PCP on second-hand car - worth it?

thescouselander

motorguy wrote: »

All very well if the O/P wasnt being asked to put in over £5,000 of a deposit, which they'll have lost + the monthly payments. :eek:

One of their primary reasons for doing this is so that they dont have to "start again" down the line, but this is exactly what this deal is going to do for them - leave them with nothing.

Thats not how its supposed to work. If the value of the car is more than the outstanding finance (which should normally be the case) the buyer has equity in the vehicle and keeps the difference which could then be used as a deposit for the next deal.

motorguy

thescouselander wrote: »

Again you misunderstand how it works. If the value of the car is more than the outstanding finance (which should normally be the case) the buyer has equity in the vehicle and keeps the difference which could then be used as a deposit for the next deal.

I know extremely well how it works - i'm ex motor trade and have also used PCP deals in the past. My last car was on a PCP deal actually.

There is little equity left in these deals at the end - not in the realms of what the O/P has at the moment (a car worth £5k) and not given the car is £2K overpriced to start with.

I have no issues with PCP deals, however this is a BAD one, a VERY bad one.

PCP deals work best if :-

• Its a new car
• Theres a manufacturer finance contribution to sweeten the deal OR theres a manufacturer backed incentive to use it
• Its at a low rate or 0% finance
• You're putting in a small deposit
• You have no expectation of owning the car
• You accept that you're going to walk away with nothing, and if there is something in it, thats a bonus.

The O/P would be far far better off buying the same car at £8700 and finance the £3K or so difference with a cheap personal loan.

motorguy

thescouselander wrote: »

Thats how its supposed to work. If the value of the car is more than the outstanding finance (which should normally be the case) the buyer has equity in the vehicle and keeps the difference which could then be used as a deposit for the next deal.

And its also not what the O/P wants - they dont want to be left with nothing (or close to nothing) and have to start again, hence why they were looking at changing their car.

This deal is wildly inappropriate for their requirements. If the car dealer was given the same information and "recommended" that deal, they should be very ashamed of themselves.

thescouselander

motorguy wrote: »

I know extremely well how it works - i'm ex motor trade and have also used PCP deals in the past. My last car was on a PCP deal actually.

There is little equity left in these deals at the end - not in the realms of what the O/P has at the moment (a car worth £5k) and not given the car is £2K overpriced to start with.

I have no issues with PCP deals, however this is a BAD one, a VERY bad one.

PCP deals work best if :-

• Its a new car
• Theres a manufacturer finance contribution to sweeten the deal OR theres a manufacturer backed incentive to use it
• Its at a low rate or 0% finance
• You're putting in a small deposit
• You have no expectation of owning the car
• You accept that you're going to walk away with nothing, and if there is something in it, thats a bonus.

The O/P would be far far better off buying the same car at £8700 and finance the £3K or so difference with a cheap personal loan.

Yes, I agree - the deal seems very poor. Also the difference could easily be covered with a 0% credit card if it could be paid off quickly enough.

On the other hand the OP seems to like driving newer cars and the right PCP deal might work out very well for them although a change in mindset might be needed.

jimjames

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.

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

Spot on.
I've got a 2000 X plate Ford Puma. FSH and maintained, still runs perfectly so thinking a 4 year old car is past it is a bit OTT.

Mercdriver

Transformers wrote: »

Eh, perhaps you should have explained your use of 'TLA' then - you've committed exactly the same 'offence' in your reply!

I suspect that's irony at work....

PL800

Thanks for these replies - much appreciated!

I've turned the car down, and will look around some more, only if something catches my eye. I may keep my current car for a while longer and just get it serviced for another year. I've only been looking for a newer car before mine depreciates some more and get something with a bit more power..

The dealership were offering 2 year Ford warranty on the car, but then again, warranties don't often cover a lot.