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PCP v Bank Loan?
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I don't agree with the negative PCP talk. PCP should and must be thought of as a lease. You lease a car for a number of years then either hand it back or start a new lease. (Buying it is not a good plan for PCP - if you want to buy a car get a bank loan or save up the cash).
It is then simply a question of whether PCP or PCH deal costs more. My last car was on PCH for 3 years. But when switching I found a better deal on PCP for the new one and couldn't match it with PCH thanks to PCP dealer incentives.
People with reasonable salaries usually are happy to pay monthly - and yes therein lies a risk but the other side is that most people will rarely if ever be in a position to spend £15K on a car outright and therefore PCP is a practical solution to this problem of sufficient cash flow but insufficient savings. It isn't particularly costly either if you do your research, negotiate a good deal and make sure that whatever you do, PCP or PCH you are paying the lowest total amount possible.0 -
MoneySavingMole wrote: »Because I can? I like the vehicle, I can afford to and I guess I'd rather drive a nice car than save the money?
If you can afford to why aren't you buying the car with cash?0 -
I have only ever bought cars outright. One thing that would put me off PCP is that when the car is handed back every speck of dust seems to reduce the value.Je suis sabot...0
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Barney_Rubble_0403 wrote: »Do pcp deals normally limit the borrower to a maximum amount of miles over the duration of the deal resulting in excessive mileage charges?
The excess mileage charges are only payable if you hand the car back.
Most people opt for one of the other two main options- Trade the car in / sell it
- Pay the balloon in some way
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If you can afford to why aren't you buying the car with cash?
That old chestnut....
He can afford the payments, just like people can afford the payments on their mortgage, or afford the payments on their £1,000 mobile phone contract because they dont want to / cant justify / dont have the cash at hand to pay for it outright.0 -
Hoof_Hearted wrote: »I have only ever bought cars outright. One thing that would put me off PCP is that when the car is handed back every speck of dust seems to reduce the value.
Theres BVRLA guidelines that finance companies adhere to as to what can and cant be charged for. You can read this up front and is widely published.
Also, very very few people hand the car back - its generally traded in or sold on in some way.0 -
Hoof_Hearted wrote: »I have only ever bought cars outright.
Personally, i decide on the car i want then decide on the best way for me to pay for it. Sometimes its been cash, sometimes its been personal loan, sometimes its been PCP, sometimes its been straight HP.0 -
Well, other than mortgage, I like to avoid debt. I buy what I can afford and there are a lot of decent cars around for not a lot of money. Mind you, my car history is less than interesting to a car buff.Je suis sabot...0
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