PCP - would it be a huge mistake?

mad_rich

Buying a new car is expensive, and rarely a good idea if you're not flush with cash, however you juggle the finances.

Changing cars is expensive too, particularly if part-exing your old car.

Seems like two good reasons to stick with your current car to me.

Stick what you can into a savings account and see how the situation is looking in a couple of years?

jaybeetoo

You haven't said how many miles a year the PCP is for.

LittleWonder_2

It's 11,000 miles a year - about right for me, if not a little too much.

=rizla=

Don't forget you are paying interest on the 10k bubble payment as well.

Dr._Shoe

It is just leasing really. Some people just keep leasing. It means that they get a new car every three years, often with free servicing, tax and insurance thrown in. You only pay for the fuel. Of course you usually have to commit to keeping the mileage below a certain limit though you can increase this in return for a slightly higher monthly fee.

Most lorries you see on the road that are less than three years old are normally leased by a specialist leasing company.

arcon5

So basically:

£7700 deposit (inc dealer contribution)
£2520 monthly payments
£10k final payment
Total £20,200

What is the new cars age, mileague?
If new or next to new then doesn't look that bad, nothing special either.

But then for a not so special price, you are putting a massive deposit down at the risk (and a very real and significant risk) of not being able to afford the final payment, leaving you having paid £10k for nothing.

I'm not a fan of these deals

Jonesya

So let me get this straight, you've got a perfectly good car you own already, worth £7.7k, you give this to the dealer and commit to pay him £70 a month for the next 3 years to rent this new car and at the end if it you own nothing.

Sounds a great deal, for the car dealer that is!

Here's a suggestion, keep your existing car, save £70 a month into a savings account, dip into it for any repairs and in 3 years time consider your options.

LittleWonder_2

It's a brand new car - 15 plate.

I'm getting the general consensus that this is a bad deal. I really do appreciate the advice as I'm extremely risk averse when it comes to money. Those who I have spoken to who already do PCP have described it as a lifestyle choice - the only way to regularly have a new car.

matttye

Keep your Juke, you'll get years out of that yet!

I got a Dacia duster on PCP last year and I don't think PCP in general is bad, but don't see why you'd want to get one on PCP when you own a car outright unless it's unsuitable for you in some way.

Jonesya

Its not so much risk as such, more value for money. Brand new cars are appalling value for money because they lose so much value in depreciation in the first couple of years.

If you want value motoring then keep your existing car and run it, you'd expect another 5 years of relatively low cost motoring out of it easy.