PCP deals for motorbikes?
Discussion
Just interested in who has bought or is looking into a bike PCP deal
I am tempted by Triumphs PCP deal on a new Street Triple R, just wondered who has bought this way and any major pitfalls?
In the past i have bought bikes outright, but due to buying a house last year im not really in that position anymore?
Over 3 years you can cover 18500 miles, need a £1470 deposit ( sale of my current SV650 will cover this) then £105 per month?
Thanks
I am tempted by Triumphs PCP deal on a new Street Triple R, just wondered who has bought this way and any major pitfalls?
In the past i have bought bikes outright, but due to buying a house last year im not really in that position anymore?
Over 3 years you can cover 18500 miles, need a £1470 deposit ( sale of my current SV650 will cover this) then £105 per month?
Thanks
I looked at doing it with a triumph and a Suzuki but purchased outright in the end.
I have my car on ford options which is no different. It has its positives and negatives but whatever works for you really.
As long as you go into the deal with your eyes open and understand the costs fully there is no downside.
I have my car on ford options which is no different. It has its positives and negatives but whatever works for you really.
As long as you go into the deal with your eyes open and understand the costs fully there is no downside.
Prof Prolapse said:
I still don't understand any reason you would go for a PCP deal over a loan?
They cost a damn sight more, and you're under massive pressure to either give the bike back at the end, or to buy another new one.
The dealers favourite, the PCP deal, that defers a lot of the capital, so it makes it appear more affordable...instead of paying back £300 a month its only £150 a month ....but you are just renting really , paying enough to cover the depreciationThey cost a damn sight more, and you're under massive pressure to either give the bike back at the end, or to buy another new one.
then you are stuck in the 3 year upgrade cycle that keeps the car industry afloat these days
May as well give the monthly payment to a bike hire club and have a fleet of superbikes at your disposal for 1/6 dozen weekends per year.......
That was my understanding when a BMW dealer offered me recently. The APR compared to a loan is shocking (9% vs. ~5%), you also don't need a deposit on a loan, and can take over a longer period. Rather than someone saying "give us £4,000 or your bike", in 3 years time. There's also things like limited mileage, and the niggling doubt as to whether or not this is actually your bike or the banks.
The only advantage I can see is if you have very poor credit history. If that's the case then surely you need to think hard if should you really be buying such expensive toys?
The only advantage I can see is if you have very poor credit history. If that's the case then surely you need to think hard if should you really be buying such expensive toys?
Prof Prolapse said:
That was my understanding when a BMW dealer offered me recently. The APR compared to a loan is shocking (9% vs. ~5%), you also don't need a deposit on a loan, and can take over a longer period. Rather than someone saying "give us £4,000 or your bike", in 3 years time. There's also things like limited mileage, and the niggling doubt as to whether or not this is actually your bike or the banks.
The only advantage I can see is if you have very poor credit history. If that's the case then surely you need to think hard if should you really be buying such expensive toys?
The main difference I can see is that with a straight line loan, you are buying something you CAN'T really afford and with PCP you are buying something you REALLY can't afford.The only advantage I can see is if you have very poor credit history. If that's the case then surely you need to think hard if should you really be buying such expensive toys?
Manufacturers love it as you maxumise interest payments and trap people into a debt cycle where it's constructed to be 'cheaper' to buy a new vehicle than to keep the 2nd hand one.
In my view PCP should be illegal to offer individuals and should be for companies only as the OpEx model and cashflow arguments along with tax write offs make it a legitimate form of financing.
As Sc0tt says - with eyes open and working the figures, no problem, but in my experience most people buying on PCP are the type that purely look at the monthly tick and what they can get for that regardless of the TAP. If they looked at the TAP, restrictions and the 'guaranteed' final value sharp practices, they'd likely run a mile.... Or perhaps not, as it will still convince your neighbour that you are richer and more successful than you are.
Essentially a financial services tax on the stupid - like PPI and pay day loans, but hell - it pays my salary. There's a reason why when you go into a car dealer's these days the first question the salesmen are told to ask is "What is your monthly budget?"
3DP said:
There's a reason why when you go into a car dealer's these days the first question the salesmen are told to ask is "What is your monthly budget?"
The last time I was in a car dealer that question wasn't asked at all. Once I'd found a car I liked then I was asked how I normally financed my cars. 'Cash' I said, 'that's always the best' admitted the dealer.Dr Jekyll said:
The last time I was in a car dealer that question wasn't asked at all. Once I'd found a car I liked then I was asked how I normally financed my cars. 'Cash' I said, 'that's always the best' admitted the dealer.
Cheaper for the old man to buy my mothers car on finance than Cash.He did settle within or just after 14 days but it was cheaper.
Sorry Pete - but you are completely wrong here.....
Have had this argument in lots of different forums over the years, and you rarely manage to convince people to see the light on this, and I can't be bothered to type it all again! People are brought up with the attitude to "not buy things unless you can afford it outright", but then they have an exception for property. Is a b
ks attitude, that in the long run can cost you more money.
PCP is a brilliant scheme if your circumstances are correct. Not sure I would ever do it on a bike, as the value you get would not make the circumstances worth it, however in cars it can work very well. Providing you have the funds to pay the costs of the monthly payments to hand, you can afford it. Gets you into a lot of car for the same (or in some cases less) money.
PCP can be the smart mans way to acquire expensive vehicles.
Have had this argument in lots of different forums over the years, and you rarely manage to convince people to see the light on this, and I can't be bothered to type it all again! People are brought up with the attitude to "not buy things unless you can afford it outright", but then they have an exception for property. Is a b
ks attitude, that in the long run can cost you more money.PCP is a brilliant scheme if your circumstances are correct. Not sure I would ever do it on a bike, as the value you get would not make the circumstances worth it, however in cars it can work very well. Providing you have the funds to pay the costs of the monthly payments to hand, you can afford it. Gets you into a lot of car for the same (or in some cases less) money.
PCP can be the smart mans way to acquire expensive vehicles.
3DP said:
The main difference I can see is that with a straight line loan, you are buying something you CAN'T really afford and with PCP you are buying something you REALLY can't afford.
Not sure I agree that by using a loan you are spending beyond your means.The entire point is with sensible debt you are buying something you can afford, just not having to wait the many years it would take you to save to do so. In exchange for this, you pay a rate of interest that is laid down and explained to you.
I mean presumably you don't take issues with mortgages, or student loans?
Prof Prolapse said:
Not sure I agree that by using a loan you are spending beyond your means.
You see I would never take a loan for a car/bike purchase! However I would use PCP happily. I also have a mortgage as well, and am fine with this.Different horses for courses, and these rules work well for my circumstances.
My last car was on a PCP. My current car is purchased for cash. If circumstances are right, next car will definitely be PCP.
i don’t understand why anyone would chose pcp over a loan either however I can see the positives of it. You get a lower payment per month and you ‘plan’ to stick away a few extra quid a month so you can pay off the lump sum as the end. The reality is, surely, that you don’t stick any extra away because of unforeseen expenses and then at the end of it you’ve paid a st load and have to give the bike back.
On the other hand personal loans are unsecured and you can take it over however long you want. But then your gonna get to a point where if you buy a brand new bike and you take it over 5-7 years that your in negative equity so essentially stuck with a bike that you might not necessarily want. Also knows whats round the corner. You take it over 5 years and 2 years down the line your job goes tits up and your unemployed and cant make the payments.
I work in debt collections for a bank so hear these types of stories every day. However were all adults on here and if the OP is confident that he can keep up with the repayments and has something to fall back on then I suppose that’s all that matters
t load and have to give the bike back.On the other hand personal loans are unsecured and you can take it over however long you want. But then your gonna get to a point where if you buy a brand new bike and you take it over 5-7 years that your in negative equity so essentially stuck with a bike that you might not necessarily want. Also knows whats round the corner. You take it over 5 years and 2 years down the line your job goes tits up and your unemployed and cant make the payments.
I work in debt collections for a bank so hear these types of stories every day. However were all adults on here and if the OP is confident that he can keep up with the repayments and has something to fall back on then I suppose that’s all that matters
I'd say it depends on the bike and the value you can get out of it at the end and that's the gamble and in my opinion the bank usually wins, twice.
Take that 899 deal http://www.ducatiuk.com/news/899_panigale_trioptio...
You pay £3000 deposit and expect to get at best £6000 at the end. The cost of the bike jumps from £14k to up to £17... as you have to find more cash for the deposit of the next bike.
If you sell privately, you might get a bit more back, that's provided your buyer doesn't question the fact your bike's on finances.
If you need to borrow some money [which I'm not against, many people do when bikes reach the price they're at today], take a loan, stretch it in time, say 5 years, sell the bike after 3, reimburse loan. The difference is your deposit for the next one.
Might be simplistic view but that's what I'd do. I'm fairly simple, me
Take that 899 deal http://www.ducatiuk.com/news/899_panigale_trioptio...
You pay £3000 deposit and expect to get at best £6000 at the end. The cost of the bike jumps from £14k to up to £17... as you have to find more cash for the deposit of the next bike.
If you sell privately, you might get a bit more back, that's provided your buyer doesn't question the fact your bike's on finances.
If you need to borrow some money [which I'm not against, many people do when bikes reach the price they're at today], take a loan, stretch it in time, say 5 years, sell the bike after 3, reimburse loan. The difference is your deposit for the next one.
Might be simplistic view but that's what I'd do. I'm fairly simple, me
Fats25 said:
People are brought up with the attitude to "not buy things unless you can afford it outright", but then they have an exception for property.
Fats, people make that exception as property generally appreciates. Thought there are plenty of people who get by renting which is the property equivalent of leasing.You're not meant to keep a bike/car that you use PCP to finance. Instead it's marketed that you can change your bike every 2/3/4 years. PCP's maximum term is 4 years. the way they bring down the monthly payments is by increasing the balloon payment, however they will never allow the balloon payment to exceed the residual value of the vehicle.
Some dealers will even double the residual value in the vehicle at the end of the term if you take it back to them. This is to ensure you remain a customer of theirs and that you continue to make monthly payments.
Throughout the life of the loan, the car (as hire purchase) belongs to the finance company until such a point where you make your final payment. You are obliged, as per the terms of your loan, to maintain the vehicle and insure and tax it (if tax is required).
When PCP was first introduced, it was an excellent way to purchase a brand new vehicle. At the moment, it's an excellent way for dealers to help you finance a new vehicle! to be quite honest, PCP/hire purchase are both expensive ways of financing a vehicle, but who has £20k lying around to buy a new car?
Some dealers will even double the residual value in the vehicle at the end of the term if you take it back to them. This is to ensure you remain a customer of theirs and that you continue to make monthly payments.
Throughout the life of the loan, the car (as hire purchase) belongs to the finance company until such a point where you make your final payment. You are obliged, as per the terms of your loan, to maintain the vehicle and insure and tax it (if tax is required).
When PCP was first introduced, it was an excellent way to purchase a brand new vehicle. At the moment, it's an excellent way for dealers to help you finance a new vehicle! to be quite honest, PCP/hire purchase are both expensive ways of financing a vehicle, but who has £20k lying around to buy a new car?
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