Buying PCP Vehicle Outright

Mlud001

Hi,

I have a car on PCP from Evans Halshaw, which is due to expire at around this time next month. The contract includes a mileage allowance of 12,000 pa over a three year term (I am currently on around 24,000 miles). I have the option to purchase for £4,600 and have done a bit of research and similar cars have been listed at around £7k on Autotrader. I am leaning more towards buying the car outright and possibly using it as part exchange for another PCP in the future or maybe even running it for a few more years, undecided as of yet. I cannot decide whether it would be better to spend the money now or take out another PCP at around £200 per month. I would be grateful for any advice, insight or alternatives.

Thanks

DrEskimo

What do you mean by 'better'?

If by better, you mean most cost effective, then buying your car and running it for longer (potentially extending the manufacturer warranty if worried about repairs) would certainly be the most cost effective.

wgl2014

If you are happy with the car then buy it and keep it.

Depreciation is substantial in the first few years but then backs off significantly.

If you want a different car and cannot afford one without financing then a new PCP may be the solution.

Mlud001

DrEskimo wrote: »

What do you mean by 'better'?

If by better, you mean most cost effective, then buying your car and running it for longer (potentially extending the manufacturer warranty if worried about repairs) would certainly be the most cost effective.

I suppose I mean best value for money. It's tempting to go back and take out a new PCP and keep hold of my £000 but alternatively I could spend the £000 and own it outright and I could even decide to go back down the PCP route in a few months/a years time and use the car as px

facade

mlud001 wrote: »

I suppose I mean best value for money.

That would be to pay the balloon and keep it another 10 years, which works out at £38.33 a month if you scrap it and get nothing.


£200 a month only gets you the loan of a car for 3 years, and makes a nice profit for someone else, so it can't ever be best value for money.


On the other hand, if you want a new car .....;)

DrEskimo

mlud001 wrote: »

I suppose I mean best value for money. It's tempting to go back and take out a new PCP and keep hold of my £000 but alternatively I could spend the £000 and own it outright and I could even decide to go back down the PCP route in a few months/a years time and use the car as px

Then yes, buying your car and keeping it for a another 3years will be much cheaper than getting a new car on PCP for another 3yrs.

Depreciation on a new car will invariably be more expensive than additional servicing and warranty costs.

Besides, it will only take you 23months to build £4,600 in savings again if you are not spending £200 a month on a PCP....

loskie

Have you looked at taking on a cheap bank loan to pay off the PCP? At least you will own something at the end of it all.

neilmcl

mlud001 wrote: »

I suppose I mean best value for money. It's tempting to go back and take out a new PCP and keep hold of my £000 but alternatively I could spend the £000 and own it outright and I could even decide to go back down the PCP route in a few months/a years time and use the car as px

One thing that a lot of people seem to miss when thinking about going for a another PCP is the fact you have to go and find the money for another deposit. So in reality you won't be holding on to your £000, at least not a good chunk of it.

neilmcl

loskie wrote: »

Have you looked at taking on a cheap bank loan to pay off the PCP? At least you will own something at the end of it all.

Has the OP given any indication that he doesn't have the cash to buy the car outright?

parking_question_chap

loskie wrote: »

Have you looked at taking on a cheap bank loan to pay off the PCP? At least you will own something at the end of it all.

OP has already said buying out is an option, and no mention of them needing a loan.


@OP if I was in your shoes I would buy out the car and run it until it no longer makes financial sense (ie starts breaking down and costs a lot to fix).

Svein_Forkbeard

mlud001 wrote: »

a bit of research and similar cars have been listed at around £7k on Autotrader.

That is not necessarily what it is worth knock at least £1k off to be in the ball park. But even so the balloon sounds reasonable but double check, Try webuyanycar and that will give you a bottom figure.