PCP Questions

Nasqueron

motorguy wrote: »

Its not a matter of money to burn though. If thats how someone choses to spend their hard earned, thats their prerogative.

You could spend £250 on a night out if you put your mind to it, and that too would be someones prerogative

It's a money Saving site, buying a car on PCP, paying for 3 years, losing 2/3 of the value, getting another one and paying for another 3 years etc and ultimately not having anything for it is not money saving

motorguy

Nasqueron wrote: »

It's a money Saving site, buying a car on PCP, paying for 3 years, losing 2/3 of the value, getting another one and paying for another 3 years etc and ultimately not having anything for it is not money saving

The MSE forum is about getting the best value for your £, hence why here are loads of deals mentioned for expensive holidays, big TVs, how to get the best deals on loans, deals on going out, etc.

If someone wants to PCP a new car, then the role of this site (and thus us as contributors) is to help ensure the person gets the best deal they can for their particular circumstance.

Whilst it is prudent to suggest other alternatives, it is not up to us to carte blanche judge that PCPing a new car is a stupid or bad idea or is "not moneysaving".

Perhaps when theres a deal comes up for a big new Sony LCD TV on the "Quick grabbit" board, you'll jump in there extolling the merits of buying an old CRT TV off gumtree as that is "moneysaving"?

Tiddlywinks

Dr_Crypto wrote: »

Minis clearly depreciate hard.

Actually Mini is one of the best performing brands where depreciation is concerned.

Link

Your friend's issue is that she paid only a small deposit and chose a four year plan - why did she do that when she appears to be fickle over her car choices?

Nasqueron wrote: »

It's a money Saving site, buying a car on PCP, paying for 3 years, losing 2/3 of the value, getting another one and paying for another 3 years etc and ultimately not having anything for it is not money saving

So many people are judgemental about PCP contracts or buying new cars... as long as the buyer is aware of the costs / rules and is happy with them then what is the problem?

I have a Mini Cooper S - I bought it new in 2012. I used a PCP contract which offered an APR which was lower than a loan and equal to bank saving rates.

The deal also included a dealer incentive and a manufacturer contribution.

In 2015, when the three year period was up, I chose to buy the car and paid the balloon payment.

I fully intended to keep the car for the long haul.

Now, 2017, I have to change my car because of changing health... I need a higher seating position.

I am buying the next car on a PCP with 0% apr - so I am choosing a four year period with a minimal deposit to get the most out of the deal.

At the end of the four years I will probably just pay off the balloon payment.

Not everyone that uses a PCP does so because they cannot afford to buy otherwise... nor does using a PCP mean that the buyer is financially inept.

MobileSaver

Nasqueron wrote: »

not having anything for it

Hmm, driving a brand new car every three years is hardly "not having anything for it!"

F1F93

Nasqueron wrote: »

It's a money Saving site, buying a car on PCP, paying for 3 years, losing 2/3 of the value, getting another one and paying for another 3 years etc and ultimately not having anything for it is not money saving

Alternatively assume you start with 12k and have £250 disposable income.

You could spend all 12k on a used car, then be able to save £250 a month for 4 years and you'd be left with a very used car that's not worth much, and 12k in cash.

You could instead take out a PCP for 250 a month. You can no longer save but you have the 12k preserved. After 4 years you will be left with 12k in cash and a car with (possibly) a small amount of equity. Yes, not as much equity as in the above scenario but you have been driving around in a brand new car.

Then consider that a new model will have a warranty, no MOT for 3 years, and will often be slightly cheaper to run that an older model and the gap falls even more - definitely not "nothing to show for it!"

Obviously new cars aren't for everyone, but at the same time, if no one bought new cars then where will the second hand cars of the future come from? The important thing is that the deal works for the person.

Dr_Crypto

Thanks all. I think I (and my friend) now have a better understanding of how PCP works. I think she will have to keep the Mini for a bit longer in order to build some equity for an upgraded vehicle.

I guess a brand new car with extras etc for £500 and £250/mth isn't so bad a deal in many ways. Cars are always going to cost money and I know she wouldn't want the (perceived) hassle of used cars. May not be the cheapest way of driving but I guess we all spend our money differently.