best PCP deposit?

Shajidnoor

If I were to purchase a £20K car, through PCP, whats the best deposit to put down? I know people say like 10% or so, but is it possible to put like a deposit of 50%

System

The more you put down the lower your monthly payments and the less interest you pay. If its 0% finance though you're better putting down the least money you can and leaving what you would have put towards the deposit in a high interest account instead. That's your money working hardest for you.

I'd be surprised if you can put down a deposit of 50% because that's most of the amount of the vehicle that would be financed by PCP in the first place. Typically around 30-40% of the sale price, depending on the length of the PCP, is the amount for the balloon payment at the end.

lopsyfa

I second the above. The best to put down depends on the interest rate. If your savings interest rate is more than the PCP rate, then put as little deposit as possible. However if your PCP rate is higher than your savings rate, put as much deposit as possible. Just note that most companies will have a deposit limit (around a third of the price of the car). Even if there is a limit, you can always call up later and overpay the loan (check any early payment charge).

foxy-stoat

Shajidnoor wrote: »

If I were to purchase a £20K car, through PCP, whats the best deposit to put down? I know people say like 10% or so, but is it possible to put like a deposit of 50%

I would take your £10,000 cash and buy a second hand car and run that for a few years.

Shajidnoor

Thanks for the advice I understand a little bit more and I'll take your advice.

Shajidnoor

foxy-stoat wrote: »

I would take your £10,000 cash and buy a second hand car and run that for a few years.

The car I'm looking at is my dream 2nd car