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  • FIRST POST
    • Merlincat
    • By Merlincat 16th Jul 17, 6:26 PM
    • 2Posts
    • 0Thanks
    Merlincat
    Car bought on PCP
    • #1
    • 16th Jul 17, 6:26 PM
    Car bought on PCP 16th Jul 17 at 6:26 PM
    Hello

    I would appreciate any advice. I have a small car I bought new using PCP. I pay quite a low amount of £150 per month and am halfway through the 4 year term of the agreement. At the end of the agreement, I either have to pay the balloon payment of £4333 and the car is mine, or return the car and owe nothing or use the car and what I've paid towards a new car. I had the same deal with my last car which after 3 years, I changed to my current car.

    The question is, I am starting to plan for the future and would like to be mortgage free within the next 10 years as I am 50 and need to start planning for retirement etc. I feel I need to sort out the car finance so it is not hanging over me. I need the car for work (driving around making home visits is my job) so I cannot be without one. If I save hard and pay off the £4333 at the end of the term, it will be mine. However, then my car will be older and will need more maintenance and money spent on it. Or do I keep getting a new car every 3-4 years. My payments have actually dropped between the first car and second car, which is a good thing.

    Any advice I would appreciate. Thanks
Page 1
    • tacpot12
    • By tacpot12 16th Jul 17, 6:42 PM
    • 576 Posts
    • 505 Thanks
    tacpot12
    • #2
    • 16th Jul 17, 6:42 PM
    • #2
    • 16th Jul 17, 6:42 PM
    If your car suit you and you feel that that maintenance costs are going to be reasonable, I would pay the balloon payment and keep the car.
    • motorguy
    • By motorguy 16th Jul 17, 7:19 PM
    • 15,110 Posts
    • 8,539 Thanks
    motorguy
    • #3
    • 16th Jul 17, 7:19 PM
    • #3
    • 16th Jul 17, 7:19 PM
    If your car suit you and you feel that that maintenance costs are going to be reasonable, I would pay the balloon payment and keep the car.
    Originally posted by tacpot12
    +1

    Pretty much the secret to longevity of modern cars is good maintenance and keeping it well serviced.

    I'm planning on doing similar with my 2016 Passat - its 2016 and i've taken it out on a personal loan rather than PCPing a new one.

    I'll keep it well serviced and maintained and run on at it as long as i can.
    You are not special. You are not a beautiful and unique snowflake.
    • Ectophile
    • By Ectophile 16th Jul 17, 9:11 PM
    • 2,630 Posts
    • 1,591 Thanks
    Ectophile
    • #4
    • 16th Jul 17, 9:11 PM
    • #4
    • 16th Jul 17, 9:11 PM
    Until the car is totally clapped out, the money you'll spend maintaining it will be considerably less than your PCP costs.

    An older car may need new suspension, steering or braking bits to get it through the MOT every year. But this rarely goes over a few hundred pounds.

    I wouldn't expect to get many serious bills for at least 100 000 miles or 10 years.
    If it sticks, force it.
    If it breaks, well it wasn't working right anyway.
    • Nagme
    • By Nagme 16th Jul 17, 9:34 PM
    • 312 Posts
    • 476 Thanks
    Nagme
    • #5
    • 16th Jul 17, 9:34 PM
    • #5
    • 16th Jul 17, 9:34 PM
    We're on a pcp too, ours runs out March and the balloon is £9k. We've looked on auto trader and the best car we can get for £9k is... ours. So if we can afford to, we'll pay the balloon payment. One owner from new, well maintained, know all the history. I'd say if it's a good car, keep onto it.
    July 2017 £20,864.
    • HHarry
    • By HHarry 16th Jul 17, 9:47 PM
    • 396 Posts
    • 264 Thanks
    HHarry
    • #6
    • 16th Jul 17, 9:47 PM
    • #6
    • 16th Jul 17, 9:47 PM
    Don't get to worried about the amount of maintenance an older car needs - it certainly won't be £150 a month.

    I have a 13 year old Berlingo van with 103k miles. Last year (and the year before) it cost me £200 to get it through the MOT. This year it went straight through. There are usually some other bits to do throughout the year, and the occasional big bill for a clutch, but it really doesn't cost much to run.

    If you've had from new and looked after it, then keep it.
    • Merlincat
    • By Merlincat 16th Jul 17, 10:13 PM
    • 2 Posts
    • 0 Thanks
    Merlincat
    • #7
    • 16th Jul 17, 10:13 PM
    • #7
    • 16th Jul 17, 10:13 PM
    Thank you all for your replies. As a result, I have set up an online savings account to start saving towards paying off the balloon payment in 2 years. As you say, 1 owner from new, full service history and I know the history. That counts for a lot in this day and age. Many thanks again.
    • cjdavies
    • By cjdavies 17th Jul 17, 12:00 AM
    • 2,400 Posts
    • 2,263 Thanks
    cjdavies
    • #8
    • 17th Jul 17, 12:00 AM
    • #8
    • 17th Jul 17, 12:00 AM
    I had my old car for 12 years, no major maintenance needed.
    • Rainbowgirl84
    • By Rainbowgirl84 17th Jul 17, 12:31 AM
    • 473 Posts
    • 816 Thanks
    Rainbowgirl84
    • #9
    • 17th Jul 17, 12:31 AM
    • #9
    • 17th Jul 17, 12:31 AM
    My twelve year old Astra is averaging ~£150 to get through it's MOT over the last four years or so. Doesn't make financial sense to get rid of it and buy newer.
    • Tarambor
    • By Tarambor 18th Jul 17, 4:59 PM
    • 907 Posts
    • 613 Thanks
    Tarambor
    However, then my car will be older and will need more maintenance and money spent on it. Or do I keep getting a new car every 3-4 years. My payments have actually dropped between the first car and second car, which is a good thing.

    Any advice I would appreciate. Thanks
    Originally posted by Merlincat
    What are you basing the "it'll older so will need more maintenance and money spent on it" on? My Mondeo I bought at 2 years old. Its now 7 years old at 122,000 miles and other than servicing all it has had is two suspension bushes. And that is a car that has the amount of mileage on that you'd expect of a 10 year old vehicle.

    Getting a new car every 3-4 years you're setting fire to your money. Whatever the new price is you'll be financing the first few years depreciation and that can be as much as 60% of the list price. Going back to my Mondeo I bought it at 2 years old for 30% of its new price saving almost £16,000. And that will be money YOU will be paying out as monthly payments in perpetuity if you go down the "get new, renew every 3-4 years" route.

    With FIRE (Financial Independence, Retire Early) the aim is to minimise your outgoings. If you're spending £1800 a year on finance that will be far far more expensive an amount than you will spend on repairing your car in any one year and in fact £1800 is a good 2-3 times more than you can buy a reliable banger for.

    There is NEVER EVER a time where keeping the car you have and fixing it will be more expensive than buying a new car just on the depreciation hit of year 1 and 2, let alone the interest on any finance you use. And that includes if you have to do a major repair on your older car such as a replacement engine or gearbox. Actually I lie, there is one time where you would be better off buying a new car and that is if you're lucky enough to get a car which is in so much demand with such a long waiting list that you can sell it after a year for more than you bought it for, such as the new Ford Mustang V8. However if you're not buying something exotic or prestige the chances of that are between nil and nothing.
    Last edited by Tarambor; 18-07-2017 at 5:02 PM.
    • Money saving maniac
    • By Money saving maniac 18th Jul 17, 11:50 PM
    • 353 Posts
    • 660 Thanks
    Money saving maniac
    My twelve year old Astra is averaging ~£150 to get through it's MOT over the last four years or so. Doesn't make financial sense to get rid of it and buy newer.
    Originally posted by Rainbowgirl84
    My 18 year old car the same

    Also just bought a 1 year old car on PCP, damn sight cheaper than a new one, I'll be paying the balloon off and keeping it. Only bcoz our previous car was just written off in an accident at 7 years old. Otherwise we wouldn't have had a newer one.
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