UK PCP finance question

[electric123]

Hi all

Can someone answer me a question: I have had a quote for finance from BMW for an i3 BEV at 7.3% with a balloon after 4 years of approximately £11,000. Alternatively, I could do a 6 year loan at 4.9% per cent with almost the same monthly repayment, and according to amortization tables, if I chose to pay it off after 4 years I would have £9000 remaining. This would obviously increase my "equity" for part exchange but also mean I could just carry on the payments if I didnt want to change, and in two more years I would own the car outright. Lots of people seem to say PCP is a good idea, so am I missing something??

Thanks in advance!

 

[elptex]

This has been asked/discussed loads on here. Please search "PCP" and read up

 

[Dee123]

Yes this has been discussed extensively. When I was ordering I looked through the posts as well. PCP is for those who want a car for only a few years and don't want to worry about resale value. Or those with low deposits.

If you do the math, a bank loan will be cheaper for you if u have good credit rating. Fact. However, it's a gamble with the i3 on future resale value if u choose to change cars after 3 years. If u will keep it for longer, then that's not so important?

As a business management analyst with specific interest in game theory, I am not a fan of PCP particularly at high APR. BMW will protect themselves from making a loss through PCP on the i3. The GFV does them no harm at all but hey, it gives customers peace of mind