Mature PG student: PCP loan

Jamster1

Hi,

I’m looking to purchase a car and unsure if I have a chance of being accepted onto a PCP finance plan due to my current position of being a postgraduate student.

I’m 29, studying for a PhD which is funded (salary is on par for graduate jobs) and was in full time work previous prior to returning to university. My finance history is sound and I’ve never missed a payment, including that on a 3yr HP of my current car which I recently paid off. I don’t own a property however. Despite this, I was wondering if the “student” title will put finance companies off? The loan eligibility calculator suggests I have a 95% chance of a straight up loan from a few providers but I was wondering if this would be similar for a PCP arrangement given the risks are slightly different?

The HP/bank loan route will save me a few bob down the line but I quite like the flexibility of a PCP plan therefore I’m at least considering it.

Cheers,
Jam.

DrEskimo

You'll probably be fine. I was accepted for one when I was daft enough to finance a brand new car on PCP whilst doing my PhD

If you want advice, just stick with your current car....Getting that car on PCP finance is one of the only financial regrets I have, but I guess I learnt from it...!

it depends on your definition of 'few bob', but I suspect it's likely going to cost you a lot more than you think...do you have precise details of the car and the agreement?

foxy-stoat

Based on the information you have given....no one on here, not even Master Yoda with all his Midichlorians, will be able to give you an accurate answer.

I would try for a bank loan and buy a cheaper/older car outright and save for a nicer car when you have finished your studying.

iwb100

I suspect you will be able to get one but one might question why you are buying a brand new car as a PhD student? Cheap second hand would make more sense.....

If you really want to then contact dealers and ask. "Would I be eligible for your PCP finance offers as a PhD student - my annual income is £X".

Usually they are subject to a credit check which should be ok and an affordability one - which is where the question will be asked - whether your student "bursary" will be considered income by their finance provider.

Note that I doubt you are "salaried" as in paid via your University's PAYE system and taxed - if you are then you are technically employed and can simply ignore being a PhD student and simply report your role as "researcher" and provide your salary details.

If you are on a student bursary however, then you will have to check with dealers. They are not that picky on PCP finance but a dealer will not bother wasting time with you if they know its a non-starter.

However - before you jump into PCP decide whether its the best deal. PCP is effectively "hiring" a new car (never use it for a second hand one) for a period of time. Technically at the end you have the option to buy - but in reality this is usually not a good deal and there are better ways to own the car.

Assume that PCP deal is simply a rental for the period advertised. Then compare with PCH deals. Work out overall which will be cheaper. Sometimes PCP with the dealer incentives etc can work out cheaper.

Mercdriver

A PCP will only be flexible if you are getting a sizeable contribution and/or 0% finance. Otherwise you are constantly paying interest on the balloon. Why are you looking to change from the car you own outright?

Jamster1

Thank you for the advice everyone, much appreciated.

Honestly I don’t need a new car, it’s more of a want. That said my current car has done 95K (not really that much I accept) and has a known issue with chain tensioner. I’ve researched and it’s a 4 figure payout if I fix it before it becomes a problem or deal with it after it fails. It’s also DSG driven which, with the mileage it’s at, could be an expensive fix if the mechatronics fails from what I’ve read. I’m in a position to afford a new(er) car with no current responsibilities so thought why the hell not and treat myself before I’m 30

The HP/loan looks the best way I admit. It’s what I did with my current car, all be it got duped into higher interest rates by going directly with the main dealer (they threw in extras to compensate admittedly). I was looking into PCP particularly because I may purchase a diesel car and felt the balloon payment gives a safety net for future vehicle value in case of government hammering down even more.

I probably won’t buy new: some companies offer reasonable used car APR rates such as Admiral, however the MSE loan eligibility tool suggests I’ve a zero chance of a loan from them. Rather confusing when there a fair few other providers happy to give a fair chunk of money!

PCH is an option yes. Although it appears more about chasing the deal rather than a specific car and I’m more of the latter.

worried_jim

Jamster1 wrote: »

Thank you for the advice everyone, much appreciated.

Honestly I don’t need a new car, it’s more of a want. That said my current car has done 95K (not really that much I accept) and has a known issue with chain tensioner. I’ve researched and it’s a 4 figure payout if I fix it before it becomes a problem or deal with it after it fails. It’s also DSG driven which, with the mileage it’s at, could be an expensive fix if the mechatronics fails from what I’ve read. I’m in a position to afford a new(er) car with no current responsibilities so thought why the hell not and treat myself before I’m 30

The HP/loan looks the best way I admit. It’s what I did with my current car, all be it got duped into higher interest rates by going directly with the main dealer (they threw in extras to compensate admittedly). I was looking into PCP particularly because I may purchase a diesel car and felt the balloon payment gives a safety net for future vehicle value in case of government hammering down even more.

I probably won’t buy new: some companies offer reasonable used car APR rates such as Admiral, however the MSE loan eligibility tool suggests I’ve a zero chance of a loan from them. Rather confusing when there a fair few other providers happy to give a fair chunk of money!

PCH is an option yes. Although it appears more about chasing the deal rather than a specific car and I’m more of the latter.

Put your money in a savings account and keep running the car you have until it runs no more. I've only ever had one car with less than 95k miles on the clock in 28 years of motoring- never been an issue. Keep is serviced! Good look with your PHD!

Jamster1

I’ve thought about that as it would be the best decision financially. But Ive always gone with a balance between needs and wants when it comes to money and I feel a newer car would be a nice treat I won’t regret. Thanks for your kind words regarding the PhD however

Anyway, I’ve thought about it and scrapped the PCP idea. It was luring me to cars that I couldn’t really afford and got carried away! The bank loan/HP looks the better option, even if it means a bigger deposit and/or and extra years payments. I’ll own the car in the end at least as some of you have pointed out.

Cheers everyone.