PCP on second-hand car - worth it?

PL800

I'm looking at getting a newer car as mine nearly 4 years old and I don't want to 'run it into the ground' and start again in years to come.

I've been looking at a car at the dealership that sold me the car I have now, and they've recommended a PCP on 2 year old car (Ford Fiesta). The price of the car is £10,700, and they'll trade mine in for half that. I would prefer to save up and pay the difference and own the car, but my car will only de-value - with new reg cars out in September - and make the gap wider.

Also, the garage are offering £1000 cashback with the PCP plan of £99/36 months.

I've been reading some bad things about PCP, and I never usually do things on finance, so I'm stuck on what to do..?

motorguy

PL800 wrote: »

I'm looking at getting a newer car as mine nearly 4 years old and I don't want to 'run it into the ground' and start again in years to come.

I've been looking at a car at the dealership that sold me the car I have now, and they've recommended a PCP on 2 year old car (Ford Fiesta). The price of the car is £10,700, and they'll trade mine in for half that. I would prefer to save up and pay the difference and own the car, but my car will only de-value - with new reg cars out in September - and make the gap wider.

Also, the garage are offering £1000 cashback with the PCP plan of £99/36 months.

I've been reading some bad things about PCP, and I never usually do things on finance, so I'm stuck on what to do..?

In three years time you'll have lost the £5,350 and be walking away with nothing? :eek:

So you'd be walking away with nothing and having to start again - which is what you want to avoid?

£10,700 sounds an awful lot for a two year old fiesta. What model, engine, miles and how many doors?

thescouselander

Fundamentally there's nothing wrong with PCP as long as you get the right deal - however you finance the car you'll still lose the depreciation anyway. That said I suspect you'd be able to get a brand new car for a similar price.

Also, as far as I was aware PCP usually only runs up to a maximum age to 42 months so I find it strange you've been offered a 3 year PCP on a 2 year old car. Have you shopped around a bit to see what you can get on a new car?

Also did the garage tell you what rate of interest they're charging?

macman

There is nothing wrong with a PCP in principle, what matters is the total sum due, and the APR and balloon payment.
What matters also is whether the car is worth £10.7K, we can't advise on that without knowing year/plate, mileage and exact model. But it sound overpriced, since Fiesta's are heavily discounted from new.

onomatopoeia99

PL800 wrote: »

I'm looking at getting a newer car as mine nearly 4 years old and I don't want to 'run it into the ground' and start again in years to come.

I can't advise on PCP as I buy cars cash, but a modern car at four years old should give another decade of service or more, if properly maintained.

Things only get "run into the ground" if not properly maintained.

PL800

Thanks for your replies.

The car is the Titanium model (which has more features), 1.0 EcoBoost engine, 5 doors, 10950 miles, manual, Mar 2013 plate.

I believe the interest they're charging is about 7%, which is less than they originally quoted.

I've only just heard about PCP, as I saved up for my current car and bought outright, so it's all new to me. I'm also wondering how much my current car will depreciate when the new plates come out in September.

bazster

onomatopoeia99 wrote: »

I can't advise on PCP as I buy cars cash, but a modern car at four years old should give another decade of service or more, if properly maintained.

This. Swapping cars is fine if you like to have 'em new and shiny with all the latest gizmos but the most economical way is indeed to keep them for years and years and years (unless you're doing stupid mileage, in which case keep 'em 'til they disintegrate).

EdGasket

bazster wrote: »

This. Swapping cars is fine if you like to have 'em new and shiny with all the latest gizmos but the most economical way is indeed to keep them for years and years and years (unless you're doing stupid mileage, in which case keep 'em 'til they disintegrate).

Exactly. My two cars are 15 and 16 years old and both running well; better than many later models. Only once had a breakdown which was a crank sensor; can't do much about that and can happen to any car.

thescouselander

PL800 wrote: »

Thanks for your replies.

The car is the Titanium model (which has more features), 1.0 EcoBoost engine, 5 doors, 10950 miles, manual, Mar 2013 plate.

I believe the interest they're charging is about 7%, which is less than they originally quoted.

I've only just heard about PCP, as I saved up for my current car and bought outright, so it's all new to me. I'm also wondering how much my current car will depreciate when the new plates come out in September.

Crikey, that's expensive, you'd likely get 0% interest on a new one. Did they say if that was flat rate or APR? This is important because if it was flat rate the equivalent APR will be roughly double. Either way it doesn't sound like a good deal.

Also, if you like newer cars have you considered leasing?

Nick_C

To save others having to Google "PCP", its "Personal Contract Purchase" and it's explained here ... http://www.arnoldclark.com/newsroom/006-pcp-pch-or-hp-car-finance-explained

I do hate people using TLAs without explaining what they mean ...

motorguy

PL800 wrote: »

Thanks for your replies.

The car is the Titanium model (which has more features), 1.0 EcoBoost engine, 5 doors, 10950 miles, manual, Mar 2013 plate.

I believe the interest they're charging is about 7%, which is less than they originally quoted.

I've only just heard about PCP, as I saved up for my current car and bought outright, so it's all new to me. I'm also wondering how much my current car will depreciate when the new plates come out in September.

:eek:

They are willfully stiffing you on the price

Heres a 2014 1.0 Ecoboost Titanium 5 door, 9K miles for £2,000 less..

http://www2.autotrader.co.uk/classified/advert/201505173533838?quantity-of-doors=5&channel=cars&page=2&keywords=titanium&postcode=bt622hb&make=ford&model=fiesta&radius=1500&fuel-type=petrol&maximum-age=up_to_2_years_old&sort=default&search-target=usedcars&transmission=manual&maximum-mileage=up_to_15000_miles&onesearchad=used%2Cnearlynew%2Cnew&logcode=p

IF they give you the same for your car (and they might not), then finance the £3,000 odd on a straight loan over three years for around £100 a month, and after the three years you'll own the car. :beer:

EDIT : moneysupermarket can get you a £3k loan for £90.41 a month @ 5.4% APR.

https://www.moneysupermarket.com/loans/quick-search/results/?enquiry_id=395646172591038621