Getting my head around PCP.Does it ever make sense if we usually look at non new car?

Hockeynut

All the car dealer we go to seem obsessed with it. And I'm not trying to knock it, I know it suits some and not others.

But I've been trying to work out the maths to be sure. Can anyone help with the maths? I am starting to think am I comparing apples with oranges. And I probably am, but it's a case of whether we can get a new car on one of these deals for similar to a couple of years old one.

About 5 years ago, we bought a BMW used approved 320d touring for £12500. We had a personal loan for it over 4 & half years, which was approx £266/month. It's now still worth around £5000 iirc. Which is obviously an asset to us now, still very reliable and not costing us much in maintenance.

We are now needing to buy a second car and I'm looking at all options.

I'm trying to think long term, 2 or 3 cars time. Not just the maths for the first few years, but TCO as a comparison.

Thanks,
David

thescouselander

What is the question exactly? What is it you don't understand about PCP?

The thing with PCP is you need to go into it with a different mindset. It's more like leasing than owning and you don't own the car unless you pay the balloon payment at the end of the deal. That means you need to commit to financing the balloon payment or means of procuring another car (assuming you still need one) at the end of the PCP deal.

DragonQ

If you want a new car every 3 years, go PCP. If you want a new car on finance and are not sure if you want to keep it after 3 years, go PCP. Otherwise, I don't see the point.

neilmcl

I'd take this further - if you wan a new car every 3/4 years AND only if you get a decent manufacturer/dealer contribution then consider a PCP deal.