Used car PCP - PCP Plus from the AA | Motoring discussion | Back Room Forum

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Thu 22 Oct 2020 09:34

Used car PCP - PCP Plus from the AA - Golf GTDI

Morning all,

Has anyone else seen the Facebook adverts from the AA. They are offering PCP with breakdown, warranty and servicing.

Can anyone recommend this PCP deal? Has anyone used it before?

www.theaa.com/used-cars/pcp

Thank you

Edited by Golf GTDI on 22/10/2020 at 09:48

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Thu 22 Oct 2020 11:25

Used car PCP - PCP Plus from the AA - joegrundy

Lots of things to question here. Basically, it's an add everything together and charge interest on it package. Likely to be expensive but could appeal to the 'can't be bothered' sector.

Includes the totally unnecessary and useless 'paint protection'.

Includes breakdown - could be cheaper/better elsewhere?

Includes servicing - ditto?

Includes warranty - ditto? (We recently saw in another thread that SEAT warranty on 5+ year old cars is a 'named component warranty' with a maximum £1000 claim limit).

''30 day return' subject to unspecified conditions depending on manufacturer - Lots to think about here. If you buy a car unseen you have 14 days after receipt to change your mind for any or no reason and another 14 days to return it. BUT the cost of return needs to be specified in the purchase contract - could be down to you.

No APR quoted. Often see 10% quoted, which is crazy in current situation.

When entering a finance agreement you need to know who's behind it. In my recent (successful) rejection of a car I was dealing with Suzuki Finance aka Lloyds Banking Group. Suffice to say I can see why they were fined £63m in June 2020 for bad customer service.

In summary - this is not a product I'd go for, but I can see why it might succeed with those who cannot see beyond the short term monthly payment.

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Thu 22 Oct 2020 12:35

Used car PCP - PCP Plus from the AA - Golf GTDI

thank you,

I can see that HeyCar and Cazoo have APR's of 9.9% and 8.9% respectively. The AA is the same as HeyCar so the AA deal looks very competitive with the added benefits.

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Thu 22 Oct 2020 12:13

Used car PCP - PCP Plus from the AA - mcb100

If you just want a single DD to cover the car payment, breakdown cover, warranty, service plan, etc, etc, go for it.

If you want a (probably) cheaper solution, do a bit of legwork and find these products elsewhere.

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Thu 22 Oct 2020 12:36

Used car PCP - PCP Plus from the AA - Golf GTDI

thank you,

Always happy to do the leg work.

I guess it depends on how much servicing, breakdown and warranty are.

RAC for example are about £100 a year breakdown

Warranty looks like £250

Anyone know how much servicing is.....on average?

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Thu 22 Oct 2020 12:56

Used car PCP - PCP Plus from the AA - joegrundy

'The AA is the same as HeyCar so the AA deal looks very competitive with the added benefits.'

You have to question how much the 'benefits' are worth. Paint protection = nil. Breakdown - check on MSE and other sites. Warranty - weigh it carefully.

Cost it out. This plan bundles it and charges their APR on the lot. My view is that you could do better. You could always, of course, bargain down the price of the car in exchange for taking out one of these policies (they'll get a comission for selling them) so it could be worth it. Just don't expect any of these 'add-ons' to work in your favour. They're not designed that way - they're designed to maximise dealer's profit.

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Thu 22 Oct 2020 13:22

Used car PCP - PCP Plus from the AA - Golf GTDI

thanks for the tip!

I'll continue to do the maths!

MSE do breakdown for £60 a year with AutoAid - never heard of them?!?!?

The warranty is from CareCar Plan - is that a good product? HonestJohn mentions around £250 a year.

I'll ignore the paint protection.

I still don't know how much servicing is.

Does anyone know? let's say for a 3 year old VW Golf??

Thanks in advance

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Thu 22 Oct 2020 14:14

Used car PCP - PCP Plus from the AA - Andrew-T

I still don't know how much servicing is. Does anyone know? let's say for a 3 year old VW Golf??

If the warranty is still running it will need doing at a franchised dealer and may depend on which mileage point comes up next. Hourly rates can be £75-100 (I am guessing, depends on geography). If not under warranty you can save by finding a trusty local independent, there's one near me specialising in VAG cars.

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Thu 22 Oct 2020 14:17

Used car PCP - PCP Plus from the AA - daveyjp

One of the most expensive ways of buying a used car is PCP. Avoid if at all possible.

Think how old the car will be when you get to the end of the agreement. On a 3 year old car its 6-7 years. Right at the point when expensive repairs may be required.

Would you be happy paying say £1,000 on repairs on a 6 year old car a few months before you need to make the decision on whether to hand it back or buy it?

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Thu 22 Oct 2020 14:46

Used car PCP - PCP Plus from the AA - joegrundy

Be wary of 'Used Approved' warranties.

In January 2020 I bought a 2016 used approved Suzuki baleno. I rejected it for other reasons, but in July 2020 after I paid £100+ for a regas I found that the a/c was not working. The condenser was corroded. Not covered by warranty (nor would it have been if as a result of stone damage). quote £550.

'Used approved' means sweet FA.

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Thu 22 Oct 2020 15:42

Used car PCP - PCP Plus from the AA - Terry W

Using a PCP contract is likely to be more expensive than funding it yourself and getting a bank loan if needed:

you are effectively borrowing the money and paying interest
you need to cover the admin costs and profit of the PCP company

With a second hand car you also need to be very wary of the terms associated with handback at the end of the contract, repairs, condition etc.

For new cars warranty is less of an issue and costs from different companies can be compared. Still need to adjust for end of contract issues, excess mileage charges etc.

Sadly PCP purveyors produce deals which completely lack transparency. Punters focus on the monthly cost which always seems trivial compared to the full cost of buying new.

You simply don't know whether the deal you been offered is because:

the manufacturer prices are discounted for volume or overstocks etc
whether the high margin extras help reduce the apparent cost
whether they are playing "smoke and mmirrors"

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Fri 23 Oct 2020 09:00

Used car PCP - PCP Plus from the AA - Golf GTDI

Thank you Terry!

Why do so many people use PCP then? I read that in 2017 82% of cars were bought on PCP. Does it protect you by providing the get out clause at the end and handing the car back?

Is the car ownership model dead?

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Thu 22 Oct 2020 15:52

Used car PCP - PCP Plus from the AA - RT

The VW UK website gives details of fixed priced servicing but beware as some dealers own fixed prices are more than VW !!!

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Fri 23 Oct 2020 09:02

Used car PCP - PCP Plus from the AA - Golf GTDI

Great spot RT!

Prices from: £184 for models up to and including 2.0 litre engines

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Thu 22 Oct 2020 14:59

Used car PCP - PCP Plus from the AA - SLO76

Casting a quick eye over it, it doesn’t seem too bad actually as far as PCP’s go on used motors. The APR is 9.9% which is pretty much the norm on used cars and from what I’m seeing the servicing, AA cover and warranty are included in this price. The cars aren’t particularly cheap but nor are they hugely overpriced but I suspect there will be much variation as it’s dealers who’ve signed up for this service rather than the AA themselves supplying them.

Personally I’d recommend taking out a bank loan which can be had from around 3% APR and buy the car over 4-5yrs rather than taking a costly PCP at 9.9%. After three years you’re in the same position, you owe X amount on the car but with the much cheaper bank loan you’ve paid less in interest and you can either sell it, trade it in or keep on paying it. It’s far more flexible and cheaper.

Quick calculation and the PCP on say a Corsa at £7595 will cost £1010 more than a 5yr bank loan at 3% APR. It’s not without value though as you get an extended warranty which on cars under 5yrs of age is comprehensive but over that age it’s worthless. The breakdown cover is cheap if you shop around and servicing on a simple car like this isn’t expensive either but add it altogether over 3yrs and it’ll fair dent that £1,000 extra. I am not factoring in the added cost of the cars though which look marginally overpriced. There is however no such thing as a free lunch.

Edited by SLO76 on 22/10/2020 at 15:16

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Thu 22 Oct 2020 15:41

Used car PCP - PCP Plus from the AA - Golf GTDI

Thank you SLO76

So if I can haggle on the price of the car then it could be an option?

If they are making commission on the finance there should be room for a haggling on the metal.

I'm not too keen on a 4/5 year commitment for a loan.

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Thu 22 Oct 2020 17:54

Used car PCP - PCP Plus from the AA - SLO76

“ I'm not too keen on a 4/5 year commitment for a loan”

That’s how they get you lumbered with a costly PCP though. If you think about it then you’ll see that you’re in the same position after 3yrs, you don’t own the car but with the bank loan you have more options. Sell it, part exchange it or keep it and continue to pay the loan. It’s a better way to buy in most cases and you’ll at least have some equity in it after three years instead of nothing. If you get into bother then it’s easy to get out of it and there’s also no deposit unlike the PCP.

I doubt the dealer will get much in the way of commission with a product like this as the warranty, service pack and breakdown cover all have to be funded so you’ll probably find them reluctant to discount. I’d be careful to compare the price tag with similar cars for sale locally and remember that the example I used, a Corsa costing £7600 was going to sting you for £1010 more in interest alone never mind any additional fees or cost on top of the cars real retail value. You can tell I’m no fan of PCP’s on used cars. They only make real financial sense on new motors with a manufacturer or dealer funded subsidy.

Edited by SLO76 on 22/10/2020 at 17:58

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Fri 23 Oct 2020 09:05

Used car PCP - PCP Plus from the AA - Golf GTDI

Thanks again

"You can tell I’m no fan of PCP’s on used cars." - I had a growing suspicion.

Perhaps it time to return to the drawing board or Google new car PCP offers.

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Fri 23 Oct 2020 12:31

Used car PCP - PCP Plus from the AA - Terry W

Why do so many people use PCP then? I read that in 2017 82% of cars were bought on PCP. Does it protect you by providing the get out clause at the end and handing the car back?

An interesting question:

For most people finding up to (say) £20k to buy a car outright is not possible. So some form of periodic payment plan is needed.

If a car is bought using a bank loan, the monthly repayments are based on the full cost of the car. On PCP the repayments are based on the initial cost less the guaranteed minimum value - lower monthly repayments.

Lots of folk feel uncomfortable about approaching a bank for a bank loan. PCP companies stress the joy of car ownership, banks focus on the consequences of failing to make monthly payments on time.

For many people their car is evidence of their relative success both financially and socially. It is about ego, emotion, status etc. A rational approach would concentrate on the question "what do I need a car to do"

Whether PCP or bank loan, one is enjoying today that which needs to be paid for tomorrow. The cautious would rather save and have a contingency fund - very relevant today with Covid, unemployment etc.

You can probably guess, I sit in the "cautious camp". I have only once borrowed to buy a new car - in my early 20s my employer had a car allowance scheme under which payments were based on the cost of the car. So the loan repayments were covered by the car allowace!

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Fri 23 Oct 2020 14:20

Used car PCP - PCP Plus from the AA - Falkirk Bairn

In my opinion PCP only really works if

1) Discounted Interest Rate - 0% to say 3%

2) Money from Manufacturer / Finance Company/ Dealer towards the deposit. Preferably all 3

The punter is not overstretching a budget. Just making ends meet every month is not the time to be splashing money you do not have on something to drain your bank account for 3/4 years and you end up with nothing.

2nd hand and 10% APR is NOT a good deal - walk. Banks lend at 3% or less if you have a good credit score.

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