Can PCP work out good value for high mileage?

MataNui

buying a car is about one hell of a lot more than simply economics. Since you asked though from a purely financial point of view given your miles its unlikely a PCP or lease deal will be suitable. With both these you pay for the depreciation. In your case its going to be huge meaning quite large monthly payments.

Your car is going to be something you will be spending a lot of time in. You will be wanting something comfortable and reasonably spacious. Your going to need to enjoy or at least be reasonably happy spending a lot of time in it. Its unlikely you would be feeling particularly happy after 3 months or so with a standard spec version of anything. If it was me i would be looking at something mid-higher spec 3 series or high spec mondeo (even if that means slightly older used rather than new basic version etc).

Your initial choice of a C3 looks really unsuitable. If looking at that bland cheap interior for so long didint drive you nuts i think the rather basic uncomfortable looking seats would.

foxy-stoat

I would buy a more suitable car for driving 30,000 miles a year, normal suspects for me would of been 10-13 years old manual 1.9tdi A4 or A6. But since getting into a '08 2.2d Civic its miles better, spent another £300 on a decent double din headunit which controls Ipod, hands free phone and steering wheel controls - job well and truely done.

Once the clutch gives up, no signs yet though, it will get a clutch upgrade and re-map.

Best stick with what you got and save for another car....dont be one of them people who post on here......how can I get out of my 3 year PCP deal ( less than £1000 deposit on a £15,000 car ) as my circumstances have now changed, news flash....you cant without buying your way out.

andrewf75

Rebster wrote: »

Previously I've always assumed PCP offers poor value as you are paying monthly for something you never own. However, when taking into account the "cost" of depreciation on a car, I've recently started to think it may actually be quite a good deal. Particularly with such high mileage, I would see a lot of depreciation on any car I owned outright.

depends whether you buy new or used.
If you want to buy new, then the depreciation can mean PCP makes sense
If you buy used, you avoid the biggest depreciation hit

At the end of the day PCP is only a good deal in comparison to buying new and replacing with new every 3 years

Nasqueron

andrewf75 wrote: »

depends whether you buy new or used.
If you want to buy new, then the depreciation can mean PCP makes sense
If you buy used, you avoid the biggest depreciation hit

At the end of the day PCP is only a good deal in comparison to buying new and replacing with new every 3 years

Depends if you want to trade in or not. If you are buying the car to keep after 3 years then depreciation is totally irrelevant and so if you got a good deal like 0% finance then it's worth doing PCP to have the money in the bank earning interest

DoaM

Rebster wrote: »

Think you may have misread my mileage - it's 45 miles each way, not 100 miles each way.

45 x 2 = 90 miles per day
90 x 5 = 450 miles per week
450 x 52 = 23,400 miles per year

Where are you getting 30k from? If you're adding personal mileage to get to 30k then that would be 577 miles per week (average), not 450.

BeenThroughItAll

DoaM wrote: »

45 x 2 = 90 miles per day
90 x 5 = 450 miles per week
450 x 52 = 23,400 miles per year

Where are you getting 30k from? If you're adding personal mileage to get to 30k then that would be 577 miles per week (average), not 450.

Or more likely, based on average working year of 220d after sickness and holiday:

90*220 = 19,800


30,000 a year would equate to a commute of ~70mi each way.

rhysadams

There are two main products to consider:

PCP - Personal Contract Purchase - This is where you effectively purchase the vehicle over a set period of time. Depending on the finance company, you should have a Guaranteed Future Value at the end of the agreement, the car should never be worth less than this amount, so long as you are in mileage parameters and the condition of the car is fair.

Lease - PCH/Personal Contract Hire - You effectively borrow the car for a set amount of time, you give the annual mileage that you will do and at the end of the agreement, the car goes back. You shouldn;t have the right to purchase the vehicle unless you go through a third party who purchases the vehicle first.

Now the other points to consider are the brand! Whilst everyone thinks the german brands are expensive to buy, when it comes to some deals at the moment they are cheaper to lease. Just up the road from me, I can get a 2 series grand tourer for £329 plus vat down and £329 per month woth 10k per year. On a PCP I was quoted for the same vehicle over £490 with 8k and a higher deposit.

Yet a few miles the other way at Ford, they wanted more money for a bog standard S-Max.

Loads to consider but have a good look around. If its a new job, it maybe difficult to judge the mileage and you could get it wrong.

Mercdriver

rhysadams wrote: »

There are two main products to consider:

PCP - Personal Contract Purchase - This is where you effectively purchase the vehicle over a set period of time. Depending on the finance company, you should have a Guaranteed Future Value at the end of the agreement, the car should never be worth less than this amount, so long as you are in mileage parameters and the condition of the car is fair.

Lease - PCH/Personal Contract Hire - You effectively borrow the car for a set amount of time, you give the annual mileage that you will do and at the end of the agreement, the car goes back. You shouldn;t have the right to purchase the vehicle unless you go through a third party who purchases the vehicle first.

Now the other points to consider are the brand! Whilst everyone thinks the german brands are expensive to buy, when it comes to some deals at the moment they are cheaper to lease. Just up the road from me, I can get a 2 series grand tourer for £329 plus vat down and £329 per month woth 10k per year. On a PCP I was quoted for the same vehicle over £490 with 8k and a higher deposit.

Yet a few miles the other way at Ford, they wanted more money for a bog standard S-Max.

Loads to consider but have a good look around. If its a new job, it maybe difficult to judge the mileage and you could get it wrong.

Not only that, what if the job doesn't work out? After a few months it's possible that the jb might not be all it seems and that the extra time travelling is a bigger problem than originally thought.

Rebster

Thanks for the thoughts everyone. 30,000 is based on a combination of 20,000 miles commuting, and expected business/personal mileage. In reality this is an overestimate, and is likely to be closer to 25,000, but I quoted 30,000 because if I go with a PCP/lease deal I will be erring on the side of caution to avoid being stung with any excess mileage charges.

A number of you have suggested keeping my current car, but this isn't a suitable option for me for a couple of reasons. First, the main thing I want is some peace of mind that my car will be reliable under such heavy use. While there are no guarantees with any car, I really don't trust that with my current car. It's not under warranty so if anything does go wrong, I'll be paying for it. The other big reason is the size of the fuel tank - it's tiny, and would be filling up every couple of days on my new mileage. As well as all this, as it stands my car is worth a few grand. I'd rather cash in on that and get a bit of equity out of it than run it into the ground to the point it's worthless.

Some of you have also made comments about the length of time spent in the car/spent commuting. Bizarrely, although the distance of my commute will be increasing significantly, the time it takes won't be, thanks to the fact that I'm changing from a heavily congested route to a route with fairly light traffic.

Thinking it all through, I'm currently leaning towards lease rather than PCP, and have seen some good deals about. Will keep looking though!

BeenThroughItAll

Rebster wrote: »

A number of you have suggested keeping my current car, but this isn't a suitable option for me for a couple of reasons. First, the main thing I want is some peace of mind that my car will be reliable under such heavy use. While there are no guarantees with any car, I really don't trust that with my current car. It's not under warranty so if anything does go wrong, I'll be paying for it. The other big reason is the size of the fuel tank - it's tiny, and would be filling up every couple of days on my new mileage. As well as all this, as it stands my car is worth a few grand. I'd rather cash in on that and get a bit of equity out of it than run it into the ground to the point it's worthless.

Addressing these points in order (I'm not even going to go into the reliability question, as I think it's madness expecting a new car to be any more reliable overall)


1) Total time spent filling up with fuel will be the same if you do it in 2x5 minute visits to the petrol station with a small fuel tank, or 2x10 minute visits (broadly speaking, although obviously you only have to get out, open fuel flap, close fuel flap, pay, get back in once in one trip so it's not quite equal)


2) Why couldn't the money you're thinking of throwing at a lease/PCP (IMO, wasted, but that's up to you if it suits you) be saved? I guarantee if you saved the £200 a month or whatever, you'd have a LOT more in the bank by the time your current car becomes uneconomical to repair than if you sold it now and 'cashed in'.


Up to you at the end of the day - if you just *want* a new car, and can afford it, then go ahead. The costs of a PCP/lease for high mileage will be significant, and are far from a money saving option; but it's your money.


The only thing I'd point out is the number of threads on here by people who've locked themselves into expensive leases on the back of a new job who've then decided they don't like it, been made redundant, got pregnant, been injured, etc. Then there's all the threads about leased cars with major failures the poster can't afford to have fixed and which aren't covered under warranty.


Seems to me that locking oneself into a long-term, high-cost lease with few break clauses is a recipe for disaster, financially - but at the end of the day, as I say, it's your money.