Car Finance - PCP help advice

nickpe

Hi Guys

I've never had a new / newish car and for the first time i've been browsing deals.

It might not be everyone's taste but i really like the Jeep Renegade - and from a financial point of view i think id be comfortable paying around the £170 per month figure (could stretch abit more, but dont want the car dealers to use that to rip me off).
I would be ok putting a deposit of £500 into any PCP deal.

With that said i know i'm not going to be getting a brand new, but one a few years old with average miles on is fine by me.

I have seen a deal .... (i will post it in the comment section below)

I just want members help advice when going into PCP deals - i want to be clear on things i need to be wary of, and things that can help me in getting a good deal, or things to avoid to ensure i dont get a bad deal.

nickpe

https://www.autotrader.co.uk/classified/advert/201908020741142?advertising-location=at_cars&deposit=1000&yearly-mileage=10000&postcode=s639ga&radius=25&sort=monthly-price-asc&term=48&model=RENEGADE&onesearchad=Used&onesearchad=Nearly%20New&onesearchad=New&make=JEEP&page=1


Here is the car and finance deal that is on autotrader ...
Car Price is listed by dealer at £9,995
The finance package proposed is based on £500 deposit, then monthly payments of £172 with an optional final payment of £3,527 - this would be over 48 months.

Would be based on me doing 10,000 miles per year which is my average each year.

My obvious question is - does this seem like a good deal ??

motorguy

nickpe wrote: »

https://www.autotrader.co.uk/classified/advert/201908020741142?advertising-location=at_cars&deposit=1000&yearly-mileage=10000&postcode=s639ga&radius=25&sort=monthly-price-asc&term=48&model=RENEGADE&onesearchad=Used&onesearchad=Nearly%20New&onesearchad=New&make=JEEP&page=1


Here is the car and finance deal that is on autotrader ...
Car Price is listed by dealer at £9,995
The finance package proposed is based on £500 deposit, then monthly payments of £172 with an optional final payment of £3,527 - this would be over 48 months.

Would be based on me doing 10,000 miles per year which is my average each year.

My obvious question is - does this seem like a good deal ??

In a word - no.

You're being charged approx £2,283 in interest, and after 4 years you still have to find £3,527 to own it.

You'd be better paying the £500 down and taking out a cheap loan over the 4 years. Payments would be slightly higher at £209 a month, but after four years you'd own the car outright - no final payment.

https://www.money.co.uk/loans/unsecured-loans.htm

motorguy

nickpe wrote: »

https://www.autotrader.co.uk/classified/advert/201908020741142?advertising-location=at_cars&deposit=1000&yearly-mileage=10000&postcode=s639ga&radius=25&sort=monthly-price-asc&term=48&model=RENEGADE&onesearchad=Used&onesearchad=Nearly%20New&onesearchad=New&make=JEEP&page=1


Here is the car and finance deal that is on autotrader ...
Car Price is listed by dealer at £9,995
The finance package proposed is based on £500 deposit, then monthly payments of £172 with an optional final payment of £3,527 - this would be over 48 months.

Would be based on me doing 10,000 miles per year which is my average each year.

My obvious question is - does this seem like a good deal ??

i cant get that link to work to see what the specific car is?

daveyjp

You do know the Jeep Renegade is actually a Fiat (Fix It Again Tomorrow) 500.

On used cars a loan for the full amount is almost always better value.

I don't know how old the car in the link is, but with a 4 year PCP you also need to budget for the inevitable repairs as it gets older and you have to get it repaired as the car isn't yours unless you decide to pay the final payment.

nickpe

Ah right well straight away some good advice so thank you.

The car is Jeep Renegade 1.6 MULTIJET LONGITUDE 5DR
2016 plate, with 30k miles

Not sure why the link didnt work.

Arklight

Don't get PCP on a used car.

For around that amount of money you might want to try Zopa, which is a peer to peer lending cooperative that no one knows about. They offer different loans, but especially low rates for cars.

They offered me an APR of 2.9% over 5 years with next to no paperwork. I just clicked "Car loan" and within 4 days the money arrived in my account, for me to do with as I wished. I did spend most of it on a car but the phone operative said they don't really care what you buy as long as you meet the payments each month.

I was going to put it on the mortgage but it was actually a bit cheaper and much less hassle to do it with them. So if you want to borrow some additional money cheaply for fluffy dice and a mini break in the Cotswolds, it's not a bad way of doing so.

You can also overpay as much as you want or clear it completely with no penalty.

Mercdriver

As above. Don't do PCP on a used car especially one that will be 7 years old at the time you hand it in. It's rare for there to be any decent deals on a used car, and taking it out on a car that will have run out of its manufacturer's warranty means you have no protection. No doubt the dealer will try and sell you their "warranty" which is actually an insurance product which will likely not cover anything that might start to go wrong.

darcyscorpion

Hi
I have PCP and the credit company are offering overpayments on the 4 year deal. I know that overpaying on mortgages is good but when it comes to PCP, where you have the option to purchase the vehicle after 4 years, does it make any sense to overpay a little every month or is this wasted money best put somewhere else? The answer to this question would of course allow me to make an early decision on whether to pay the balloon payment at the end of the term (would this come quicker?) and keep the car?

LandyAndy

darcyscorpion wrote: »

Hi
I have PCP and the credit company are offering overpayments on the 4 year deal. I know that overpaying on mortgages is good but when it comes to PCP, where you have the option to purchase the vehicle after 4 years, does it make any sense to overpay a little every month or is this wasted money best put somewhere else? The answer to this question would of course allow me to make an early decision on whether to pay the balloon payment at the end of the term (would this come quicker?) and keep the car?

Isn't that the decision you have to make first? If you aren't going to keep the car then there is no point in overpaying.

AdrianC

motorguy wrote: »

i cant get that link to work to see what the specific car is?

The first part of the link, up to the "?"
https://www.autotrader.co.uk/classified/advert/201908020741142

Autotrader URLs start with the date the ad was placed - 2nd August. It's been in stock nearly two months and counting. They're getting bored of looking at it by now. They say it's already been reduced by a grand, but maybe there's more to come...?

OP - don't get hung up on the monthly cost. Look at the total.
£500 + (48 x £172) = £8,756
Not a lot short of the price to buy it outright - but £3,527 still to pay if you want to own it, so £12,283 total = £2,288 finance costs, close on a quarter of the purchase price.

PCPs on used cars are rarely good value.