I have an offer card that has virtually the same figures as you quote above but in addition there is a 'Final Repayment' amount of £6,242.00. You have a choice of either paying this and keeping the bike making the total cost £14,387.75 (Against a cash price of £12,983.00). So it will have cost you £1,404.75 to buy it over three years rather than up front. Alternatively you hand the bike back to the dealer and (as long as you have kept it in good condition) he will hand you a cheque for £6,242.00 to walk away or to use against a new bike or new PCP. A little down on your £7,000 estimated value but not too far out. Total out of pocket against buying for cash about £2,000 but this could be offset buy investing the £10,000 initial saving for three years. I think I have that all correct after chatting to a dealer a few weeks ago but check it out to be sure.[/QUOTE] Sounds to good to be true, so after the 3 years you pay a total of £8385.25 which is the deposit, monthly payments etc, you then hand the bike back to them and you get a cheque back for £6242 meaning all its cost you is £2143.25 or £59.53 a month over the 3 years. I thought you hand the bike back and wake away, start all over again or pay the balance and bike becomes yours. Be very surprised if you hand the bike back and you get a cheque. Trip to the dealers in called for me thinks!!
Id never finance a toy. If i cant afford it outright i wouldnt buy it. White goods cars on the other hand i would pcp.
Here's an example Ducati - Multistrada 1200 TriOptions Finance Trouble is the dealers seem to push the Trioptions finance only, sure you can do better if only the dealer looked at other finance companies, but they don't. Personally I'd buy an ex demo or a 6 month old bike which has already lost a chunk of money and take out an independent loan, £195.00 month gets you £10k and you're paying it off from day one, and if you decide to p/ex 6 months later you don't have to pay off the loan first, it's your loan, you can do what you like. PCP's are fine if your sure you're going to keep it for the 3 year term. Some companies offer paying off the monthly interest only, about £40.00 month on £6k, thats the cost of a take away a month, as i say if you buy sensibly in the beginning you're not going to end up in negative equity which you could if you bought new and decided to sell in 6 months..
I bought my 2010 model when they were in short supply with the frenzy of a new model so it was full list price and damn hard to find an Ohlins touring model at the time. From memory I paid £14,500. Sold it 3 years later for £9,500 with 17,000 miles, 35% depreciation which I think was not too bad at all. You'll find the same story of big depreciation in the first year or two with almost any bike or car. It feels very much like the dealer is nailing your hat on, but they have to make money. Look at how many bike dealers have disappeared over the last few years. I wouldn't fancy opening up a bike dealership in the current climate. I'm not defending the op's dealer just giving an alternative view. Suggestion which i'm sure you've done, but never accept the dealers first offer, haggle and try various dealers for the best deal. I've done that with numerous cars and bikes and it's amazing how much better the deals can get from the initial offer.
Running the Tri options myself on my base Multi, because point one strangely enough didn't have 13k lying about and having a feeling an update was on it's way means in 3 yrs I get the mk3 version of the new one. The 6k is not a cheque the dealer gives you, it's what he pays the finance company to settle account, this should be guaranteed as long as the bike is in a fair and reasonable condition. So bottom line is you get account settled and walk away! Obv the dealer and Ducati want you to go for another so to encourage their most likely to give you all/most of the deposit of the next bike on top of settling the last. I've got 2yr warranty (which I'll extend to 3), doubt I'll get enough mileage for 15k service and because it isn't 'my' bike I feel less inclined to 'tart' it up too much. Which in my usual case means I'll save a fortune :Woot:
Enigma...exactly why mine is stock and will go hopefully before the 15k service. Hoping tyres are the only expense I'll have except fuel
PCP is a way of a company keeping people paying rent basically. While ur paying your rent on ur bike you won't have the spare cash lying around to save for another bike so u'll definitely opt to get a new bike at the end coz you'll want the new shiney model and won't wanna pay 6 or more thousand for a used bike. So ur hooked or u'll end up paying thousands with nothing to show for it. It's fine if ur just getting a bike for a commute but as previously stated by ppl on PCP they don't by parts for there bike, not really bothered bout looking after them and they probably don't chersish their purchases. PCP has its place but motorcycle toys I dont think so.
I may be wrong, but as PCP means the bike is not yours, I don't think you are "allowed" to add any farkles or mods to it?
Not at all. The only time the condition/farkles/mileage actually matters to the finance company is if you hand it back to them. If you do a deal with the dealer or sell it privately and settle the balloon payment they won't care as they don't see the bike.
A lot of misconceptions about PCP here. Its not all bad. Imagine the market in s/h bikes collapsed, for example because the oil ran out or the financial world fell apart again.Hypothetical example maybe but it has happened before. You could hand the bike back at the end of the PCP with a Guaranteed Value between you and the dealer of say £6k. But the market has dropped so much the bike is only worth £4k. Dealer/finance company loses £2k. Or the market in s/h bikes gos the other way and jumps dramatically. The GMFV is still £6k as agreed at the start of the finance but say the bike is now worth £8k. You win £2k as long as you p/ex for another or buy it outright. As long as the interest rate charged is low, the PCP can work in your favour. Bikes will never be a good investment for your cash so why have loads of cash wrapped up in one?
Not sure I agree with the above. Whilst I appreciate your insurance reason is an analogy , but it is a pretty left field one to justify it with. PCP can never work in your favor financially , its a pretty flawed business model if it does. If however it gets people on a bike with terms they are happy with, then its definitely a good thing for all concerned.
I agree with some of what Duke says. But basically if you are lucky enough to be able to pay cash up front it will be cheaper to do so by about £1400 on a £13000 bike. This is a lot but will be reduced by anything you can make on the cash still in the bank if you go PCP and invest it instead - (you can make 4.5% in dividends if you buy National Grid or Shell shares for example). And any inflation will reduce the real value of the debt too. At the end of the term if it has been a virtually trouble free bike pay the £6240 if you fancy keeping it for another year or two. If troublesome hand it back to the dealer and start another PCP, pay cash or go elsewhere. Not a totally bad set of choices IMO.
If you have 15k burning a hole, its great to have the choice. My PCP isnt the best. Going to cost me c3k if I take the full term, but I dont have 15k laying around and the monthly amount was about right so I bought it. But....I also knew a new model was coming, its 3 yr term of course a new model! And its more likly the bike will be worth less than the 8800 gtv anyway, by how much who knows but it will have 18k on it afte r3 years (if it stays) so suspect quite a bit less on trade in. So having done the numbers, loan v pcp, I was willing to pay a bit extra to mitigate the risk of a bike worth 7k at the end, that I would still be paying for after 3 years as the monthly needed to be over 5 years. Also I have the added protection that if Ducati want to fight about a claim for warramty at any stage, its not mine, they can fight that out with Black Horse.
