Buying a new car on pcp con or not.

[Bobbins]

Originally Posted by myaquarium

I was amazed that her apr part of payments also included the interest costs of the £11500 over the 4 years even tho that figure isn’t included in the repayment.
It meant her apr of 3.9% had he paying an additional £21 per month or roughly £1000 over The 4 years with no financial benefits only loss.
I asked if she refinanced the £11500 after 4 years will it be interest free as she has already paid the interest. Obviously they said no she would have to pay the interest again. I think it’s a con aimed at people unable to get a loan for the full amount and this is not explained by the car dealerships.

See more...

The biggest issue with PCP is that a lot of people don’t understand what they’ve getting into.

You’re borrowing the £11500 for 4 years and making no capital re-payments on that part - why would you think they’d lend it to you interest free? And interest isn’t a one-off thing, you pay it for all the time you have money borrowed so of course you’ll pay more if you want to keep the car.

PCP is still a loan for the full amount (that’s why you pay interest on the full amount) so there’s no ‘con’ vs HP.

[myaquarium]

Originally Posted by Bobbins

The biggest issue with PCP is that a lot of people don’t understand what they’ve getting into.

You’re borrowing the £11500 for 4 years and making no capital re-payments on that part - why would you think they’d lend it to you interest free? And interest isn’t a one-off thing, you pay it for all the time you have money borrowed so of course you’ll pay more if you want to keep the car.

PCP is still a loan for the full amount (that’s why you pay interest on the full amount) so there’s no ‘con’ vs HP.

See more...

Yes your right. Just seems a bit rich that I’m paying the interest for the dealership who know they will either receive the full amount after 4 years or a car which will be sold at the price or probably over the bubble payment value. Win win for the dealer.

[megaflyer]

Originally Posted by myaquarium

Yes your right. Just seems a bit rich that I’m paying the interest for the dealership who know they will either receive the full amount after 4 years or a car which will be sold at the price or probably over the bubble payment value. Win win for the dealer.

See more...

Yeah reading this thread and at 2% its crazy expensive - I am better off taking money out of my savings account, buying the car and trading it in when I want a new one in around a years time - I am not one for lining other peoples pockets needlessly . If it was a more reasonable 1% then maybe but no ever more than I earn in savings - makes no financial sense to me

[EssexSue]

Originally Posted by megaflyer

Yeah reading this thread and at 2% its crazy expensive - I am better off taking money out of my savings account, buying the car and trading it in when I want a new one in around a years time - I am not one for living other peoples pockets needlessly . If it was a more reasonable 1% then maybe but no ever more than I earn in savings - makes no financial sense to me

See more...

I'm glad you said that, I thought I was missing something.

[pompeyboy]

Originally Posted by megaflyer

Yeah reading this thread and at 2% its crazy expensive - I am better off taking money out of my savings account, buying the car and trading it in when I want a new one in around a years time - I am not one for lining other peoples pockets needlessly . If it was a more reasonable 1% then maybe but no ever more than I earn in savings - makes no financial sense to me

See more...

Trading it after a year might cost you more than you save in interest payments as you will take a big hit on depreciation.

I'm an old fashioned buy it outright type but have been looking into the various long term "hire" schemes that are available but find the mileage I need, 15,000+ pa make them not so attractive.

[neilhd]

I'm a PCP fan.

My last 3 cars have all been PCP. I've decided I have no desire to actually own a depreciating asset that will start costing me money in maintenance the older it gets, plus I like having a nice brand-new car every 3 years or so. I've always traded in a few months early, usually with a small deposit towards the next one, or at least break-even.

My DWs car we sold via WeBuyAnyCar about 6 months before it was due to go back as we didn't need 2 cars any more. Banked about £2000 profit once the finance was settled.

So it works for me, might not for everyone.

[sam7]

DH has had a car on PCP for the last 15 years, he is on his 7th one (we think), it suits him. He does a job that involves a lot of driving and needs a reliable car.

[YorkshireT]

Originally Posted by megaflyer

Yeah reading this thread and at 2% its crazy expensive - I am better off taking money out of my savings account, buying the car and trading it in when I want a new one in around a years time - I am not one for lining other peoples pockets needlessly . If it was a more reasonable 1% then maybe but no ever more than I earn in savings - makes no financial sense to me

See more...

Can make a lot of sense. If it depreciates lease it as they say and PCP is really a quasi lease with option to buy.
For example, if you get to the end and the car is worth more than the GFV then you can pocket the difference if you sell it or trade in. Worth less and the bank takes the depreciation hit.
Leasing or PCP is the way to go IMO If getting a new car every few years as you can also get the advantage of huge discounts that the leasing company (often tied to the manufacturer) gets from the manufacturer.
So some amazing deals I have had in the past 10 years included a Merc CLS Shooting Brake for about £350 a month with £1000 down over two years (that’s a 60k car and it cost me £4000 a year- depreciation would have dwarfed that) and a BMW 335Xdrive for under 400.
The Merc by accident they sent me the purchase invoice and the lease Co (Merc finance) had a £19000 discount on it- which you or I couldn’t have got in the dealer.
Try sites like Nationwide Vehicle Contracts. Leasing works best if you can be a little bit flexible in vehicle type and jump on a good deal when the manufacturer wants to offload some cars.
PCP though can be sometimes cheaper so compare both. As above my Tesla on a PCP was significantly cheaper than a lease.

[YorkshireT]

For anyone wanting electric Nationwide currently have a Kia E Niro (v good car) for 3 years, 10k pa, £1000 down and £335 a month. To say you’ll pay no petrol or tax or congestion charge or hardly anything for service, that’s a great deal for anyone wanting to get on the electric bandwagon!

[YorkshireT]

Megaflyer this may be your type of car not sure, Merc A200 AMG Auto, £892 down, 297 a month but over 3 years 5k miles a year (£327 at 10k a year). That’s over 3 years but costs £3900 a year. It’s 28k to buy that car so you’d lose more in depreciation over 3 years. Just an example.