G
Green star
Guest
I am thinking of buying an HP4 but want to know what people think about PCP. Have always done HP before.
Help Support S1000RR FORUM:
You are purchasing a depreciating asset and it all depends how long you want to keep it, I purchased mine on a pcp with the plan to changing it in three years time, making it cheaper to own with low monthly rental and offsetting the cost over the full purchase price
Like chorsley said it depends how long you want to keep it. My issue with it is that after the term of the agreement your hand is forced into doing something with the bike. I'm now at that point in my agreement, my circumstances have changed since starting it and I have to decide if I want to trade it in or hand it back. I would much rather keep it but haven't got the money to pay it off due my up coming wedding. As the bike is worth more than I owe I'm not handing it back so the only option is trading it in. However there is not enough equity left in it to give me a decent deposit to give me similar payments as I'm paying just now so it's not a good position to be in. My S1000RR depreciated like a stone which I didn't expect and didn't help the trade in price but a HP4 would probably hold its value a lot better. I have kind of rambled on there, I would stress that you do your sums before committing.
Trading in is not your only option !
Finance the balloon payment with a loan, set the loan period to allow you to maintain similar payments. You have the bike you want and similar payments.
Shug
GLOBAL MODERATOR
Fair enough that does allow you to keep the bike for the same monthly outgoing, but it's an expensive (and drawn out) way to do it... Paying finance with finance...
At the end of the day, I think PCP works if you're intending to to swap bikes regularly, or are completely sure of having the balloon at the end of it. Handing back almost always sees you more out of pocket than you'd think - the idea is to keep you in the finance loop. It's something I wouldn't personally entertain, but if you do the sums and think it's realistic for you, over the timescale, then lots of people get on fine with it.
Obviously you pay interest on the outstanding finance balance. Compound interest is the biggest difference between PCP and HP.
HP is usually cheaper overall because the payments are higher as the capital is being repaid (so you pay less interest). With PCP the interest will be greater because you offset the capital payment by having the balloon (which you pay interest on), plus if you keep swapping for a new bike every 2 or 3 years on the same pcp basis, you are effectively paying for the depreciation plus interest, you never own the asset.
Sorry if this is teaching you to suck eggs, not my intention. If you want to own the bike and don't have the cash on day 1, do HP.
G
Green star
Guest
Thanks guys for all your advice, I have put a deposit down and looking forward to it arriving in April. Still haven't decided which finance deal to take up, but have time to think about it.
