PCP isn't MSE

dipsomaniac

BOWFER said:

dipsomaniac said:

BOWFER said:

dipsomaniac said:

Wonder what the stats are for new cars going back to the garage for repairs in the first year? Saw a new roller being hoisted onto breakdown truck recently. Also my neighbour was without his brand new Merc for 6 weeks while they tried to fix the daytime running lights

You don't know the Rolls was broken, could have been getting repossesed (!) or just transported to the dealer because the owner is a lazy git
And letting a garage keep your car for 6 weeks for broken DRLs is just stupid, just use it until the new lights are received.
DRLs aren't even an MOT failure.

haha. yes hadn't thought that the roller was being repossesed on the side of the M5. what has MOT failure got to do with it? you spend £50k on a car and you want daytime lights to work

Like I said, it's a bit silly to do without your car for 6 weeks because of faulty DRLs, they're not vital to the car by any means.
I'm assuming Merc gave him a loan car though, which is an advantage to going new.

yep. didn't look at it like that.  they didn't have any choice. having a loan car while you new car is being fixed is saving you wear and tear. everyone with a new car would be better off if their new car was faulty

Grumpy_chap

dipsomaniac said:

Can i just just say that cars are not my life.  i am more than happy driving a £200 car. imo grumpy chap, bowfer and motorguy are trying far too hard to justify their cause

It would appear as though you have not paid attention if you are lumping me with @motorguy and @BOWFER behind PCP.
  
I am all for people having a nice car if they can comfortably afford it, but I do not see PCP as a good financial option for many (short-term incentives and quick paydown excepted).  In general, my opinion is that if you need finance to afford a car then you cannot afford that car.

I can afford my cars (2007 Focus and 1997 Fiesta) but cannot afford the E-Type, McLaren or the Rolls as neither came with a suitable finance product for my budget 

As a reminder, here are some of my earlier comments in this thread (to which @motorguy has definitely taken umbrage):

Grumpy_chap said:

dipsomaniac said:

 I just don't think PCP is MSE. 

Nor do I.
BUT I do agree with the posters that say that the forum is not about "never spending money" but is about achieving what you want in a financially astute manner.
In that regard, there are some who could argue that PCP is very MSE as it allows you to get the use of, say, an A4 for the monthly payment as traditional finance for, say, a Focus.  I don't agree that this is a good argument, but it works if monthlies is the primary consideration.  Whether monthlies should be the primary consideration is another matter entirely.

Grumpy_chap said:

I agree with Fred on this one.

The real problem with PCP is that it is marketed and people enter the agreements focusing solely on the monthly payments.
The balloon payment is often glossed-over, in part because the concept is marketed that the balloon payment is never paid.  That does mean that the consumer is carrying, and incurring interest on, a large debt in perpetuity.  That definitely is not MSE.
The other part of PCP that gets overlooked is the deposit.  To overlook that is even more strange as it is actually paid and can be a large amount - sometimes even as much as another whole year's worth of monthly payments.  Maybe individuals are persuaded to pretend that is not "real money" because the deposit is met from the trade in on the old car before taking out the first PCP.  As money does not leave the bank, it is easy to pretend it is free.  The upshot is, though, paying in total 4 years' monthly for three years use of the car.

Maybe, if it was only PCP that was structured like this, things would not be so bad.  Unfortunately, I suspect that many of the people opting for PCP by only looking at the monthly payments have the same mind-set for everything else so mobile phone, car insurance, TV package, computer software, etc., etc. are all just "monthly payments".  The result is a finely balanced system whereby every pound of salary is accounted for on payday and there is nothing left for any savings or unforeseen events.  Unless the individual starts from the point of having a substantial emergency reserve fund, which I doubt many do, any event or change to the equation creates havoc.

I am starting to get dizzy now as I have been following a stream of luxury, performance, and classic cars around the pub garden.

dipsomaniac

Sorry if I have done you a disservice grumpy_chap I might have been mistaken lumping you with motorguy and bowfer.  Still trying to get someone to explain how buying a new car, keeping it for 3 years and then rinsing and repeating is MSe

thegentleway

I think it’s safe to say MSE means different things to different people.

Grumpy_chap

dipsomaniac said:

Still trying to get someone to explain how buying a new car, keeping it for 3 years and then rinsing and repeating is MSe

That is a different question to the thread title "PCP isn't MSE" and your OP:

dipsomaniac said:

The more I read this forum I don't  see how paying monthly for new cars is ever saving money. It's the lazy option, not MSE?????

It is not MSE to have a new car every few years if you cannot afford it, resulting in financial strains elsewhere, though I fear there are more than would like to admit that take the new car despite being unable to afford it

However, being MSE is not about not having those things that you want / need and can afford.
So, if someone wants and can afford a new car every few years, that is their choice. 

If you are going to have a new car every few years, then I agree with the rationale that PCP is not MSE because it means carrying a large credit balance (balloon payment) and incurring the interest for the full term.  That is my answer based solely on normal finance rules - marketing and "interest free" credit can distort that.

There are some who structure their finance so that everything is monthly payments and treat a car as a service / consumable item.  I am not aligned with this way of thinking, and it can create a risk in that if income goes there may be insufficient resilience to ride the bumpy road.  However, if monthly is how you flow, then it could be argued that PCP is a sound choice as it allows a £30k A4 for the same monthly as a £15k Focus - though the deposit seems to get overlooked in that type of comparison.

Finally, and I think is most definitely MSE, even though it is not quite PCP and not available to all - there was a thread a few days back where someone could get a £70k car through work fleet scheme for £300 per month.  Even if they had the money upfront and kept the car until the residual value was £NIL, the car would need to last 19 years to get the same monthly equivalent.  On those types of figures, why wouldn't you get the monthly deal?

motorguy

Grumpy_chap said:

However, being MSE is not about not having those things that you want / need and can afford.
So, if someone wants and can afford a new car every few years, that is their choice. 

Is the right answer.

But Dipso will never accept that.

68ComebackSpecial

dipsomaniac said:

Sorry if I have done you a disservice grumpy_chap I might have been mistaken lumping you with motorguy and bowfer.  Still trying to get someone to explain how buying a new car, keeping it for 3 years and then rinsing and repeating is MSe

Because some people want to own a new/ sub 3 year old "prestige" vehicle and can't afford to buy them through any other means. It might not be what you, I and countless other members aspire to but for some people their preferred lifestyle is all about looking "successful" to their friends/ family/ neighbours and this means having a new car, wearing labelled clothing etc. MSE can help them to achieve the best PCP deal to buy the car they want and maybe, if they hang around long enough, they might change their mindset and realise that there are other, less financially wasteful, ways of living a good life.

Herzlos

dipsomaniac said:

buying a new car every 3 years from new is what this thread is all about and is NOT MSE.  motorguy, bowfer, grumpy_chap why are you trying to muddy the waters?

The thread is literally titled "PCP isn't MSE", stop moving the goal posts.

I certainly don't agree that a new car every 3 years is a cost effective way to run a car, given they you're always taking the worst of the depreciation curve. It is, however, a pretty low risk approach because the car is always in warranty and probably not doing enough miles for things to wear out. Couple that with a fixed monthly payment and it's actually a fairly attractive package for those who care nothing for cars but want something consistent and low hassle. In the 3 years of ownership it'll probably just need 3 services and wiper fluid.

motorguy

thegentleway said:

I think it’s safe to say MSE means different things to different people.

"Money Saving" means different things to different people, however MSE has a very specific ethos - which is to help you get what you want at the best price.  You only have to look at their tagline - "The average person in the UK can give themselves the equivalent of a 25% pay rise by being an active, savvy consumer and shifting to the very best deals. "

https://www.moneysavingexpert.com/site/about-the-site/#:~:text=The site's dedicated to cutting,and campaigning for financial justice.

It doesnt say "The average person in the UK must buy the cheapest viable option possible at every opportunity", nor does it say "The average person in the UK should deprive themselves of the things they want and only get what they need".

dipsomaniac

Herzlos said:

dipsomaniac said:

buying a new car every 3 years from new is what this thread is all about and is NOT MSE.  motorguy, bowfer, grumpy_chap why are you trying to muddy the waters?

The thread is literally titled "PCP isn't MSE", stop moving the goal posts.

I certainly don't agree that a new car every 3 years is a cost effective way to run a car, given they you're always taking the worst of the depreciation curve. It is, however, a pretty low risk approach because the car is always in warranty and probably not doing enough miles for things to wear out. Couple that with a fixed monthly payment and it's actually a fairly attractive package for those who care nothing for cars but want something consistent and low hassle. In the 3 years of ownership it'll probably just need 3 services and wiper fluid.

I have never taken out a PCP but isn't it about paying for a new car, keeping it for 3 years, then rinsing and repeating? If so, how am I moving the goal posts?