Is PCP a good idea?

clayton16749

Hello


I've searched the forum and there don't appear to be many threads on this, certainly not recently.


I want to get a new car and personal contract purchase seems on paper to be a sensible way of regularly having newer vehicles.


Can anyone recommend them or has anyone had any especially bad experiences? I've also seen that a number of car supermarkets do PCP on nearly new cars as well - anyone have any experience of this and importantly is it actually realistic to expect some level of 'equity' at the end of the deal that can be used as a deposit for the next deal?


Thanks

neilmcl

clayton16749 wrote: »

Hello


I've searched the forum and there don't appear to be many threads on this, certainly not recently.

You've not searched very well then as there seems to be discussions about PCPs nearly every other day.

There a pros and cons for financing a car purchase this way, the following should explain a few things for you - http://www.thecarexpert.co.uk/car-finance-pcp-explained/

The two things that I'd advise is don't think too much about having equity at the end of the agreement as invariably there rarely is, and secondly I'd only take out a PCP deal if you were getting a sizeable dealer/manufacturing contribution deal alongside.

What are your reasons for looking at PCP?

Mobeer

There are lots of positive and negative stories, and lots of fans and critics. I would say the key thing is to get a full set of figures and take time to think them over.

jimjames

To answer the question from a personal viewpoint, no I don't think it's a good idea. I prefer to buy a cheaper car with cash so I'm not in debt and with the inflexibility of being tied to a contract. Read a few posts here about the problems people have when their situation changes and they need to cancel

fred246

Quite a philosophical post this one. Is there a sensible way of doing something that is not sensible?

thescouselander

Personally it suits me. PCP provides use of a new car with the risks of ownership reduced to a minimum for a known monthly sum. Its not the cheapest form of motoring but then I like cars and am prepared to splash a bit of cash on something I enjoy.

In my case I got a good dealer and manufacturer contribution and 0% interest so overall it has worked out cheaper than buying a nearly new car using a loan. Shop around for the best deal though as I've seen some really expensive ones that seem very poor value for money.

khcomp

I've always bought what I can afford outright, wouldn't consider a PCP, BUT.... my 21 year old daughter bought a brand new VW on PCP last year - free tax, free servicing, no MOT for three years, 70mpg rather than her previous car's 30, cheap insurance... I can see the appeal, and she loves it. On paper she is financially better off and she has a car which should be safe & reliable.

dannyrst

fred246 wrote: »

Quite a philosophical post this one. Is there a sensible way of doing something that is not sensible?

Why isn't it sensible? If the OP wants new cars every 2/3 years it can be one of the cheapest ways to go about it. Seems sensible to me.

neilmcl

fred246 wrote: »

Quite a philosophical post this one. Is there a sensible way of doing something that is not sensible?

All this does is highlight the usual ignorance about this subject.

Ebe_Scrooge

PCP can be a sensible option if you're wanting a new car anyway, and want to change it every 2 or 3 years. Personally I'm in the camp of buying an older car outright for cash, doing most repairs and maintenance myself, keeping it for several years, and saving shed-loads of money into the bargain.


It's horses for courses - there are pros and cons to both approaches, it's down to personal preference and your priorities as to what you want to do with your money. To my mind, a brand new car is always going to be an expense I personally could neither afford nor justify, however it's financed. But many people do like to spend their money on a new car, that's fine by me.

ERICS_MUM

thescouselander wrote: »

Personally it suits me. PCP provides use of a new car with the risks of ownership reduced to a minimum for a known monthly sum. Its not the cheapest form of motoring but then I like cars and am prepared to splash a bit of cash on something I enjoy.

In my case I got a good dealer and manufacturer contribution and 0% interest so overall it has worked out cheaper than buying a nearly new car using a loan. Shop around for the best deal though as I've seen some really expensive ones that seem very poor value for money.

Do you mind me asking what sort of dealer/manufacturer contribution you would 'expect' please ?

I was offered £750 earlier this week, on PCP for an Auris costing £22500. I thought this was very poor but perhaps my expectations are too high ?

Thanks