Why is it not like renting? You pay a deposit, you pay a monthly fee, you don't own the bike unless you decide to purchase it by making the final payment?
Because rental is more expensive and the payment covers some form of maintenance. Pcp allows you to vary your deposit, monthly payment and final payment to suit you. It is not designed to make you the owner if the bike at the end of the agreement, although you can. It is designed for individuals who want to change vehicles on a regular basis, but have the option to own should they wish.
Because you do own the bike WHEN YOU CLEAR THE BALANCE exactly the same as a loan. If it was rental, you would just hand it back and have sunk all the money, any option to buy would be a seperate agreement. The difference is, if the balues plummet and its worth less market value than the outstanding amount you can walk away. Or get a loan over x years, work it so there is 7k left after 3 years, sell bike at 3 years and clear loan and take any of the capital as yours. Same principle except someone else is taking the risk its worth 7k not the buyer
Spot on Bradders. You have the option to buy on a PCP. You don't on Contract Hire ( not used in bikes AFAIK) or even HP come to that. HP is effectively renting the bike as well as you don't own it until you have paid all the finance back. that where its name 'Hire purchase' comes from. Its not for everyone and I can understand why some want to pay cash up front but don't knock it as a con because it certainly isn't that.
Interesting stuff fellas Still think I prefer to pay cash and buy used at a point where the bulk of the depreciation has already hit, but I can see that if you want to regularly switch to the latest model but have the option of buying should a particular bike become a keeper then that flexibility is useful. What happens if circumstances change and you just want to get out of the agreement early? Do you just hand back the bike or are there penalties? I guess since the monthly payments are typically low that would have to be a fairly extreme case, but just wondering... cheers, Dom
penalties. agreement specific I'd expect. The other thing to cover off is a GAP insurance policy, as you write your bike off you will be left with a headache when the insurer wants to short change you and you have no bike + a balance to finance!!
Thanks to all that offered advice. Just a quick update in the end despite having a loan agreed I opted to get the bike on the pcp scheme as I can see myself changing it every few years and if I can do that I think I will enjoy the bike more as I won't be as bothered about using it and putting miles on it and it getting wet ect like I did with my 999s. Will still look after it but won't be as OCD about keeping it clean and so forth as will just change it in a few years. could see me getting a panigale next time just to own but probably wouldn't want it for any more than a year. Can you do that on a pcp scheme and people have done pcp is it better value wise to change every year or run the 3 years
normally 2 years seems the min but remember most depreciation lands in year 1 so over a year it would be expensive per se
so I've read this post from beginning to end and have the following question. Can somebody explain PCP to me?
HP but with lower payments and a balloon payment that you can make to purchase at the end if you want....
To change within the year will be expensive as the settlement figure will be quite large, leaving you little value in the bike.
Are there many folks who took advantage of Tri-Options PCP last year? It seems a good way to access brand new bikes.
