WannabeOwner
Well-Known Member
You'd need to be High Net Worth for that APR ... although if High Net Worth then not going to need PCP unless it is dirty cheap ...
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PCP Deals in the UK
- Thread starter BLZB0B
- Start date
You'd need to be High Net Worth for that APR ... although if High Net Worth then not going to need PCP unless it is dirty cheap ...
RjbT3
Member
Exactly Wannabe!
That's the way it works in the states. The better your credit rating, the lower the APR you can get. Makes sense. After all, if you have the cash/liquidity you're attracted to PCP if you can make more with the money elsewhere. Otherwise you'd just buy the car outright.
With the base rate and inflation where it is right now, 6.9% APR is a waste of time.
Does anyone know of a better Model 3 PCP option?
40-50k that's pretty average. Low APRs have much lower lending limits (this is partly due to the way the regulations work but of course lower debt -> lower risk). Go to a random car finance site and they're talking almost 10% for that kind of money.
The 4.8% HP from blackhorse is quite reasonable and the lowest I've seen quoted anywhere, presumably due to agreements with Tesla.
The 4.8% HP from blackhorse is quite reasonable and the lowest I've seen quoted anywhere, presumably due to agreements with Tesla.
Yeah that sounds reasonable. Seeing that super low APR PCP deals with high guaranteed residuals are unlikely to be available on the M3 anytime soon, HP looks like a better option in this case.
Look forward to speaking to you on Monday Ed!
Hi Gareth,
To throw a spanner in the works, our PCP provider has delayed the full introduction of their product temporarily....
We are expecting this to be resolved imminently, so please bear with us. We only found out late on Friday and I wasn't able to edit my original post.
Further to comments regarding rates - we're very competitive and have been for over 30 years! Unfortunately for those used to getting 0% deals from manufacturers Tesla clearly won't be offering this.
@EdMag as you are here, a wider question re PCP if I may. Are you seeing significant reductions in GFV across other brands as a consequence of the HMRC VAT issue?
The GFV's on the Model S & X via the Tesla "affiliated" lender have been slashed - £25k on £80k 48 months / 10k miles. I'm unsure how much of the reduction is HMRC VAT led and how much is consequential to the huge price drops at the top end recently.
Do you have a wider view?
The GFV's on the Model S & X via the Tesla "affiliated" lender have been slashed - £25k on £80k 48 months / 10k miles. I'm unsure how much of the reduction is HMRC VAT led and how much is consequential to the huge price drops at the top end recently.
Do you have a wider view?
Great question!
The HMRC PCP debate hasn't affected our GFVs across brands because they are never more than the anticipated residual value (usually set by CAP).
Some manufacturers have been setting the GFVs higher than the anticipated values to lower monthly payments and move more metal, but it does have the unfortunate side-effect of leaving some people in negative equity if they wish to settle the agreement early. This isn't really in the spirit of treating the customer fairly so not something we do.
HMRC argues that if a PCP agreement is structured in a way that it means the user will return the car in most cases, then it is effectively a lease, not a purchase, and therefore the payments should attract VAT. Again, not an issue for us. So all of a sudden, cheap PCPs have become more expensive to the average user.
I couldn't comment on whether GFVs are being slashed across manufacturer finance programs because I don't know!
Tesla GFVs - this is more than likely due to price drops at the top end.
As a business we have 4 Model X in our fleet and 5 Model S on order which should give an indication of our confidence in the brand and residual value which are holding up very well.
High Net Worth Individuals
Just to set the record straight, in the temporary absence of a PCP we can arrange Hire Purchase with a balloon payment at the end (not a Guaranteed Future Value.) These are available to those earning more than £75k pa (so kind of HNWI) and regulated agreements are available with sensible balloons.
Lastly - Rates.
I genuinely don't think we have a single conversation with any potential customer where rate isn't brought up - and it's always "too high". This is normally compared to manufacturer 0% offers or low rate PCP deals, but as we all know there is a reason for the low rates and also a reason why we are still in business after 30 years (part of DSG Financial Services).
We would be delighted to help and advise anyone we can - please get in touch and we will do our best for you.
Ed
Thanks for taking the time to post these answers Ed, a more leading question..
The residuals that appear in the Model 3 calculator, are they based on new CAP values? Just wondering what we can expect to see when both your PCP lender and maybe even Tesla (if they ever get it sorted) might offer? (guessing this also affects the lease companies too, who have pulled all their current offers until they got new prices from Tesla (that's the line from them at least)
A lot of us have been doing a fair bit of 'man maths' to try and work out possible PCP payments at different rates etc..
Dave.
WannabeOwner
Well-Known Member
@EdMag - please do keep us updated.
I replied to Alex over the weekend and your post helped with letting me know why he may not have been able to get back to me today. Would be interesting to know if this PCP challenge is only affecting M3 at the moment, or if it’s a wider challenge? Have spent most of the day budgeting for HP through BlackHorse as a last resort given that delivery is 3-4 weeks away
I replied to Alex over the weekend and your post helped with letting me know why he may not have been able to get back to me today. Would be interesting to know if this PCP challenge is only affecting M3 at the moment, or if it’s a wider challenge? Have spent most of the day budgeting for HP through BlackHorse as a last resort given that delivery is 3-4 weeks away
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With BoJo’s tax plans it’ll make an MS or MX even more affordable75k
Well, at least I know not to waste your time..
So this is essentially you guys setting up a 'loan' in the same style as a PCP with a large loan amount deferred to the end, and regular payments only on part of the loan, but not calling it PCP?
Is the whole NHWI stuff purely to ensure your reducing your risk on the chance of the borrower defaulting on payments?
Sorry for asking what seems like naive questions, when it comes to financing products I have little clue.
Blackhorse will be the proud owners of my Model X in early 2022 with a 50% guaranteed residual and only 7p per mile unlimited excess. With a 1.5% APR I'm not sure how they can make any money on this? I can only presume Tesla paid them to subsidise the deal? Anyway I'm not at all surprised this kind of PCP is no longer available.
My guess would be that Tesla underwrote the GFV. I suspect that they aren't doing that anymore hence the GFV's are being set by the finance provider. Given the huge reduction in prices at the top end and the probable refresh it's no wonder the GFV's are at circa.
I also wonder if it may be a deliberate ploy by Tesla to reduce/halt Model S & X sales whilst they gear up for the refresh launch. I remember they withdrew the 75's not long ago which choked off demand prior to bringing it back as the Standard Range.
All conjecture on my part
My guess would be that Tesla underwrote the GFV. I suspect that they aren't doing that anymore hence the GFV's are being set by the finance provider. Given the huge reduction in prices at the top end and the probable refresh it's no wonder the GFV's are at circa.
I also wonder if it may be a deliberate ploy by Tesla to reduce/halt Model S & X sales whilst they gear up for the refresh launch. I remember they withdrew the 75's not long ago which choked off demand prior to bringing it back as the Standard Range.
All conjecture on my part
This all makes sense and so I think you are right. When I bought my MX 75D in early 2018, the extremely attractive PCP deal was a big factor in taking the risk of buying my first Tesla. It made the monthly cost considerably lower than comparable alternatives (even those with much lower list prices e.g. Volvo XC90 T8) and took away all the uncertainty of future residuals. It made it an easy low risk decision in the end.
I'm much more confident in buying a Model 3 without those PCP incentives, but still a shame they are off the table. Finance companies seem nervous at this point, but at some point they will need to commit themselves with or without Tesla support. Tesla themselves will need to offer something or demand will be severely affected. I expect a lack of PCP options will cause many cancellations as it is. Moving to HP or a cash buy will simply not be an option for many people.
WannabeOwner
Well-Known Member
Might there, back then, having been a flow of money (into "car financing") as a result of quantitative easing? Or could this only have been something that Tesla "sponsored"?
I think it was Tesla sponsored since nobody else was offering anything remotely as competitive at the time. Volvo, Porsche, Audi, Jaguar finance was all far higher and Tesla was the only one offering truly high residual values i.e. 50% on the total purchase price including options. Most others gave a decent residual on the base price only and then zero return on the options, making a highly loaded spec much worse off on finance. 1.5% finance was not available anywhere else either on any desirable high end SUV. It actually made Tesla very competitive in the market at the time. I looked very closely at a high spec Volvo XC90 T8 and Porsche Cayenne and both worked out considerably more expensive despite lower list prices, especially in the case of the Volvo.
