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PCP and Personal Loan
What are your thoughts on paying the settlement figure of PCP using a personal loan?
We intend to keep the car. However we obviously can't predict the future in terms of finances. Unsure of whether to risk a personal loan.
Not sure of complete risks should it come to point of not affording it for example down the line?
Any specific companies offer advice.
Comments much appreciated
We intend to keep the car. However we obviously can't predict the future in terms of finances. Unsure of whether to risk a personal loan.
Not sure of complete risks should it come to point of not affording it for example down the line?
Any specific companies offer advice.
Comments much appreciated
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Comments
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That would be an unsecured loan presumably? Repercussions of not paying it are very little except defaults on your credit record. How much is it and are you likely to be approved? Clean credit record and affordability ok?I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0
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The issue will be whether you can get accepted at a good rate whilst having the outstanding PCP.
In principle though, if the personal loan will cost you less than the PCP in interest costs (look at costs, not just APR) then yes. If not just keep paying the PCP and put the additional cost you would have paid on the personal loan on paying down the PCP.
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I have a car on PCP and the interest rate is 0% for two years. I pay £55 per month and the (small hatchback) car's four years old. I pay no road tax.
Having had a personal loan in the past, I would definitely NOT have one ever again, nor would I recommend it to anyone else. It just seemed to drag on for ever and the interest was ridiculous.
As you are intending to be in debt anyway, why not just change your car when the PCP period is over, upgrade to a newer model? But look around for deals that offer 0% interest for two years, similar to mine.Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.0 -
My PCP has 0% interest for two years, so not all loans will be better than that. Best to shop around, as I suggested to the OP.DrEskimo said:The issue will be whether you can get accepted at a good rate whilst having the outstanding PCP.
In principle though, if the personal loan will cost you less than the PCP in interest costs (look at costs, not just APR) then yes. If not just keep paying the PCP and put the additional cost you would have paid on the personal loan on paying down the PCP.Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.0 -
Thanks all
We intend to keep car at end either way. Just exploring best way of doing that. If you do encounter finance issues it be the same issue whether PCP or loan. Which one is more understanding? Is it bad to refinance a loan?0 -
If not a personal loan, how else will the OP pay the PCP balloon payment?0
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What's OP?0
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Hate to burst your bubble but in every example I have looked at, those dealers offering 0% finance deals always advertised their cars purchase price higher than average. Take my current car. A dealer group had 0% finance but the price of the car was £2k more than I paid from a main dealer that didn't have 0% finance. Moreover, I took their interest bearing PCP and got a further £1,000 deposit contribution that also wasn't on offer on the 0% deal, making it £3,000 cheaper. I then settled the finance to not pay any interest. You need to look at the total cost. Whilst you may save on interest costs relative to someone who takes an interest bearing finance product (like personal loan), you are potentially paying more in depreciation costs though the higher purchase cost.MalMonroe said:I have a car on PCP and the interest rate is 0% for two years. I pay £55 per month and the (small hatchback) car's four years old. I pay no road tax.
Having had a personal loan in the past, I would definitely NOT have one ever again, nor would I recommend it to anyone else. It just seemed to drag on for ever and the interest was ridiculous.
As you are intending to be in debt anyway, why not just change your car when the PCP period is over, upgrade to a newer model? But look around for deals that offer 0% interest for two years, similar to mine.
Your comment about personal loans doesn't make any sense. You agree to the term and interest upfront?
It's also important to point out that 'upgrading' the car after a few years is nothing unique to PCP. Trading a car in and buying another car every few years is exactly the same process regardless of whether there is finance (personal loan or PCP) or not involved.2 -
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