Why would you put any equity into a PCP, apart from the token £1-2k?

The whole nature of the product is you hand it back or trade up with the equity in the car. We all know there will be very little equity in the car, so it's a clear choice of aiming to break even at the end of the term. SOLD - MY16 SDV6 Autobiography Dynamic - Fire Engine Red, Fixed contrast pan roof, TV, Dual Screen, 5+2, Privacy, Noble paddles.

I have only done PCP's with the 1-2k but I have encountered salesmen (I must admit not LR dealer staff) who have tried to get me to put in more (I walked away) so if they have tried it on me then I'm sure that they have tried it on others 2020 Pangea Green 1st Edition D240 New Defender 110 is here and loving it
2018 Melting Silver Mini Countryman PHEV - soon to be replaced
2015MY Corris Grey SDv6 HSE Dynamic, the best car I have ever owned, totally reliable only a cou0le of rattles in 3 years, now no longer in my care
Also in my garage is a 1996 TDi300 Defender 90 County HT made into a fake CSW

[quote="kmpowell"

As said, I still think a bottom of the price band MY16 AB is your best bet. This for example: http://www.usedvehicles.landrover.co.uk/details/2757340

[/quote]

That doesn't seem a bad price for a 2016,,I might be tempted myself if i could probably get it for 10k & mine & id have a car 2 year newer.or do I keep mine as this one is going to be worth 49k in 12 month & mine be worth 39k so I'm not much better off financially,,I'll just have a newer car with lower mileage as Ive only done 4000 miles in mine in the 11 months Ive had it.

Andy. Andy.
21 Ford Ranger
Gone but not forgotten
Focus RS Red Edition
2015 RRS AB Fuji.
2014 RRS SC Santorini
2016 VW Amarok
2014 RRS AB Fuji
2012 RRS Red Edition Fuji
2015 Nissan Navara
2012 RRS SE Santorini
2008 RRS White
2007 RRS Santorino

This is the quandary most of us are in when you start looking, there are normally as many reasons to change as there are to keep what you have, with your low mileage if I was you I'd keep what you have as at around 4 years old you would hope the depreciation would slow to nearer £5k next year. You get cap trade values free if you use carwow for a quote for a new car, one of the tabs on the email they send you is a free cap valuation, if I pick a 4 year old AB of the LRA website with around 26k miles on & put that reg into the search box it's coming back with a trade in value of around £46-48k at the moment, I would ask your dealer who's offering you £49k at 3 years old exactly where he is getting his numbers from?

kmpowell wrote:

Why would you put any equity into a PCP, apart from the token £1-2k?

The whole nature of the product is you hand it back or trade up with the equity in the car. We all know there will be very little equity in the car, so it's a clear choice of aiming to break even at the end of the term.

In March 2015 I put down a deposit of £20,000 for a RRS HSE (cancelled order with no additional extra's priced at £62k) I was paying around £400 a month over 36 months. At month 24 I sold the car for £55,000 privately and paid off the finance. I was left with exactly £20,000 back in my bank after settling the finance. What did it cost me to run the car = (£400 x 24) = £9600 over 24 months

Play your cards and numbers right and PCP works a treat - had I put down £2000 as you suggest my payments would have been in the region of £1600 a month so would have paid £38,400! Someone correct me if my maths is wrong here?

£9600 over 2 years is good RRSMan I could live with that but 12-13k over 11 month is taking the ,,I lost 9k on my12 red edition that I traded in for for the AB which I only had 11 month.ill probably keep it another 12 month & then see what it's worth as it will only have about 37000 miles on the clock.

Andy Andy.
21 Ford Ranger
Gone but not forgotten
Focus RS Red Edition
2015 RRS AB Fuji.
2014 RRS SC Santorini
2016 VW Amarok
2014 RRS AB Fuji
2012 RRS Red Edition Fuji
2015 Nissan Navara
2012 RRS SE Santorini
2008 RRS White
2007 RRS Santorino

RRSman wrote:

kmpowell wrote:

Why would you put any equity into a PCP, apart from the token £1-2k?

The whole nature of the product is you hand it back or trade up with the equity in the car. We all know there will be very little equity in the car, so it's a clear choice of aiming to break even at the end of the term.

In March 2015 I put down a deposit of £20,000 for a RRS HSE (cancelled order with no additional extra's priced at £62k) I was paying around £400 a month over 36 months. At month 24 I sold the car for £55,000 privately and paid off the finance. I was left with exactly £20,000 back in my bank after settling the finance. What did it cost me to run the car = (£400 x 24) = £9600 over 24 months

Play your cards and numbers right and PCP works a treat - had I put down £2000 as you suggest my payments would have been in the region of £1600 a month so would have paid £38,400! Someone correct me if my maths is wrong here?

Ok so can you now tell me where £18,000 can give me a return of £600 a month? Is thats what I saved by putting the money down as a deposit?

Why on earth do you think I've said you would get a £600 a month return on investment?!? You've not 'saved' anything by putting the money in as a deposit, your monthly cost per month is totally irrelevant. You've simply robbed peter to pay Paul by moving the money from a monthly payment into a capital deposit.

I'm saying that £20k in as a car deposit earns you nothing, you are better off putting that money into investments somewhere and earning a return on it, each month you move the capital required to make the monthly payment. SOLD - MY16 SDV6 Autobiography Dynamic - Fire Engine Red, Fixed contrast pan roof, TV, Dual Screen, 5+2, Privacy, Noble paddles.

I think what RRSMan is saying it cost him £9600 over 2 years for a RRS which works out at £4800 per year,,if he had bought the car outright for cash he paid 62k sold it for 55k it would have only cost him 7k over 2 years.

Andy. Andy.
21 Ford Ranger
Gone but not forgotten
Focus RS Red Edition
2015 RRS AB Fuji.
2014 RRS SC Santorini
2016 VW Amarok
2014 RRS AB Fuji
2012 RRS Red Edition Fuji
2015 Nissan Navara
2012 RRS SE Santorini
2008 RRS White
2007 RRS Santorino

Purchase v sale price has nothing to do with the amount of deposit put in. SOLD - MY16 SDV6 Autobiography Dynamic - Fire Engine Red, Fixed contrast pan roof, TV, Dual Screen, 5+2, Privacy, Noble paddles.

kmpowell wrote:

I'm saying that £20k in as a car deposit earns you nothing, you are better off putting that money into investments somewhere and earning a return on it, each month you move the capital required to make the monthly payment.

a) After 2yrs, RRSman would have had a large interest rebate from yr3, so the settlement would have been much lower. b) the gain made from something else that has a high yield return, would more than outweigh the interest paid, even with any losses incurred. c) dealers don't get any interest, the agreement is with LR finance and all interest is paid to LR finance. LR dealers get a flat/nomial% fee per finance agreement sold.

As I said, each to their own, but I would never have £20k tied up in a depreciating asset class.

I'm going to bow out of this thread, as it's not helping the OP and there's a lot of misinformation flying around rather than fact. SOLD - MY16 SDV6 Autobiography Dynamic - Fire Engine Red, Fixed contrast pan roof, TV, Dual Screen, 5+2, Privacy, Noble paddles.

Kmpowell don't get stroppy now that we don't agree with you

To me your arguement makes no sense. I put in £20k when I bought my car...two years later I took out £20k. All I paid was £400 a month for 24 months and that was it. Had I put down £2k like you suggest and going by your £30 per £1000 theory i would have paid another £600 a month over two years and that would mean I had paid an additional £600 x 24 = £14,400 + £9600 a total of £24,000 for two years use!!! rather than the £9600 I paid!

My man maths tell me I was much better off with a £20k deposit as I got it all back in year 2 and only paid £9600 over two years to use the car!

As for buying cash it depends on the car. I paid cash for my Ferrari 458 Italia as for now it's not depreciating much in fact it has gone up £20k in 1.5 years I have had it!

I'm not stroppy, but your man maths is partially right, but it's also partially wrong becuase you wouldn't have paid £24k for two years use, it would have still been £9600...

It makes absolutely no difference if you put £20k in at the start, or if you paid £2k and added the other £18k to your monthly payments, on a PCP you were ALWAYS going to get £20k back out of the car when you finished the agreement because the GFV would have been set meaning there would have been at least £20k equity in the car.

That's my point. If you could have afforded £1000pcm instead of the £400pcm, then you needlessly committed £20k into a depreciating asset when it could have been used elsewhere. SOLD - MY16 SDV6 Autobiography Dynamic - Fire Engine Red, Fixed contrast pan roof, TV, Dual Screen, 5+2, Privacy, Noble paddles.