Cost to Change - £'s

[David.]

It's 7 years since I last purchased a new/used RT. From the experience of owning a 2007 and 2010 RT then changing them after 3 or 4 years, the cost to change was around £6K to £7K. My budget was £165 per month, just less than £2K per year. Both bikes had around 36K to 38K miles on the clock.

Is this monthly budget still typical of a PCP deal or changing the bike say after the 3 year manufacturers warranty is up.

[Levisp]

There used to be a useful PCP calculator on the BMW website but I'm buggered if I can find it. If you have a good bike and from the pictures and what I have read you do, then I would stick with it. The new 1250 are nearly £20K and I cannot say I'm impressed with that. BMW are getting expensive and they are certainly not problem free. I don't have PCP bought my bike ages ago and have no intentions of changing it. In fact I have just bought a KTM 890 Adventure for a bit of fun. However back to your question I would imagine on a new bike your PCP payments would be something more like £200-250 pm. Of cause it all depends on amount of deposit, milage and length of term. If you want a definite answer then ask your dealer.

[David.]

I'm not looking for a new bike myself, was just interested to know how much it typically costs to change after say 3 years or have a PCP deal.

[Levisp]

PCP is a very clever product for the dealer and an enticing one for the customer. The average PCP customer replaces his bike every 3 years. He pays lower than normal HP payments has a new bike every three years and always in warranty. So what's not to like ? The cost longterm. The last time I looked at the cost over a 12 year period it came out as between 2 - 2 1/2 times more expensive than buying outright and keeping. This is one reason that I'm not bothered about warranty. The money I save by buying one bike and keeping will pay for any work that maybe required and still be better off.


Example.


Customer A Buys new bike for £20k keeps for 12 years and sells for £4k Cost to him is £16k or £1333.33 per year.


Customer B PCP has 4 new bikes and after 12 years hands the last one back to dealer. Cost £250 pm. Cost to him £36k or £3000 per year.


These are just very rough figures but you get the idea. There is more to it than that because each time B replaces his bike there is probably a deposit to pay as well.  Also you are kind of forced to have main dealer servicing where as A after warranty period can do what he likes.


For me the only time PCP really makes sense is if it was going to be my very last bike then splash out let dealer do the servicing and hand it back after the loan period. Rang boots up.

[David.]

I'm in the "buying outright and keeping" category, IMO, it's the most economical way to own a vehicle.

As I'm not splashing out circa £2K to £3K per year to change, paying £245 for 7 months warranty is not a big deal.

Yes, there is some minimal bespoke dealer or independent servicing required but not at £130 per hour for BMW dealer labour!

[David.]

Out of interest, typically, how much does it cost to change to a new bike over what period of time.

I haven't purchased a new to me (used) bike since 2014 but have saved a lot by not doing so.

[michaelc2710]

Out of interest, typically, how much does it cost to change to a new bike over what period of time.


[size=2px]It depends on what they value your current bike at and the specification of the new bike you go for.[/size]
There are some good deals to be had with low mileage 2020/2021 bike being swapped in for the latest models/registrations.
I haven't purchased a new to me (used) bike since 2014 but have saved a lot by not doing so.

I haven't purchased a small island with a private airstrip to stay weekends at, or built the mansion on the island.......but I've saved a lot by not doing so. 

[David.]

In 2014, my cost to change from a 2010 to a used 2012 SE model with 3,000 miles on the clock was £3K.

[Graham88]

PCP is a very clever product for the dealer and an enticing one for the customer. The average PCP customer replaces his bike every 3 years. He pays lower than normal HP payments has a new bike every three years and always in warranty. So what's not to like ? The cost longterm. The last time I looked at the cost over a 12 year period it came out as between 2 - 2 1/2 times more expensive than buying outright and keeping. This is one reason that I'm not bothered about warranty. The money I save by buying one bike and keeping will pay for any work that maybe required and still be better off.


Example.


Customer A Buys new bike for £20k keeps for 12 years and sells for £4k Cost to him is £16k or £1333.33 per year.


Customer B PCP has 4 new bikes and after 12 years hands the last one back to dealer. Cost £250 pm. Cost to him £36k or £3000 per year.


These are just very rough figures but you get the idea. There is more to it than that because each time B replaces his bike there is probably a deposit to pay as well.  Also you are kind of forced to have main dealer servicing where as A after warranty period can do what he likes.


For me the only time PCP really makes sense is if it was going to be my very last bike then splash out let dealer do the servicing and hand it back after the loan period. Rang boots up.

I have never been a fan of finance and in recent years have been fortunate enough to just buy my cars and bikes, I am however coming round to the PCP way of thinking.

Your two examples are not really compatible, as it relies on having 20 grand in the bank for one. For a truly fair comparison person A should be using HP.
While financing any depreciating asset will always cost more than just buying it, the difference in your fag packet calculations still only equates to 8.5% interest which in terms of vehicle finance is quite competetive.

It is also worth pointing out that the dealer gives you a guaranteed future value, based on expert opinion. None of those experts predicted the semiconductor shortage and subsequent rise in value of second hand vehicles - leaving many PCP customers with an asset that is more valuable than the guaranteed future value and free to pay the balloon payment and sell the vehicle privatley, reducing that 8.5% even further.
Of course, could go the other way.. 12 years on person A could find his asset worth scrap value only where as person B knows exactly what their asset will be worth at the end of the term as it is 'guranteed' by the finance contract.