Buying pcp car

ontheroad1970

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.  

Difference being that once the loan is repaid, the OP has an asset (albeit depreciating) in their position.  And if the average of scrappage is reflected in their vehicle they will have ownership for at least two 6 more years.

WaywardDriver

Assuming the loan and new PCP payments cancel out; the extra costs for a new car might be £3,000 (deposit) plus another £3,000 deposit for next PCP car in 4 years time; for keeping current car £1,500 (warranty/maintenance/breakdown service/new tyres if still on originals). So a difference of £4,500 - actual difference will depend on the car and deal available.
I wasn't recommending going for a new car but simply to cost the options as I've done for every car I've bought.

ontheroad1970

WaywardDriver said:

Assuming the loan and new PCP payments cancel out; the extra costs for a new car might be £3,000 (deposit) plus another £3,000 deposit for next PCP car in 4 years time; for keeping current car £1,500 (warranty/maintenance/breakdown service/new tyres if still on originals). So a difference of £4,500 - actual difference will depend on the car and deal available.
I wasn't recommending going for a new car but simply to cost the options as I've done for every car I've bought.

There is a rather large elephant in the room.  Car shaped.  The scenario you have has them never actually owning the car.  In those circumstances, leases would be cheaper.