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Mon 10 Jun 2019 19:25

Dacia Sandero - End of PCP - Advice? - joegrundy

I'd be grateful for the benefit of the collective wisdom, please.

Son's 4 year PCP on 2015 Sandero 1.2 Ambience finishes next month. It will have 40k miles, full dealer s/h, Mot, and one year Dacia warranty left. Balloon payment is £2,400. HJ p/x valuation is £2990 (private sale about £4,000), Dacia p/x valuation is £2880.

New equivalent Sandero is £8,295 (spec has improved). Son contacted dealer to talk about replacement. It seems to me that having cleared the obfuscating smoke of PCP quotations, they want full RRP for their car and are offering £2,400 for his. In effect they're offering him a no-deposit PCP (6.9%).

I appreciate that he has gone 16k miles over the PCP 6k per year, but mileages and GFVs are artificial figures anyway. He has benefited from the increase in Dacia prices and values. Objectively, he has a c.£3,000 car to trade in.

I would have thought that with many potential buyers waiting for the new registration there should have been some good deals around.

PCP suits my son because of the known budget outlay, the lack of risk of big bills, the reliability, etc. The car has been excellent.

He is considering financing the balloon payment and hanging onto the car for the time being (perhaps until the warranty expires) which removes the time pressure. Then he can take his time to find a suitable replacement and reasonable deal.

Are we missing anything?

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Mon 10 Jun 2019 19:40

Dacia Sandero - End of PCP - Advice? - oldroverboy.

Pay the balloon payment and Keep!

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Mon 10 Jun 2019 21:11

Dacia Sandero - End of PCP - Advice? - SLO76

Pay the balloon. It’s a 4yr old car with 40,000 miles for £2,400. Assuming it’s in good condition and has the well tried and tested 1.2 petrol motor it should run for another decade with care. A new one won’t look or drive much different and the newer 0.9 TCe motors are far more likely to go wrong. The 6.9% APR PCP is uncompetitive too.

If he absolutely must buy another one then finance it through a 5yr bank loan at 3% APR instead of the costly PCP. Payments will be similar but after 3yrs he’ll have paid less interest, will owe less and can sell it, part-ex or just keeping paying the loan.

In fact, rather than buying a new and much quicker depreciation Dacia I’d buy a vastly superior and much nicer driving used Mazda 2 on a low cost bank loan. £8,500 is enough for a low mileage 1.5 Skyactiv on a 17 plate, a bit more will get a newer one which can be justified by the money he’d save in interest.

Auto Trader:

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Or a low mileage Yaris. Both will be worth far more than a new Dacia in 4yrs and will ultimately cost far less to run. The Toyota has the balance of the manufacturers 5yr warranty too if it’s been serviced by Toyota.

Auto Trader:

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Buying a low mileage nearly new Japanese supermini via a low rate bank loan is about as cheap and reliable as motoring gets. There’s always demand for them at the other end too and there’s no worries about PCP or lease mileage limits. You’re free to do what you want, as he would be if he kept his current car.

Budget brands rarely stack up when you look at the full picture and compare them to a better quality nearly new used car. Depreciation is far higher and finance rates are rarely impressive. I say stick or buy a better used car instead of a new Dacia.

Edited by SLO76 on 10/06/2019 at 21:24

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Mon 10 Jun 2019 22:02

Dacia Sandero - End of PCP - Advice? - gordonbennet

I too would keep it for that bargainous cost, and continue to keep up decent servicing and then see how it's coping as the warranty expires, then as time goes by if its starts to deteriorate is the time to shift it on.

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Mon 10 Jun 2019 22:23

Dacia Sandero - End of PCP - Advice? - sammy1

I would buy the car with the years warranty and try to sell private for a £1kplus profit and start again with the lowest interest rate poss.

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Mon 10 Jun 2019 23:00

Dacia Sandero - End of PCP - Advice? - Nickdm

At 16000 miles over the agreed PCP contract, I am surprised that the Finance company isn’t trying to apply punitive additional fees! I thought 10-15p/mile was the norm?

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Mon 10 Jun 2019 22:18

Dacia Sandero - End of PCP - Advice? - retgwte

I would pay the balloon payment, puts you in a much stronger position to take your deal anywhere.

Check what special deals Lingscars dot com have on lease deals at the moment.

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Tue 11 Jun 2019 12:23

Dacia Sandero - End of PCP - Advice? - FoxyJukebox

Definitely pay it off. Keep it for a bit.It's unlikely to need much more than 2 services, new brake shoes and a couple of tyres.....plus-if it's been reliable--why should it not continue to be so.

If your son was vigilant-he could start to put some salary money away monthly and build up a deposit for his next one in two/three years time?

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Tue 11 Jun 2019 15:59

Dacia Sandero - End of PCP - Advice? - Eyan1

Pay the balloon payment

It is a good price. PCP doesn’t really make sense on fast depreciating cars .

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Tue 11 Jun 2019 22:38

Dacia Sandero - End of PCP - Advice? - daveyK_UK

Pay out the car and use it as a deposit on a new Sandero with a different dealer.

The 1.0 petrol in the current sandero is meant to be more fuel efficient than the 1.2 in your sons Sandero and drives just as well.

Avoid paying extra for the 0.9 turbo petrol engine, too many stories of this engine in various Renaults/Dacias/Nissan Micra going wrong.

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Thu 13 Jun 2019 11:47

Dacia Sandero - End of PCP - Advice? - joegrundy

Many thanks for the replies and considered opinions.

He has decided to keep the car and review his options later. (Thanks in particular to SLO for his time and effort in providing invaluable advice.)

Thinking about it, I can see why PCP is so popular with dealers. In addition to making it easier to sell cars (and options - 'Only a few more quid a month for the front grille vajazzle kit') and the commission received from the finance lender, there are gains to be made at the end of the term.

If my son had handed back the car he would have had to pay £960 'excess mileage charge' to settle the finance balance of £2,400. The dealer would, in effect, pay a maximum of £1,440 for a car he could retail for at least £3,000 profit.

I have seen reports suggesting that PCP car loans could be the next sub-prime mortgage type crisis. Idly observing the number of newish and expensive cars around I would not be surprised.

Thanks again.

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Thu 13 Jun 2019 12:02

Dacia Sandero - End of PCP - Advice? - retgwte

For the consumer lease makes most sense for high value, low depreciation, cars especially ones that the manufacturer is prepared to offer big discount to lease company (which is why it's worth watching special offers on a lease company that handles all makes web site). Many of these lease deals depend on that low depreciation, but often these are luxury cars that would quickly fall out of favour if a big financial shock hit consumers. So yes it is a sub prime failure for many lease companies in the making, just don't buy shares in them.

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