Black Horse To Launch Pcp For Caravans

[kilham5]

Just read Black Horse are to introduce full PCP for Caravan and Motorhome purchase.

 

The pricing will be interesting, but given the lack of confidence in the integrity of UK built caravans will give a lot of buyers confidence and manage their costs, knowing they can hand back a duff one at the end of the term without worrying about PX values.

[pagan8c]

Since the majority of cars are bought this way now apparently then it follows that caravans will be next. Is it available on motor homes as well.

[karlak]

http://www. blackhorse. co. uk/Caravan/PersonalContractPurchase. html

[screenman]

You would be suprised how many people try to get out of these deals only a few months after signing up, we see it often around the garages I work for.

[OWOMW]

I thought for a moment you were referring to Black Horse Farm.

[sprite]

Sounds very interesting. ...I bought mine new in 2014 using Black Horse finance so I will look into this should I feel like changing the van in the next few years.

[Guest]

You would be suprised how many people try to get out of these deals only a few months after signing up, we see it often around the garages I work for.

 

Can you give an example as to why they would want to get out of the agreement?

[Steamdrivenandy]

Back in 2000 I worked for Black Horse Vehicle Management, the part of Lloyd's TSB that administered their Contract Hire business. A bit different from PCP but we would get plenty of people wanting to get out of their agreements. The problem was that it was v expensive to do so. Monthly payments spread the whole cost over 36 months or so but I initial depreciation is steep. So we'd have to get a book value for the car and then work out the interest over the period that the car had been on contract. Once that was calculated we took away the payments already made and arrived at a settlement figure. Invariably it was a lot more than the customer was expecting.

 

I had a physio who'd just been appointed at QPR (I'm a lifelong supporter) and taken out a contract on a Saab. Within days QPR made him redundant because they hit financial trouble. He was in tears as he just couldn't make the payments and the settlement was hefty four figures.

 

Than there was Mr Hakimoto who was seconded over here by Honda and got homesick. He left his Civic in a car park at Heathrow and grabbed a plane to Tokyo. He couldn't remember where he'd left the car and had thrown away the ticket.

 

At one time BH did a deal for bookmakers for Bentley's, trouble was one bookie refused to hand the car back at the end of an extended contract. In the end the collection agents had to get the car with a police escort.

 

Happy days

[Guest]

Back in 2000 I worked for Black Horse Vehicle Management, the part of Lloyd's TSB that administered their Contract Hire business. A bit different from PCP but we would get plenty of people wanting to get out of their agreements. The problem was that it was v expensive to do so. Monthly payments spread the whole cost over 36 months or so but I initial depreciation is steep. So we'd have to get a book value for the car and then work out the interest over the period that the car had been on contract. Once that was calculated we took away the payments already made and arrived at a settlement figure. Invariably it was a lot more than the customer was expecting.

I had a physio who'd just been appointed at QPR (I'm a lifelong supporter) and taken out a contract on a Saab. Within days QPR made him redundant because they hit financial trouble. He was in tears as he just couldn't make the payments and the settlement was hefty four figures.

Than there was Mr Hakimoto who was seconded over here by Honda and got homesick. He left his Civic in a car park at Heathrow and grabbed a plane to Tokyo. He couldn't remember where he'd left the car and had thrown away the ticket.

At one time BH did a deal for bookmakers for Bentley's, trouble was one bookie refused to hand the car back at the end of an extended contract. In the end the collection agents had to get the car with a police escort.

Happy days

As you know, Contract Hire is a completely different product to PCP so it is unfair to try to draw comparisons.

[screenman]

 

Can you give an example as to why they would want to get out of the agreement?

 

Yes, they realise after signing up that the monthly repayment is not as affordable as they thought, or the vehicle does not continue to give the prolonged happy feeling they hoped it would. Or of course another one far more important to some their mate has got a better one.

[pagan8c]

I was looking at some of the differences in costs between finance and PCP and there is not a lot in it as regards money. Plus when looking at discounts available there was a considerable difference in the discount given between cash buying and finance being that finance price was cheaper. I understand cash is the best way but if you want or need a new car and you haven't got all the cash then it works out quite well especially with the dealer incentives etc.

[Les Medes]

I thought for a moment you were referring to Black Horse Farm.

and me

[Guest]

Yes, they realise after signing up that the monthly repayment is not as affordable as they thought, or the vehicle does not continue to give the prolonged happy feeling they hoped it would. Or of course another one far more important to some their mate has got a better one.

 

That seems very odd as all dealerships (car, caravan and motrcycle) have to comply with the FCA regulations regarding "Treating Customers Fairly", before the the customer signs the agreement they are asked a series of questions some of which are specifically about affordability, can they meet the payment now and in the future, do they know of any changes to their circumstances that could affect their ability to meet the payments now or in the future.

 

If the customer has answered these questions honestly then they would not be complaining and trying to get out of the agreement, on the other hand if they have lied about this then they don't have a leg to stand on as the dealer has either electonic or hard copy evidence that the questions were asked.

 

Comparing the same cash price and same deposit, the payment on a 4 year HP is about the same as a 3 year PCP deal.

 

So it wouldn't have mattered if they had taken a HP deal or a PCP they couldn't have afforded the payment on any of them, so it is not specific to PCP.

 

If the vehicle stops giving them the happy feeling that is irrelavant to how they paid for it.

[jetA1]

 

 

Comparing the same cash price and same deposit, the payment on a 4 year HP is about the same as a 3 year PCP deal.

 

So it wouldn't have mattered if they had taken a HP deal or a PCP they couldn't have afforded the payment on any of them, so it is not specific to PCP.

 

If the vehicle stops giving them the happy feeling that is irrelavant to how they paid for it.

 

I think you're by focusing on the the calculations you are slightly missing the point. The point of PCP appears to be to provide the consumer with the biggest bang for the least buck, this allows the sale of new vehicles to play very much on the emotions or the buyer, "look what you can have . .. all this and for only this much" and some people get drawn into buying decisions on an emotional high where common sense and reality are firmly consigned to the back seat.

 

At the time of the deal the numbers do 'honestly' stack up but after the event people's circumstances or priorities can change, or it could be something like keeping up with a neighbour in terms of model or registration plate. This might not make sense to you but there are lot of different people in the world all with different mindsets and values.

 

In terms of PCP on caravans what would concern me is how the future guaranteed minimum value is calculated, in particular how ongoing warranty claims or other defects would be dealt with. The warranty position with cars is generally very good these days with warranty claims easily dealt with by any franchised dealer for the brand. That does not appear to be the case with caravans so how would an outstanding warranty matter, or finding damp effect the GFMV?

Edited August 17, 2016 by jetA1

[IainM1970]

Not new, one dealer was offering a PCP three or four years ago. Spoke to my own dealer at the time who looked into it, but didn't go for it for reasons I can't now recall!

 

Although we have had several cars on PCP I have always managed to pay for my caravans in cash and feel happier doing so, don't know why though, just a gut feeling.

[Paul_B]

I remember when Derik Cook (DC Cook) started to sell Datsun's in a similar way, they said that wouldn't catch on.

[Steamdrivenandy]

When we were shopping for Mrs SDA's Twingo earlier this year I visited the local Renault dealership half a dozen times. On at least half the visits one of the salesmen was in an obviously 'difficult' conversation with a customer where they were seeking to get out of a deal, or reduce its cost. Several appeared to want to swap from the car they'd just taken on PCP and drop down to a lower prices car to reduce the monthly payment. The salesmen were having to explain that high initial depreciation made that almost impossible.

[CommanderDave]

When you hand back the item they expect it to still be in a new condition I have found . I have found this on vehicles.

 

 

Read the terms and the wear and tear conditions .

 

 

Dave

[Guest]

When you hand back the item they expect it to still be in a new condition I have found . I have found this on vehicles.

 

 

Read the terms and the wear and tear conditions .

 

 

Dave

 

For PCP and Contract Hire returns the finance company uses a published BVRLA guide for fair wear and tear

[joanie]

It would be interesting to see how they work out the guaranteed future value . When P/X a caravan a few years ago we were given a good P/X price, I know that we always look at the final figure, but in the contract it said that if our caravan was sold before the new one was available and we changed our minds, we would only get £xxxx back. which was £4000 difference. Other places have different rules.

[CommanderDave]

For PCP and Contract Hire returns the finance company uses a published BVRLA guide for fair wear and tear

 

 

They have a link if you go to their caravan condition guide.

 

 

Dave

[Fenester]

If manufactures have to underwrite the residual values to support their dealers for PCP then perhaps they may start to focus on manufacturing vans that don't leak or rot.

[Guest]

It would be interesting to see how they work out the guaranteed future value . When P/X a caravan a few years ago we were given a good P/X price, I know that we always look at the final figure, but in the contract it said that if our caravan was sold before the new one was available and we changed our minds, we would only get £xxxx back. which was £4000 difference. Other places have different rules.

 

The GMFV is set at the start of the agreement and is guaranteed by the finance company.

 

At the end of the agreement you have 3 clear options:-

 

If you want to keep the caravan you pay the GMFV and its yours.

 

If the PX value is greater that the GMFV you can let the dealer take the caravan off your hands, they will settle the GMFV on your behalf and carry any remaining equity over on to a new caravan deal

 

If the caravans worth is equal to or less than the GMFV for whatever reason you simply hand the caravan back (subject to it meeting the Fair Wear and Tear conditions) and walk away.

 

With regards to Fair Wear and Tear damp is not acceptable but if the caravan is service according to the manufacturers requirements then it shouldn't be an issue.

 

In your case with regards to the PX value, that is a local T&C between you and the dealer, the GMFV once agreed cannot be altered as if forms part of your PCP agreement.

[Fenester]

Finance companies don't always take the residual value risk they often take buyback guarantees from dealers and manufactures, hence my comment on this hopefully driving financial incentive for good build quality. If the caravan industry becomes dominated by PCP the side effects will be highly beneficial.

Edited August 17, 2016 by Fenester

[Guest]

Finance companies don't always take the residual value risk they often take buyback guarantees from dealers and manufactures, hence my comment on this hopefully driving financial incentive for good build quality. If the caravan industry becomes dominated by PCP the side effects will be highly beneficial.

 

GMFV is a guarantee, which in actual fact has been baked into the CCA for years.

 

Your rights of termination are that if you have paid half of the total amount payable under the terms of your HP finance agreement you can hand the vehicle back and walk away.

 

The PCP agreement is structured to ensure that at the end of the agreement you have paid over half the total amount payable so can exercise that option.