Pcp, how many have one and why the hate?

[BossFox]

Does this thought add up ?

 

Briefly... it does if the PCP interest is less than the interest you are earning on the cash.

Because if not you may as well have it sitting in the car rather than the bank.

 

This is why despite having the cash, I always take advantage of a 0% deal.

[FUBAR]

Not possible for all and not convenient enough for others, but I like to just save for something then buy it outright. 

[Taylor93]

Not possible for all and not convenient enough for others, but I like to just save for something then buy it outright. 

 

In Hindsight, i think thats probably the best way to do it, and even then dont buy brand new but buy part used

[Damo]

Its all down to circumstances...

 

I wanted a new car, under warranty after my last used car cost me a fortune

 

PCP on a Citigo, worked out cheaper for me than leasing

 

Suits me fine

 

As for saving up and buying one outright, not possible for me in my position with 3 children.

 

Like I said, it suits some and not others

[bilun777]

No, both on 0% .

There was a slightly higher deposit  input when I bought the Greenline ( can't remember exactly.)

My first Yeti was a 170 TDI Elegance from DTD and higher %VAG finance package.

My current Dealer worked hard (and successfully) to get my custom..

My mistake Richard.

I've managed to find the old paperwork and the Greenline was on 7% APR + free servicing.

I was getting confused with my Son's Citigo which was bought the same month on 0% APR + free servicing.

[daveface]

Worked great for me, I used my old C2 Vts as my deposit, it was costing me a fortune in running cost and maintance! Yes I owed it out right but the insurance was 3x the citigos + the tax at £200ish and I was getting low 20mpg :-/ must have been my driving oh and I was getting bored of frozen rear brakes in winter haha

So instead of selling I used it as my deposit £2000-ish which meant I got a Sport for £90pm, I know I might have been better selling and keeping the money but it was more hassle and I doubt I would have got £2k for it! Also just having a kid I wanted a new commuter which was cheap to run! We have an Octavia as our family car which we own :-)

This is the first car I have ever had on any kind of finance, I have had 11 cars in 10 years :-) so this was all new to me! I don't think I would have done it if the 0% wasn't on offer though!

Either way, if I have done right or wrong I'm happy :-)

Edited 27 January, 2014 by daveface

[Damo]

Either way, if I have done right or wrong I'm happy :-)

 

 

Exactly

[BossFox]

Either way, if I have done right or wrong I'm happy :-)

 

0% = No brainer.

[EikokuSanzoku]

The Citigo is the first car I've had from new. Always used to run bangers till they died and scrapped them

 

Last car I had was rather thirsty (£300 pcm), so with a £170 per month over 3 years, £250 deposit paid by the dealer (I think) and £250 by me.... a bit of a no brainer.

 

0%..... 17,500 miles per annum. 3 services free.....

 

Not bothered if I'm just renting. Probably wouldn't want to buy a 3 y.o. Citigo with 52-55k miles on...

[Neo_VR]

Im on PCP - again the 0% was a no brainer for me really, espec with the low deposit.

 

Just about to tick over 2000 miles which means ive already saved almost £300 in fuel over the Octy. plus another £260 in road tax, and another 200-300 for the wheel bearing that needed doing.

 

Not to mention selling the octy basically paid for the first 18 months worth of car payments anyway.

 

Next time round though i will probably look into a personal lease - there are some epic deals available there!

[dinger19]

A PCP can put you into a car you can't really afford 

That's a bold and a opinionated statement is it not. :wonder:

[bouff34]

People can put themselves into cars they can't afford regardless of the finance product in exactly the same way that people buy houses they can't afford... At the end of the day an awful lot of people in this country get themselves into debt they can't afford. Don't think you can blame PCP for this!

Edited 28 January, 2014 by bouff34

[daveface]

I agree finance can put you in a car/house/boat you can't afford that's why you need to do your sums before signing on the line to make sure you can! Just because I don't have 10k up front doesn't mean I can't afford it, it just means I can afford it if the cost is spread! I earn more than enough to afford £90pm but It would take me a very long time to save up £10k! In fact I did have that but it spent it on a more expensive family car!

As you say, it's the same as a mortgage, you do your sums right you can afford it, do them wrong and you will be in a house you can't afford.

You simply need to be carful and ensure you can afford it, so I think what you are saying is right maybe put a little bluntly?

[Markyg]

 Just because I don't have 10k up front doesn't mean I can't afford it, it just means I can afford it if the cost is spread! I earn more than enough to afford £90pm

 

Exactly.

 

I had the cash to buy a car outright but the savings are going towards (another) wedding. If id bought the car with cash after 3 years I'd only have 4.5K of my 10k left and would need to find at least another 6K to buy another one. A no deposit £100 p/m car on my salary is nothing. I spend that much on my Sky/Broadband package  . And my savings arent being eroded.

 

All i can say is there must be some very wealthy people on here......

[bouff34]

Exactly.

 

I had the cash to buy a car outright but the savings are going towards (another) wedding. If id bought the car with cash after 3 years I'd only have 4.5K of my 10k left and would need to find at least another 6K to buy another one. A no deposit £100 p/m car on my salary is nothing. I spend that much on my Sky/Broadband package  . And my savings arent being eroded.

 

All i can say is there must be some very wealthy people on here......

 

But you would have saved £90 x 36 in that time so you'd actually have another £3240 in your savings account on top of the 4.5k....but of course the issue is whether the money would make it to your savings or get spent elsewhere!

[Markyg]

I can see where you are coming from but i class a car as something to pay for out of my disposable income not my savings. Even if i paid cash and banked the payments im still gonna have to find another 2.8K to get a new car whereas in 3 years time i can just get a new one for £90ish pounds a month.

[bouff34]

I can see where you are coming from but i class a car as something to pay for out of my disposable income not my savings. Even if i paid cash and banked the payments im still gonna have to find another 2.8K to get a new car whereas in 3 years time i can just get a new one for £90ish pounds a month.

But if you lose both your legs under the lawnmower.... you can sell the car you own outright to pay for some crutches and maybe an attractive nurse. With PCP you can just hand the car back but no new crutches or nurse!

 

Sorry not really advocating PCP or cash just playing the fool. I went for a 0% HP offer that my dealer had so kind of in between I guess.

[Stonesie]

I would go for PCP if I get a new car, probably a Citigo as the back seats and boot of the Leon get very little use and a 7 mile commute is not brilliant for it's 2.0 diesel engine... Also it's been peeing me off recently with the central locking and climate control both going haywire in all this cold damp weather, so a warranty is looking pretty attractive. 

 

I do have positive equity on it but do not have a stack of cash, if I were to buy a car purely on what I have in the bank it would be a 10+ year old corsa or something

[Stormchaser]

I was put off PCP because I was limited on mileage but would need to pay more for more mileage and a higher % rate than straight finance and then you don't own the car. I wouldn't want that big payment at the end. The finance was terrible too. I got a good px deal on my Octavia so I just paid them the outstanding balance for the Citigo.

Sent from my PID using Tapatalk

[Lady Elanore]

Can I say to one of the earlier posters, that you are not tied to the manufacturer if you take a PCP out, quite the reverse. I posted this bit below in a different thread a couple of days ago, but it seems relevant here.

 

Having sold cars for a living I can say that PCPs on new cars is nearly always a cheaper option than HP. Although the basic figures would tend to show the opposite, most manufacturers give a lump sum to encourage you to take out a PCP and it's often accompanied by a lowish interest rate.  Plus on top of that, the dealer is often given an immediate incentive to sell a PCP. When I sold Nissans for example, we got a £500 bung from the manufacturer for selling a PCP and if you were buying a Primera, then we could offer nearly £2,500 towards your new car. I.e.  you could have £3K off your new cars finance before you even haggle on the price of the car.

 

Hence my current car (MB 350-CDi AMG sport Plus on a PCP) is £350 a month, yet to buy cash would cost over £40K and because much of the £5,500 incentive offered to me to go for the PCP was from the manufacturer I could still haggle hard on the several thousand pounds of profit in the actual car (thus paying almost no deposit). Merc are currently doing a pretty strong deal again on PCPs (around £5K towards the PCP deal on a C class-probably because a new model is coming)

 

The downside is that a competitive monthly payment often means that the final 'balloon' payment is set a tad high and therefore there will not be much, if anything, left in the vehicle to give you a deposit for your next car when you finish your PCP.

 

It is still a good mechanism to buy a car though, as it is essentially a HP agreement and so subject to the same safeguards, ie after you pay off a third of the total cost of the car (including your deposit) then the manufacturer needs a court order to get the car back from you (say you struggle temporarily with the monthly payments) and once you have paid off a half of the total amount due, then you can hand the car back to the manufacture any time you like and walk away. I did this with a Seat Toledo that owed around £6K but was only worth around £4K at the time. I rang up VW finance and said I would like to give the car back a year early as I had paid off over half the total amount due. No probs, a truck appeared a few days later and the car was gone

 

.......and also I posted this

 

 

I sold a Primera to a chap who demanded 0% interest on the Primera I mentioned above. I said we didn't do 0% but with all the incentives we could do the equivalent of better than 0% in a PCP. Ok the final lump has still to be paid, but as the cars he was looking at required a big deposit to qualify for 0%, I pointed out that he could keep that deposit money, put it is a savings account and still have change if he decided to keep the car and make the payment. Thus I always recommend to let the salesman go through the finance options with you. If you have a monthly budget, it is uprising what they can do with the mechanisms they have set in place.

[Didescharlie]

Great post Amanda, thanks for the input.

[Chorlton]

Auric Goldfinger, on 26 Jan 2014 - 11:21, said:

A PCP can put you into a car you can't really afford 

That's a bold and a opinionated statement is it not. :wonder:

 

It might be bold but I don't think it's opinionated.  PCP can indeed put you into a car you can't afford to own outright.  Unless you can afford the final payment you can't really afford to own the car but you can afford to rent it.

[Damo]

Maybe... but at the end, if you still like the car, you could get a smaller loan to pay the final payment

[blueR36]

Don't think it does, you can change midway through a PCP and start another. With any dealer/ Manafacturer

Yes thats right Andy brother in law and sister in law both had Volvos on pcp now both have bmw and change on a whim .Payments stay the same . In effect all you pay for is the depreciation and they both pay less than finance from new

[old newbie2]

Can I say to one of the earlier posters, that you are not tied to the manufacturer if you take a PCP out, quite the reverse. I posted this bit below in a different thread a couple of days ago, but it seems relevant here.

 

Having sold cars for a living I can say that PCPs on new cars is nearly always a cheaper option than HP. Although the basic figures would tend to show the opposite, most manufacturers give a lump sum to encourage you to take out a PCP and it's often accompanied by a lowish interest rate.  Plus on top of that, the dealer is often given an immediate incentive to sell a PCP. When I sold Nissans for example, we got a £500 bung from the manufacturer for selling a PCP and if you were buying a Primera, then we could offer nearly £2,500 towards your new car. I.e.  you could have £3K off your new cars finance before you even haggle on the price of the car.

 

Hence my current car (MB 350-CDi AMG sport Plus on a PCP) is £350 a month, yet to buy cash would cost over £40K and because much of the £5,500 incentive offered to me to go for the PCP was from the manufacturer I could still haggle hard on the several thousand pounds of profit in the actual car (thus paying almost no deposit). Merc are currently doing a pretty strong deal again on PCPs (around £5K towards the PCP deal on a C class-probably because a new model is coming)

 

The downside is that a competitive monthly payment often means that the final 'balloon' payment is set a tad high and therefore there will not be much, if anything, left in the vehicle to give you a deposit for your next car when you finish your PCP.

 

It is still a good mechanism to buy a car though, as it is essentially a HP agreement and so subject to the same safeguards, ie after you pay off a third of the total cost of the car (including your deposit) then the manufacturer needs a court order to get the car back from you (say you struggle temporarily with the monthly payments) and once you have paid off a half of the total amount due, then you can hand the car back to the manufacture any time you like and walk away. I did this with a Seat Toledo that owed around £6K but was only worth around £4K at the time. I rang up VW finance and said I would like to give the car back a year early as I had paid off over half the total amount due. No probs, a truck appeared a few days later and the car was gone

 

.......and also I posted this

 

 

I sold a Primera to a chap who demanded 0% interest on the Primera I mentioned above. I said we didn't do 0% but with all the incentives we could do the equivalent of better than 0% in a PCP. Ok the final lump has still to be paid, but as the cars he was looking at required a big deposit to qualify for 0%, I pointed out that he could keep that deposit money, put it is a savings account and still have change if he decided to keep the car and make the payment. Thus I always recommend to let the salesman go through the finance options with you. If you have a monthly budget, it is uprising what they can do with the mechanisms they have set in place.

Thanks for the above, most informative.

 

What would your advice be to us, as pensioners with an adequate but fixed income, but with "spare" capital?

 

We don't really want any more monthly expenditure than we have now, but we own our properties, goods, chattels, etc. & have enough money in he bank, earning about 2.4% net interest, to purchase a £25k car outright.

 

Should we consider a PCP deal, finacne agreement or a personal loan only if the interest rates offered are lower than the return we are getting from the bank?  

 

 

TIA, DC