Buying pcp car

Kirstymc89

Hi so I have decided to buy my current pcp car, my last payment day when they take the ballon payment is may!! Just looking for advice I haven’t done this before. So if I want to take a bank loan out for it after I have applied and ( hopefully) be accepted for the loan. What do I do next? I’m I better going through my current car garage ( wasn’t sure if they would help as I’m not buying a new pcp deal)  or doing it myself? The finance company said they could keep rolling the payments until it’s paid off so I’m I better just doing that or cheaper getting a back loan? Any advice would be greatly appreciated thanks  

neilmcl

If you do nothing the final payment will leave your account on the designated day and the car will be yours. Obviously if you want to finance this via a loan then you want to make sure that get's paid into your account before that date. Not sure why you'd want to go through your car dealer to arrange a bank loan though.

TadleyBaggie

I decided to pay off my PCP 6 months early, got a settlement figure, applied and got a loan with my bank at 3.6% and paid it off.

NottinghamKnight

Finance company option is likely to be expensive, if applying for a bank loan try to do some soft searches to ensure your credit file isn't hammered, loads of searches in a short term indicates you are desperate for money and will either increase rates or make a loan harder to find at all. How big a loan do you need and over how long are you looking to borrow OP?

Kirstymc89

NottinghamKnight said:

Finance company option is likely to be expensive, if applying for a bank loan try to do some soft searches to ensure your credit file isn't hammered, loads of searches in a short term indicates you are desperate for money and will either increase rates or make a loan harder to find at all. How big a loan do you need and over how long are you looking to borrow OP?

That’s good to know thanks! Looking to borrow £10,000 over 3/4 years thanks 

WaywardDriver

£10,000 loan @ 3.5% = 48 * £223.
Out of interest (and not very MSE) but have you enquired what deposit you'd need for a new PCP deal with the same monthly payments? Difference may not be as large as you'd think especially when you factor in new car warranty and old car maintenance.

ontheroad1970

WaywardDriver said:

£10,000 loan @ 3.5% = 48 * £223.
Out of interest (and not very MSE) but have you enquired what deposit you'd need for a new PCP deal with the same monthly payments? Difference may not be as large as you'd think especially when you factor in new car warranty and old car maintenance.

However they would end up back in this position again in 3/4 years.  

Grumpy_chap

ontheroad1970 said:

WaywardDriver said:

£10,000 loan @ 3.5% = 48 * £223.
Out of interest (and not very MSE) but have you enquired what deposit you'd need for a new PCP deal with the same monthly payments? Difference may not be as large as you'd think especially when you factor in new car warranty and old car maintenance.

However they would end up back in this position again in 3/4 years.  

Which is exactly what the motor industry want 😉

WaywardDriver

ontheroad1970 said:

WaywardDriver said:

£10,000 loan @ 3.5% = 48 * £223.
Out of interest (and not very MSE) but have you enquired what deposit you'd need for a new PCP deal with the same monthly payments? Difference may not be as large as you'd think especially when you factor in new car warranty and old car maintenance.

However they would end up back in this position again in 3/4 years.  

Yes but they'd have the "luxury" of driving a 1-4 year old car vs a 5-8.
My suggestion was somewhat flippant but simply to point out the cost difference may not be as large as it appears on first sight.  

WaywardDriver

Grumpy_chap said:

ontheroad1970 said:

WaywardDriver said:

£10,000 loan @ 3.5% = 48 * £223.
Out of interest (and not very MSE) but have you enquired what deposit you'd need for a new PCP deal with the same monthly payments? Difference may not be as large as you'd think especially when you factor in new car warranty and old car maintenance.

However they would end up back in this position again in 3/4 years.  

Which is exactly what the motor industry want 😉

Of course but that doesn't mean you shouldn't consider even if only out of interest.

DrEskimo

WaywardDriver said:

ontheroad1970 said:

WaywardDriver said:

£10,000 loan @ 3.5% = 48 * £223.
Out of interest (and not very MSE) but have you enquired what deposit you'd need for a new PCP deal with the same monthly payments? Difference may not be as large as you'd think especially when you factor in new car warranty and old car maintenance.

However they would end up back in this position again in 3/4 years.  

Yes but they'd have the "luxury" of driving a 1-4 year old car vs a 5-8.
My suggestion was somewhat flippant but simply to point out the cost difference may not be as large as it appears on first sight.  

Cost difference is massive.
At the end of the loan they own a car probably still worth around £4-5k. They could sell it after 3/4yrs and be exactly in the same position as the new car PCP (i.e make 3/4yrs of payments and then trade the car in) having spent half as much. 

The extra cost in maintenance is going to be trivial relative to that....