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Off Topic Free money...
- Thread starter RobinPJ
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Off Topic Free money...
Any idea what it's about, there's nothing on their website or Fiat's?
Just found it - an extra £500 discount on Panda and Punto Pops.
Just found it - an extra £500 discount on Panda and Punto Pops.
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How's it free money when you have to buy a car to get it 
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Err, I think you may have been taking me a bit too literally...
Possibly free money in the same way as when I got a letter from a suzuki dealer guaranteeing they would get me a new car and beat my monthly car payment. I bought my car out right so I've paid 0 a month over 6 years...they probably would have got round that by saying yes we can match your current instalments just make one monthly payment of 7200 pounds.
its madness how people do buy cars by what they pay out a month and never look at the actual price they end up paying.
I think many of them just haven't got a grip on the fact that the car isn't theirs and that they are just paying the depreciation plus profit plus interest, I wonder how many of these agreements end in tears at the end of the term or with the hirer locked into another cycle because they can't afford to buy themselves out of it.
Completely agree. We bought our 500 on HP, it has been ours for over a year now, nothing more to pay, no more having to enter another agreement in 3 years and then 3 after that
I suspect the vast majority of buyers on here are on PCP, there seem to be a lot of younger people on here who typically wouldn't be able to afford to actually buy a new car outright. Seem to be a lot less people who buy Panda's on PCP than 500's.
Agreed, a lot that buy on the never never. Don't typically seem to appreciate money IMO unless you've worked and saved for something first, and often ends in tears. I can never understand for example buying a used 3-4-5+ year old vehicle on credit. WTF happens when it goes wrong, as it's unlikely to be under a warrantee, oh that'll be more debt no doubt.
Start low and work your way up, that's what I done.
I'm not against credit I always buy cars that way but by bank loan or in the old days HP it's these PCP deals that I find scary they seem cheap but it is all weighted in favour of the seller and designed so that people end up on a constant cycle of new deals
Credits not a bad thing, but not being able to afford it is, I could be wrong, but this day and age a good porportion of people run it so close to the wind that the slightest thing can knock it all out of balance and cause big issues.
I believe a lot of people view it like the mortgage payment, as long as it stays at the same level and nothing happens with their wage stream then it's something they just pay month in month out don't even notice it going. So if you are resigned to paying it forever effectively if someone says to you that you can have a shiny car for what you're paying for your slightly less shiny car then why not? Read somewhere a ridiculous proportion of MINIs are on finance, somewhere over 75%.
I suspect a similar proportion of 500's are the same. My 500 costs me 0 pounds a month on finance now it's paid off. I could buy 2 sets of tyres a year, change the cambelt and water pump every year, do the brakes every year including fluid and still be better off than someone on pcp!
There is nothing wrong with credit per se - providing it is used sensibly. Credit oils the wheels of industry, finance and governments, and how many people would be able to afford to buy a house outright without a mortgage? Without it, we would be living in a very different (some might argue - better) world. However bad credit which is unaffordable is a different matter.
The PCP schemes are just a finance scheme whereby the buyer is only buying / financing the depreciation on the car, hence the low payments. They are designed however, to generally leave some equity, in the vehicle at the end of the payments (ie the trade-in value of the car is generally higher than the balloon payment or GMFV). This gives an incentive to use this equity as the deposit on a new car, which again is not a bad thing, if you like to change your car at 3 years, thus having the luxury of always driving a car under warranty whilst having fixed monthly outgoings. This appeals to many people who just view a car as a tool or commodity and are not 'petrol heads'. If this is all that bothers you, then it is of no relevance whether you actually own the car or not? There is no coercion to buy another at the end of the deal - I have just had a 19 month (0% interest PCP scheme) come to an end and the letter from Fiat Finance offers 3 simple choices: 1) Hand the car back and walk away 2) Pay the balloon and keep the car 3) Visit any dealer for a valuation against a new car.
I used the scheme as I went to buy the car outright for cash, but was offered the PCP, which made sense as I was able to keep my cash in the bank earning interest whilst borrowing money from Fiat at 0% - simples!
I think that the reason there are so many 500 owners using PCP's is that effectively this has been Fiats method of discounting the 500 via finance deals and not cash discounts on list price. This has been good for all 500 owners as it has helped maintain strong residuals, however outright cash buyers are effectively subsidising the low rate finance deals. The Panda on the other hand has always been available with good cash discounts for outright purchase and is less expensive generally too.
The PCP schemes are just a finance scheme whereby the buyer is only buying / financing the depreciation on the car, hence the low payments. They are designed however, to generally leave some equity, in the vehicle at the end of the payments (ie the trade-in value of the car is generally higher than the balloon payment or GMFV). This gives an incentive to use this equity as the deposit on a new car, which again is not a bad thing, if you like to change your car at 3 years, thus having the luxury of always driving a car under warranty whilst having fixed monthly outgoings. This appeals to many people who just view a car as a tool or commodity and are not 'petrol heads'. If this is all that bothers you, then it is of no relevance whether you actually own the car or not? There is no coercion to buy another at the end of the deal - I have just had a 19 month (0% interest PCP scheme) come to an end and the letter from Fiat Finance offers 3 simple choices: 1) Hand the car back and walk away 2) Pay the balloon and keep the car 3) Visit any dealer for a valuation against a new car.
I used the scheme as I went to buy the car outright for cash, but was offered the PCP, which made sense as I was able to keep my cash in the bank earning interest whilst borrowing money from Fiat at 0% - simples!
I think that the reason there are so many 500 owners using PCP's is that effectively this has been Fiats method of discounting the 500 via finance deals and not cash discounts on list price. This has been good for all 500 owners as it has helped maintain strong residuals, however outright cash buyers are effectively subsidising the low rate finance deals. The Panda on the other hand has always been available with good cash discounts for outright purchase and is less expensive generally too.
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PCP is effectively just renting a car, most people wouldn't rent a house when they can afford to buy, why do the same with a car?
You could take the view that you would rent a car you could afford and take a hit on finance rather than taking the hit on depreciation and being stuck with a car with no warranty after 3 years. Tbf I've always owned outright but cars and houses are different things even in the darkest days of the financial crash no ones house depreciated 50% in 3 years. I personally like owning my car I'm a car person but to people whose only interest is having a car that's as new as possible to keep unforseen costs down it kinda makes sense.
Cars only depreciate when you sell them though.
PCP is effectively a lease scheme with a guaranteed option to buy outright at the end, hence the purchaser is only financing the depreciation. BTW - HP is also a similar scheme but without the balloon payment as the whole amount is financed over the term. It is also leasing or hiring a car during the finance term as the car is still the property of the finance company until the full financed amount is settled.
Plenty of people who have bought their first houses in 2007 / 2008 before the credit crisis / economic downturn will have wished they had rented...........
The risks of buying a house are well known though
You are correct that hp is merely pcp with the balloon payment spread out, but in the majority of cases people just treat pcp like renting and end up paying out a far greater amount owing to having to cover the depreciation costs on multiple cars.
You are correct that hp is merely pcp with the balloon payment spread out, but in the majority of cases people just treat pcp like renting and end up paying out a far greater amount owing to having to cover the depreciation costs on multiple cars.
