PCP vs Bank Loan
Discussion
Hi all
Long-time lurker here, first-time thread-starter.
My A7 55 TFSI PCP ends in April next year and I’m starting to look around. I’ve decided on a BMW 240i and have been tempted to change now as I have about £2K equity in the vehicle. I was hoping to pick up an ex-demo, but it’s still fairly soon after launch and because of that and the semiconductor issues, it’s pretty difficult to find the spec I want.
My local dealer has priced up a new build which comes in at pretty much the same as what the demos are going for, but the 4% discount he’s offering is tied to me taking a PCP deal, whereas I wanted to take a bank loan this time so as to have more freedom in these uncertain times.
He’s also said he’d give me £29.5K on the A7 today and equity lock until the new car arrives. My settlement fee is £27.9K and I got a WBAC valuation of £30K. Of course, when the time comes to hand the A7 over, the settlement fee will be £5.7K lower too. Is that in my pocket, or the dealer’s?
At the end of the day, I’m planning to keep the 240 for the long term, so don’t need the flexibility to move. The dealer says I can get out of a PCP at any time if circumstances change by selling the car back to them, which was a surprise to me. He also said I can buy out the contract at any time, but that’s when a penalty would be charged.
If the equity remains with me, it could offset the delta between the PCP cost and the bank loan, which I reckon comes to about £4.2K
Thoughts?
Long-time lurker here, first-time thread-starter.
My A7 55 TFSI PCP ends in April next year and I’m starting to look around. I’ve decided on a BMW 240i and have been tempted to change now as I have about £2K equity in the vehicle. I was hoping to pick up an ex-demo, but it’s still fairly soon after launch and because of that and the semiconductor issues, it’s pretty difficult to find the spec I want.
My local dealer has priced up a new build which comes in at pretty much the same as what the demos are going for, but the 4% discount he’s offering is tied to me taking a PCP deal, whereas I wanted to take a bank loan this time so as to have more freedom in these uncertain times.
He’s also said he’d give me £29.5K on the A7 today and equity lock until the new car arrives. My settlement fee is £27.9K and I got a WBAC valuation of £30K. Of course, when the time comes to hand the A7 over, the settlement fee will be £5.7K lower too. Is that in my pocket, or the dealer’s?
At the end of the day, I’m planning to keep the 240 for the long term, so don’t need the flexibility to move. The dealer says I can get out of a PCP at any time if circumstances change by selling the car back to them, which was a surprise to me. He also said I can buy out the contract at any time, but that’s when a penalty would be charged.
If the equity remains with me, it could offset the delta between the PCP cost and the bank loan, which I reckon comes to about £4.2K
Thoughts?
Take the finance and their finance contribution / discount. Clear the finance afterwards with a loan. Also, what penalty is there? Only clause in my BMW FS was that the balance was to be paid in full.
Can dealers offer a discount when taking out finance instead of outright purchase? I thought the price needed to be the same regardless of how it's funded. They get around this by offering a finance contribution.
Can dealers offer a discount when taking out finance instead of outright purchase? I thought the price needed to be the same regardless of how it's funded. They get around this by offering a finance contribution.
Edited by Mark83 on Tuesday 9th August 15:29
Yes you can 'sell' it back to the dealer at anytime. What they will give you for it and what you owe on the PCP will be the issue
If you would rather use a bank loan, why not just buy the car on PCP and as soon as you have the car withdraw from the agreement within 14 days and use the bank loan to settle. (withdrawing in 14 days is slightly different to just settling). I think this is fairly common practice to secure discounts.
If you would rather use a bank loan, why not just buy the car on PCP and as soon as you have the car withdraw from the agreement within 14 days and use the bank loan to settle. (withdrawing in 14 days is slightly different to just settling). I think this is fairly common practice to secure discounts.
Mark83 said:
Take the finance and their finance contribution / discount. Clear the finance afterwards with a loan. Also, what penalty is there? Only clause in my BMW FS was that the balance was to be paid in full.
Can dealers offer a discount when taking out finance instead of outright purchase? I thought the price needed to be the same regardless of how it's funded. They get around this by offering a finance contribution.
This!!!Can dealers offer a discount when taking out finance instead of outright purchase? I thought the price needed to be the same regardless of how it's funded. They get around this by offering a finance contribution.
Edited by Mark83 on Tuesday 9th August 15:29
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