PCP/HP or do nothing.

consumers_revenge

Hi,


After thoughts here please.


At the moment I own a W reg focus ( in the main generally reliable ) that this year had a few things go wrong ( I normally estimate £250 for a years MOT and its done this til now ) 110k on the clock. This year it has cost me so far £450 due to some welding on both sides and a sudden hose burst/replace.


Im now starting to look at PCP/HP on a Dacia sandero ambiance ( the mid one ) with the old Renault engine 1.2 petrol 75v. It works out that I can have this for a £500 deposit and then £96 a month ( 15 extra per month if you want to pre pay for the servicing ) with a balloon of 2300 at the end - dealer contributes £650 to the deal. If I work it out right the total would be £7408 ( outright cost is £6795 I think ) so about £600 interest over the 4 years.


My problem is I can quite get my head around that you pay £5100 and have nothing at the end.


I realise you are 'paying for a service?' and have no MOT's or anything to worry ( 5 year warranty )about but 5k and nothing to show doesn't seem all that MSE. maybe feel better when I buy it at the end and then a good few more years of little MOT etc. Lower fuel costs? Lower insurance but being stuck to a car for 4 years.


Then I just think spend 2-3k and get a 2nd hand one but then theres an MOT within 12 months and no warranties etc.


Unsure????


Maybe I need to work out some better figures to justify? Opinions please?

consumers_revenge

Anybody anything useful please?


NUH and fatwalt, I suspect I can find you 2 a discounted offer if you want a room at premier inn?

foxy-stoat

consumers_revenge wrote: »

My problem is I can quite get my head around that you pay £5100 and have nothing at the end.

Thats if you do not pay the balloon payment after the 4 years. You are hiring a car with an option to buy it after 4 years.

I would wager that after year 2 you will be on here looking for a way to terminate the contract.

I would stick with what you have, it should last you another year. Put the £100 a month you would of paid for the new car into a savings account and after a year you can either look for another cheapy or carry on with your Focus. After 2 or 3 years you should have enough to buy a better car outright or pay to keep your Focus running.

Only look at selling it when you have hit 200,000 miles or if it ends up costing you too much.

consumers_revenge

its a fair point.


but also the at just over 7k I get a new car on the other hand

consumers_revenge

plus I can knock some more off to make payments lower as the focus will be worth about 4-450

AdrianC

consumers_revenge wrote: »

Im now starting to look at PCP/HP on a Dacia sandero ambiance ( the mid one ) with the old Renault engine 1.2 petrol 75v. It works out that I can have this for a £500 deposit and then £96 a month ( 15 extra per month if you want to pre pay for the servicing ) with a balloon of 2300 at the end - dealer contributes £650 to the deal. If I work it out right the total would be £7408 ( outright cost is £6795 I think ) so about £600 interest over the 4 years.

My problem is I can quite get my head around that you pay £5100 and have nothing at the end.

It's probably easier to think of it as borrowing the £6,150 purchase price over six or so years. You then repay over the first four years, after which you're left with a balance of £2,300. You have a choice at that point - repay the lot in one go, clear the finance and keep the car; or return the car and walk away.

That's effectively what's happening - the total amount borrowed is amortised over a longer period than the duration of the finance.

foxy-stoat

consumers_revenge wrote: »

its a fair point.


but also the at just over 7k I get a new car on the other hand

If your happy to drive this car for the next 5 years then by all means sign up. Just read the contract and know how much it will cost you to terminate the agreement after 1,2,3 years if you feel like you have to. I would pay £50 a month into a savings account on month one and use this money to make the final payment.

flashg67

Horses for courses, but personally, I want peace of mind and need a reliable car (I also have a Rover 45 as a 2nd car......) so consider pcp a relatively cheap way to achieve this, with a fixed/known cost.
If you can squeeze another £30 per month into an account, you'll be able to clear the balloon after 4 years too.

consumers_revenge

Any difference with insuring these, as its not yours?

foxy-stoat

consumers_revenge wrote: »

Any difference with insuring these, as its not yours?

You just tell them who it belongs to and thats it, they payout to the owner in the event of a total loss, you will have to read your agreement to see what happens in the event of a total loss, take out Gap insurance or whatever.

consumers_revenge

Had a talk to the dealer and might do this.


If its on PCP you get a £650 dealer contribution. Now pay the PCP deal for 6 months then ask to settle for cash. The dealer says they will charge you 3 months worth of interest to buy it early.


So move the whole lot over to a Halifax loan @ 4.4% or 0% long term credit card meaning the dealer has taken a decent whack off the 1st years depreciation but you still get a car with 5yrs warranty from registration ( you only get 3 years if you buy cash ) so again saving £395.


Looking promising as they seem to hold their value quite well.