[helart]

Do Renault insure the car for 7 days like they did when we last bought a new car as my Insurance is due to run out march 16 ,if so I might just stay with Renault or start new Insurance when that runs out...
I bought our last 2 cars using PCP over 2 years and paid it off each time...has anybody experience of NOT paying off PCP and changing before the term is up??

I have still not worked out which term to go for ,any advice would be welcome

 

[Georgiegirl]

I've finished a PCP agreement off early to trade up to a new car a couple of times and it's really easy to do but pot luck on whether you have any negative equity in the car to clear. Obviously the closer you get to the end of the agreement the more likely you are to be able to get out without anything to clear. This time I realised I had made a mistake and now I am paying the price (literally) of coming out of a 4 year PCP after only 18 months

 

[helart]

Thanks GG...I was advised by a salesman to go for 4 years and NOT put in any money then use the money when we changed in future..the inference was a lot of his customers go for the 4 as its cheaper per month then change after 2...I was always a pay for car person but in hindsight should not have paid off and used some of the money to purchase new every 2 /3 years..as I have had new Renaults from 1991...

 

[Frank Bullitt]

...I was advised by a salesman to go for 4 years and NOT put in any money then use the money when we changed in future..the inference was a lot of his customers go for the 4 as its cheaper per month then change after 2...

Rule #675 of car buying - never take financial advice off a car salesman! Part of his bonus is structured around how much interest he can extract from each sale.



The smaller the deposit the higher the monthly payments and, more importantly, overall payment because the interest is loaded into both the GMFV (Guarenteed Minimal Future Value, which is the lump sum) and monthly repayments - a bit like the mortgage the first payment is more interest than the last (much, much more....); paying a larger deposit offsets this so for example, putting £6,000 down on a car then paying £120pcm for 4 years (then putting £100pcm into a future car fund) will cost less than putting £1,200 down and paying about £240 (depending on the interest rate offered) - also, if you want to trade-in at 2 years you'll have some value in the car from the payments already made and the cash deposit - paying a lower deposit leaves you with a significant negative equity risk in the first half of the deal.



If you must go PCP then pay the biggest deposit possible, if you want to keep with that manufacturer then agree the highest mileage possible (to reduce the size of the GMFV as a 90K 3 year old car will be worth less than a 30K 3 year old ) as this will load-up the payments but continually improve your equity - essentially, stack as much cash up-front as possible. A friend of ours agreed a 90K/ 3 year deal on her Fiat 500 1.2 Lounge but due to a job change she ended up doing only 50K in 3 years (it was 34K in the first year...) - her GMFV was £3,200 which she paid a few months back but the car will easily sell for £5,500-6,000 privately...

 

[Perusal]

PCP may well be the way forward for you but just in case you weren't aware......Renault are currently doing a 50% deposit and 4 years 0% which we have just gone for. The only slight negative is that we have to pay £299 for the 4 year servicing package whilst I think it's included in the PCP package. In our case the monthly payments will be around £156 per month but the plus is we pay no interest charges. Given the £1000 contribution from Renault that we also received it made the car very attractive.

As I said this may not suit you but at least you should be aware of it. Out local dealer sold 7 Capturs last week alone and then sold us ours on Saturday whilst another couple were ordering one across the showroom. 9 in one week suggest Renault are doing something right....