PCP Mileage

bigjl

Kirsty_A wrote: »

It suits me to keep the monthy payments low for the next 3 years. I can only put down a small deposit this time around (don't you just love second hand cars that screw you over ?!) so after 3 years should be in a much better position to put down a bigger deposit on the newer car I get when trading in.


On a side note... this was quite an experience for me. The different levels of service, and enthusiasm to actually sell you a car, between dealerships was suprising.
One dealership took 2 hours 15 mins (!) to actually get to the figures. Excellent customer service, totally ignored my budget though and when I told them they were having a laugh, amazingly reduced their monthly price by £77! Obviously a tactic they use to get the "Wow" factor from some people, but I wonder how many people go in there and actually accept the first price offered.

IMHO a PCP deal is a way for people to get into a car they probably couldn't afford to purchase using a traditional HP agreement or Bank loan.

A bit like an interest only mortgage.

If you went for a cheaper car over 3 years or 4 years you would end up with some equity towards the end of the deal.

Rather than having no other option other than hoping you have equity left to put down into your next 3/4 year PCP deal.

You are only financing the vehicles depreciation.

LittleOne

bigjl wrote: »

IMHO a PCP deal is a way for people to get into a car they probably couldn't afford to purchase using a traditional HP agreement or Bank loan.

Not for me.


I manage my money extremely well and know I could walk in my local bank branch and take out a whopping great loan and purchase a flash car anytime I wanted.


I bought my first 3 cars second hand and each of them ran great for a while, but as they got older ended up costing me too much in repairs. My last car, which was fairly new with a very low mileage, I got on Hire Purchase just over 2 years ago. Thought I was making a sensible decision, given the issues I had with the older cars I had bought outright before, and opted to pay it off as fast as I could over 3 years.
This car got to 2 years through my agreement and has royally screwed me over. It has cost me over £1000 in repairs this year, +£350 on rental cars and public transport for the 5 weeks it was in the garage, and is now back in the garage, again. ECU issues, emissions problems, plus a heap more.


Lesson learnt... with HP, once the car is out of warranty and things go seriously wrong... you are in trouble.


PCP on the other hand... I'm driving a brand new car that is more economical therefore cheaper on fuel. I'm getting the first year with insurance included + no road tax. It's under warranty for 3 years. The dealership is 2 minutes from my place of work. They are happy to take my car off me and settle the finance as the balance outstanding is what the car is worth (just as long as my garage can fix it to a a bare minimum)


I do 52 miles a day minimum, half of this is motorway driving. I spent 2.5hours in my car every day, so I need something that is reliable! I can easily afford the monthly payments. They are a measly £20 more a month to drive a brand new car than to drive an older, unreliable, less economical car that is no longer under warranty. (The first year I will actually be saving money since they will pay my insurance for me) After 3 or 4 years, I can decide if I want to hand it back and get another new one, or take out finance to buy it and own it.


It would take me years and years to save up a healthy deposit on a newer car or to buy outright. I'm saving a deposit for a house and with all other expenses combined, it just won't happen.


Total no brainer for me.

harrys_dad

OP, you are complaining about £1000 a year repairs, but that is chickenfeed compared to the depreciation on a new car. I accept the "reliability" issue, but don't confuse yourself that it is "cheaper" to drive a new car on PCP than an older car.

tonyh66

harrys_dad wrote: »

OP, you are complaining about £1000 a year repairs, but that is chickenfeed compared to the depreciation on a new car. I accept the "reliability" issue, but don't confuse yourself that it is "cheaper" to drive a new car on PCP than an older car.

OP is probably spending more than a grand a year on the new car, and doesn't even own it unless they make the final payment. PCP is definitely more expensive than HP unless the APR% is horrendous.

motorguy

mark5 wrote: »

You put down 6000 per year, you do 15,000per year, you get made redundant, money is tight. You don't have the money to settle, the car is worth less than the final payment, your only option is to return the car and get hit with another bill you can't afford.

Well, if you cant manage your money & outgoings, have no job security, dont have redundancy insurance, dont have savings, and poor opportunity of getting another job, then PCP deals arent for you?

motorguy

bigjl wrote: »

IMHO a PCP deal is a way for people to get into a car they probably couldn't afford to purchase using a traditional HP agreement or Bank loan.

A bit like an interest only mortgage.

If you went for a cheaper car over 3 years or 4 years you would end up with some equity towards the end of the deal.

Rather than having no other option other than hoping you have equity left to put down into your next 3/4 year PCP deal.

You are only financing the vehicles depreciation.

Thats not necessarily a bad thing, if you want a fresh car for a minimal amount per month then that - or leasing - is the way to go.

motorguy

harrys_dad wrote: »

OP, you are complaining about £1000 a year repairs, but that is chickenfeed compared to the depreciation on a new car. I accept the "reliability" issue, but don't confuse yourself that it is "cheaper" to drive a new car on PCP than an older car.

It neednt be expensive to PCP or lease a new car.

There are some deals about for cars from £99 per month.

Even up that to say, £150 a month, you're rolling up your depreciation, warranty, repairs, and breakdown cover in to one monthly payment.

Any comparable 3-5 year old car bought on straight HP isnt going to work out a big hill of beans cheaper but introduces risk and unexpected bills.

motorguy

tonyh66 wrote: »

OP is probably spending more than a grand a year on the new car, and doesn't even own it unless they make the final payment. PCP is definitely more expensive than HP unless the APR% is horrendous.

You dont own the car when its on HP either, unless you make the final payment

LittleOne

motorguy wrote: »

It neednt be expensive to PCP or lease a new car.

There are some deals about for cars from £99 per month.

Even up that to say, £150 a month, you're rolling up your depreciation, warranty, repairs, and breakdown cover in to one monthly payment.

Any comparable 3-5 year old car bought on straight HP isnt going to work out a big hill of beans cheaper but introduces risk and unexpected bills.

Exactly. ^


I understand maybe for some of you, the idea of spending £1000 on repairs when things go wrong is cheaper perhaps in the long run for you than spending on PCP. Some people find it absurd the idea of 'leasing' and not owning anything.


However, for me personally, spreading the cost monthly (a cost which I can easily afford) and driving something nice, new, reliable (and under warranty if it does go bang) is by far the better option than having to be without a car for a few weeks when it does go wrong and trying to find hundreds of pounds for repairs in one go.


Everyone has different experiences I guess. My experiences with cars has been bad, despite me buying what appeared to be well looked after, serviced, second hand cars. I've just absolutely had enough of forking out money on repairs.

motorguy

Kirsty_A wrote: »

However, for me personally, spreading the cost monthly (a cost which I can easily afford) and driving something nice, new, reliable (and under warranty if it does go bang) is by far the better option than having to be without a car for a few weeks when it does go wrong and trying to find hundreds of pounds for repairs in one go.

There is a lot of sense in it, particularly when we get paid, and pay all our other bills monthly anyway - mortgage / rent, mobile phone, sky, phone rental, electric, possibly heating, etc, etc - so why not your car?

Kirsty_A wrote: »

Everyone has different experiences I guess. My experiences with cars has been bad, despite me buying what appeared to be well looked after, serviced, second hand cars. I've just absolutely had enough of forking out money on repairs.

And therein lies a big risk for a lot of people. Whilst many people have no issues with their cars and / or have cheap people they can go to for repairs, a lot dont. Plus modern cars are complex and £1K bills arent uncommon - turbo fails, DPF fails, DMF fails, injectors fail, etc, etc.

With a PCP or lease deal on new car, you remove all that risk.

Granted, you "might" pay a bit more (or you might not) but for a lot of people its worth it.