Finance Honda PCP plan.

JB75 · 25th August 2006, 10:27

Does anyone understand this?

Honda offered me this when I first approached them earlier in the year but, as I had reservations, I opted to go with hire purchase. Yesterday evening however I learnt that someone I know has a Civic on order and is seriously considering the PCP plan. She reminded me that, after three years, Honda present 3 options:

Pay an agreed 'guaranteed minimum value' figure and purchase the car outright.
Hand the car back, provided it's in reasonable condition, and walk away.
'Trade in' the car for its 'guaranteed minimum value' against another Honda.

I was confused by the final option though and questioned how you could trade in a car, the final payment of which remained outstanding. Does anyone know if Honda give you the trade in value against a new car, or just write off the remaining payment and put you onto a new deal? I'm wondering if I might be able to transfer my agreement (probably not I guess).

Big-Chris · 25th August 2006, 10:38

I've gone with Honda PCP,

basically the guaranteed minimum value is set to match the value of the outstanding finance, so that when you return the car you owe nothing. However, it is usual (expected) for the car value to exceed the minimum to leave you with a nice deposit to put on your new car. The third option (I think) allows you to transfer the remaining value to a new car (effectively putting down a deposit) straight onto a new Honda

no doubt someone will correct me

richierich · 25th August 2006, 16:05

As I understand the PCP thing, the 3rd option does not allow you to put the guaranteed minimum value down as a deposit, but the balance of the actual value less the minimum, which is usually quite a bit lower than its actually value, like the balloon payment, if you sold the car privately you could make more then pay off the outstanding credit and pocket the balance, although I am not sure of PCP allows this. I know the scheme I have my company Civic on does allow this. I have 3 options at the end of 4 years, pay £3500 for the car and keep it, sell the car privately, pay the lease company £3500 and pocket the change or give it back and walk away.

I am thinking of buying it, as I think £3500 for a 4yr old car doesn't seem too bad, although it will have the starship miles to go with the look, at least I know who has driven it, and how it was looked after.

Martin · 25th August 2006, 22:10

The third option allows you to use any equity in the car as a deposit towrds a new one.

My business manager tends to under value a car at the end on the term by as much as the clients budget allows, which returns greater equity.

E.g.

GMFV = £5000

Part ex value = £6000

Your deposit = £1000

every ones a winner, frankie skinner

25th August 2006, 10:27	#1 (permalink)
JB75 Locking Wheelnut Join Date: 18th August 2006 Posts: 174 Thanks: 0 Thanked 0 Times in 0 Posts	Honda PCP plan. Does anyone understand this? Honda offered me this when I first approached them earlier in the year but, as I had reservations, I opted to go with hire purchase. Yesterday evening however I learnt that someone I know has a Civic on order and is seriously considering the PCP plan. She reminded me that, after three years, Honda present 3 options: Pay an agreed 'guaranteed minimum value' figure and purchase the car outright. Hand the car back, provided it's in reasonable condition, and walk away. 'Trade in' the car for its 'guaranteed minimum value' against another Honda. I was confused by the final option though and questioned how you could trade in a car, the final payment of which remained outstanding. Does anyone know if Honda give you the trade in value against a new car, or just write off the remaining payment and put you onto a new deal? I'm wondering if I might be able to transfer my agreement (probably not I guess).

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This thread is about: Honda PCP plan., it's in Buying, Dealers and Servicing at the Honda Civic forum Civinfo; Does anyone understand this? Honda offered me this when I first approached them earlier in the year but, as I had reservations, I opted to ...

25th August 2006, 10:38	#2 (permalink)
Big-Chris Locking Wheelnut Join Date: 31st July 2006 Location: Lincoln Posts: 178 Thanks: 0 Thanked 0 Times in 0 Posts	I've gone with Honda PCP, basically the guaranteed minimum value is set to match the value of the outstanding finance, so that when you return the car you owe nothing. However, it is usual (expected) for the car value to exceed the minimum to leave you with a nice deposit to put on your new car. The third option (I think) allows you to transfer the remaining value to a new car (effectively putting down a deposit) straight onto a new Honda no doubt someone will correct me

25th August 2006, 16:05	#3 (permalink)
richierich Smell My Cheese! Rocketship door handle Join Date: 17th May 2006 Location: Bicester, Oxfordshire Posts: 1,847 Thanks: 0 Thanked 0 Times in 0 Posts	As I understand the PCP thing, the 3rd option does not allow you to put the guaranteed minimum value down as a deposit, but the balance of the actual value less the minimum, which is usually quite a bit lower than its actually value, like the balloon payment, if you sold the car privately you could make more then pay off the outstanding credit and pocket the balance, although I am not sure of PCP allows this. I know the scheme I have my company Civic on does allow this. I have 3 options at the end of 4 years, pay £3500 for the car and keep it, sell the car privately, pay the lease company £3500 and pocket the change or give it back and walk away. I am thinking of buying it, as I think £3500 for a 4yr old car doesn't seem too bad, although it will have the starship miles to go with the look, at least I know who has driven it, and how it was looked after.

25th August 2006, 22:10	#4 (permalink)
Martin Triangular Exhaust Join Date: 18th August 2006 Location: Wales Posts: 226 Thanks: 0 Thanked 0 Times in 0 Posts	The third option allows you to use any equity in the car as a deposit towrds a new one. My business manager tends to under value a car at the end on the term by as much as the clients budget allows, which returns greater equity. E.g. GMFV = £5000 Part ex value = £6000 Your deposit = £1000 every ones a winner, frankie skinner