. Module 2: 01/10/09.

[lihp]

[multijoy]

I know BMW do a similar deal on their bikes- low(ish) monthly payments, balloon payment or chop it in for a new machine.

Thing is, the numbers don't work out that much cheaper than a straight finance deal and if you're a bit pony at saving, you'll not have the money for the final payment anyway, so you'll have just leased in all but name.

Does seem a bit odd to do it on a £1400 bike, though. Save the hassle and just get a straight finance deal/loan or find something cheaper, I reckon.
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'11 CBF1000A, '99 C90, '98 CB500
silky666: He rode amazingly well considering his bike is the weight of a small van and had slicks on.