What should i do with my car

jezzer_72

Hi all,

I'm after some opinions and views on what people have done when coming to the end of the PCP agreement and their experience of the choice they made, did it make financial sense, would you have done something different?

I own two cars (both in the family home) both on PCP and ending a few months. I have the usual options according to the agreement (hand it back, part ex, pay the final sum). I feel as if i should pay the balloon payment (about 6k on both) on at least one of them and own it outright. One will probably just go back as there will be about £100 equity and we have had a slight issue with it in recent months.

However, i do think i'll change my car in the next few years (probably 3) so the balloon payment might not be a good idea. The only reason why i've giving thought to handing one back is because we have had an issue with it that i'll be getting fixed shortly anyway (as i have to no matter what i decide) and i've lost confidence in it (silly really as now it will be fixed, it will probably be better to keep but that the human condition i guess).

I've done my sums and without a good deal from the Dealer (who haven't put anything spectacular on the table yet) I will end up paying more (probably £100 more a month) for a new deal.

Difficulty is we have two cars (and probably need two due to our differing work hours). Could afford two but i feel like PCP is a massive waste of money when i think of how much these two cars have cost. However, it's probably been cheap in total for the 4 years (was 4% APR on the PCP) and all the usual incentives (free servicing etc. saving some serious money) but i'd prefer to 6k else invest/spend the money elsewhere. In any case, half of that 6k would probably find its way into another PCP deal if i change hence it feels like a waste.

Any stories on how keeping the car or taking out another PCP worked out for you would be helpful.

This probably makes no sense so ask questions if needed.

TadleyBaggie

My PCP ('65 Qashqai) was due to end late 2018. Around the start of 2018 I started to look at what I would do next and decided I would probably buy a hybrid next, the Kia Nero fitted the bill perfectly. Got a few quotes and realised I would have to pay 50% more per month. In the end I decided that my current car was fine as it was and so I got a settlement figure, borrowed the amount I needed at a low APR and paid off the PCP about a year ago. So in 2 years the loan will be fully paid off. What I will do then isn't yet decided, depends on how the car is holding up.

jezzer_72

Hi Tadley, Thanks for the reply.

I am in a similar position. A new car for on going costs doesn't seem to equal a good buy at the moment and the deals are terrible.

One reason for buying the two cars in the first place (apart from needing them at that point) was because they had 3 years free servicing, 1 year insurance, 4.5k off the total of the car, mats and one had additional features (mud flaps, auto lighting and wipers) as the we picked up a stock car... dealer clearly wanted the sales numbers that month (literally purchased the weekend before the end of the month).

System

From a purely money saving point of view keeping the car for several more years after the PCP ends is the most financially beneficial.

One reason for buying the two cars in the first place (apart from needing them at that point) was because they had 3 years free servicing, 1 year insurance, 4.5k off the total of the car, mats and one had additional features (mud flaps, auto lighting and wipers)

And how many thousands did that free servicing, insurance etc cost in the first two years massive depreciation.

Buying new is the most expensive way to own a car, the first two years depreciation can total more than the entire rest of the depreciation for the remaining decade or more lifespan of the car until it goes to the scrapyard.

jezzer_72

Very true. I ended up saving in total (with the extras and insurance no money off) based on the list cost of extras, about 4k per car. I saved around 2k on my insurance (mine is stupidly high as it was my first car but i don't remember the full total from comparisons) and 800-1000 on the other car. I believe the interest over the four years was about 2k. The discounts on the car equally add to the saving. At the time it was a good choice to buy.. I needed a car and i had no other means to afford one with only a small amount of savings (not enough to get anything reliable particularly when looking at used).

In my opinion the depreciation happens regardless and its the price you pay for getting a new car. It makes no difference to your choice if you buy a new car, only if you are considering a use or new car. If i keep the car the depreciation is neither here nor there though. An online valuation shows the car is worth just over half what i paid after 4 years. Clearly buying something outright is generally always better.