I find pcp deals are generally only good if you do a low mileage. Most of the deals advertised are usually based on 10k miles per annum or less. I generally do over 20k a year. Monthly payments rocket when you start increasing the mileage.

True, but there again your car depreciates faster as mileage goes up. It doesn't matter which way you buy your car :(

 

Don't get me wrong, PCPs aren't always the best way to buy a car, but you would be slightly foolish if you are buying a new car and don[t explore PCPs fully.

I drive a 56 plate 1.9 diesel Octavia Elegance with 85k on the clock. I love cars, I really do and would love nothing more than to drive around in something like a Jaguar XF or Audi S4.

Through my employer, I have the opportunity to drive a brand new BMW 318d Touring with full leather and all the whistles and bells on a lease deal for £318.00 a month. So why don't I?

Well, my car is used mainly to commute to and from work (100 miles per day) & to take me to mountain ranges around the UK where I indulge in my passions of walking, climbing & mountain biking. I used to cycle to work, but Mr Cameron and his austerity measures saw to that and moved my base fifty miles away from where I live.

My Octavia fulfills my needs in all aspects and costs me next to nothing to run. I'm lucky as i don't have a car loan. It's comfortable for the journey I do & I would resent spending vast amounts of money on a car which essentially is used to get me to & from work & then have to give it back at a loss to me. Public transport is not an option as my workplace is too far off the beaten track.

So, that's me. I most certainly wouldn't criticise anyone for spending money on a car. I've been there & done that. But for now my Octavia suits my needs & my pocket.

I retire in four years time. And oh boy, do I intend to enjoy my motoring.........in a Caterham 7 if I get my own way!

Edited 17 March, 201412 yr by flying pig

That's not a lot of car for £318 :( I have a 350CDi AMG Sport Plus for £350 a month. Not cheap, but a lot of car for the money.

Yours sounds like a good deal & as you say, a lot of car for the money. I take it yours is a business deal? This is a private lease deal & the very reason I haven't succumbed to it!

FP.

Edited 17 March, 201412 yr by flying pig

That's not a lot of car for £318 :( I have a 350CDi AMG Sport Plus for £350 a month. Not cheap, but a lot of car for the money.

I looked at one of those through the business. All good till they find out its 35+ k miles per year. Then the price nearly trebles....

Think I just have to stick to buying privately. Don't mind an older model which can be got for under 10k

Yours sounds like a good deal & as you say, a lot of car for the money. I take it yours is a business deal? This is a private lease deal & the very reason I haven't succumbed to it!

FP.

No mine is a private deal. I claim mileage off my company

I looked at one of those through the business. All good till they find out its 35+ k miles per year. Then the price nearly trebles....

Think I just have to stick to buying privately. Don't mind an older model which can be got for under 10k

A 3 year old car with over 100K on it's clock is never going to worth much compared to the new price. As you say (assuming you pay the bills) it makes more sense to buy something cheaper and probably second hand-at least until your mileage comes down.

True, but there again your car depreciates faster as mileage goes up. It doesn't matter which way you buy your car :(

Don't get me wrong, PCPs aren't always the best way to buy a car, but you would be slightly foolish if you are buying a new car and don[t explore PCPs fully.

Yes it does depreciate the more mileage but disagree with the statement that it doesn't matter how you buy a car. Pcp are greatfif you intend trading in for a new car at the end of the term. If not you have nice big lump sum you need to pay or refinance. Personally I like to pay for a car and then own it rather than continually renting/leasing one. The past two occasions I've got a better deal taking a personal loan than through a pcp. With a pcp salesman just manipulate it to get whatever monthly payment you want. Same reason I have a mortgage and don't rent a house. I saw what looked like a great deal on a bmw m135i but when I read the small print there was a quite a large deposit followed by the monthly payments, then a large sum at the end if god forbid you actually wanted to own it. Oh and you could only do 8k miles per year!

Yes it does depreciate the more mileage but disagree with the statement that it doesn't matter how you buy a car. Pcp are greatfif you intend trading in for a new car at the end of the term. If not you have nice big lump sum you need to pay or refinance. Personally I like to pay for a car and then own it rather than continually renting/leasing one. The past two occasions I've got a better deal taking a personal loan than through a pcp. With a pcp salesman just manipulate it to get whatever monthly payment you want. Same reason I have a mortgage and don't rent a house. I saw what looked like a great deal on a bmw m135i but when I read the small print there was a quite a large deposit followed by the monthly payments, then a large sum at the end if god forbid you actually wanted to own it. Oh and you could only do 8k miles per year!

I think you might have missed my point. When I say "it doesn't matter" I refer to the fact you lose money, especially with high mileage, not that any deal stops that happening (remember that a PCP protects you from negative equity, unlike other forms of loan).

 

But also there is a misunderstanding about PCPs. What I repeatedly say to peeps, is have a look at the PCP option. It is not always the best way to buy a car. BUT it can often be the cheapest. You have to forget about the lump at the end thing and look at the whole structure of the deal. You buy a car on HP, fine that's a good way to buy a car sometimes. But a PCP is an HP deal (check the small print). What I try to tell people is to see if there is an incentive to take the PCP.

 

Lets assume there is. So you pay a small amount for your deposit and then you make a monthly payment. At the end of the agreement you have loads of different options. But one thing to note is as long as you are within your mileage limit, is you should NOT be in negative equity.

 

or

 

OK, so you buy a car on 5 years HP (payments are broadly similar to a 3 year PCP). Your monthly payments are higher and after, say 3 years, you might want to change. So does your car have any equity in it? who knows the future, it might or might not have. But you still owe 2 years of payments, a big lump, very similar to the PCP way of doing things. Reverse that scenario and you could say after 3 years of PCP I will take out an H/P/loan to cover the lump at the end.  

 

 

My point is, often a PCP has an incentive that will offset some, if not all of the interest payments whilst the loan is on-going. Yes you have the lump at the end, but this is still smaller than the usual 'pay 50% up front and get the remaining 50% interest free' that many dealers do. If you realise that often you save money on having the PCP up until you hit the final lump, you can still take out a loan to cover that at your preferred Bank/Dealer and your interest rate will be what ever it is you can negotiate.

 

If I want to buy my current car at the end of it's 3 years PCP, it will be cheaper than if I had paid cash and haggled hard when I first bought it. I actually haggled hard on the cost of the car anyway and also received a very big incentive to take the PCP out. The PCP incentive alone saved me more than all the interest put together. So add that to the savings I made with my hard haggle, I got the car cheaper than cash ever could, or even HP ever could.

  It wasn't something I thought of doing when I got my current car, but I like it so much that I might keep it. I am happy that I might have bought the car with a massive saving on the new price and then paid a surprisingly small amount in the 3 years of PCP ownership

 

Dealers want you to take finance and they usually get incentives for you to take out theirs. PCPs often attract the best incentives for you and the dealer. You don't have to believe me, but to dismiss this process out of hand makes you a person with a bit more money to throw away, than most. 

 

Don't forget, your mortgage is subject to you making the minimum payments, otherwise the Banks will take your house off you. Although like you, I prefer to have a mortgage than rent 

 

A private loan from a Bank is not tied to the car, but you will have to pay it back somehow and they can seize your car using the courts. However, an HP agreement gives you the protection of the law of halves and thirds. If you have trouble with the payments, after you have paid a third of the car off, the Finance company needs a court order to reposes the car. After you have paid off a half, you can dump the car back onto the Finance company if you are say, in negative equity.

 

Finally, the M135i you mention. If it's like the deals I have been looking at for PCPs on it, then these are examples and are adjustable. If they are not with BMW ie from a Broker, then you may well not get an incentive to take out the PCP, only BMW will give the big incentives as they come from the manufacturer themselves. Having said that, there probably wont be much on a M135i as they can sell them easily and it's a bit of a Halo car for BMW. I'm keeping my eyes peeled on that one though, as they are lovely cars.

I am going for a lie down now