MINI PCP acceptance likely?

steph281

hi all, new here but just wanted to double check if anyone had any idea of how likely I’d be to be accepted for pcp on a new Mini Countryman I’ve applied for

After a £3000 deposit and £2300 dealer discount, the price is £24000 with a guaranteed future value of £9200 according to my quote. 

I’ve been quoted 48 months payments of £315 and I earn around £1200 a month with very few outgoings,

they finance company have asked for bank statements to check affordability but I’ve a small overdraft of £150 I use sometimes due to putting a large chunk of my savings away every month. Will this affect me badly in this case?

thanks in advance!

steph281

Sorry forgot to add that my Experian credit score is 955/999 and I’ve never missed a payment of any kind since first driving 5 years ago and on any phone bill payment if that helps?

D3xt3r5L4b

It doesn’t help.
Your credit score isn’t a real thing that any lender sees or uses in lending decisions.

PCP and car finance is easy to get since it’s a loan secured against an asset. 

steph281

D3xt3r5L4b said:

It doesn’t help.
Your credit score isn’t a real thing that any lender sees or uses in lending decisions.

PCP and car finance is easy to get since it’s a loan secured against an asset. 

Thanks for replying! Hopefully it will all go through then thanks for your help 

Petriix

That sounds like a terrible idea to spend over 25% of your income on interest and depreciation. Don't mistakenly believe you will own an asset of any value; under PCP you always owe more than the current value of the vehicle until very near the end of the term.

If you're spending that much then I would definitely be buying an EV. 

Malkytheheed

"but I’ve a small overdraft of £150 I use sometimes due to putting a large chunk of my savings away every month"

Why on earth are you paying a 40% OD AND putting away savings?? The OD will wipe out any gains you get on the savings. That is madness. To be honest, so is buying a car of that value on your salary, and so is buying a car on PCP in the first place. 

steph281

Malkytheheed said:

"but I’ve a small overdraft of £150 I use sometimes due to putting a large  chunk of my savings away every month"

Why on earth are you paying a 40% OD AND putting away savings?? The OD will wipe out any gains you get on the savings. That is madness. To be honest, so is buying a car of that value on your salary, and so is buying a car on PCP in the first place. 

It’s an arranged one I just use from time to time so the charge IF I use is very small. 

I save as much of my pay as possible each month and do well with this,

PCP suits me as I like to be able to hand a car back, I know it’s not for everyone 

Malkytheheed

But saving so much of your pay that you dip into your overdraft is crazy. Sorry but it is. 

steph281

Malkytheheed said:

But saving so much of your pay that you dip into your overdraft is crazy. Sorry but it is. 

That’s very true I’m trying to get out of the bad habit of it! 

DrEskimo

steph281 said:

PCP suits me as I like to be able to hand a car back, I know it’s not for everyone 

You can hand the car back whether you use finance or not. There is nothing special about PCP. You get the same trade in price whether you buy it outright or use a personal loan or use PCP.

The issue is that you are financing a brand new car that has a value over double what you earn and is expected to lose around £15,000 in the next four years. Not to mention the additional £3,000 you are just gifting Mini Finance to borrow this money. Can you really justify that level of spending on just car depreciation and interest on your income? Would saving £18,000 over the next 4yrs not enable you to do a lot more (e.g. house deposit) than simply spending it on a renting a Mini for a 4yrs?

You've also got petrol, VED, insurance, main dealer servicing (will be a requirement for the PCP) and general maintenance. Not to mention any possible repair bills in the fourth year after the warranty expires. All in it's likely going to cost you >50% of your take home pay just to run a car. How much does that enable you to save above living costs?

Then after 4yrs what will you do for a car? Are you going to save another £200/month to pay the £9,200 final payment? If not and you hand the car back, how will you fund the next car?

Grumpy_chap

I really can't believe that anybody thinks it is a great idea to spend 25% of their salary for 4 years to use (not buy) a car worth twice their annual salary.