Getting into the PCP Game

Arklight

A fool and their money are soon parted.

motorguy

Arklight said:

A fool and their money are soon parted.

Maybe they're not fools but just have more money than you?

Grumpy_chap

motorguy said:

The point being there is a general intimation that people who use PCP finance on a new car are "schmos" on a "hamster wheel" who simply dont know any better, bless their little cotton socks, and they are doing it because they cant actually afford a car at all, and will have to get back on the hamster wheel at the end of the term, because its either that or bangernomics and they wont be able to impress the neighbours unless they get another new car at the door.

I have certainly not intimated that PCP customers are in any way "schmos" or any other derogatory term.  Sadly, some of them are not fully informed about how the PCP product works - that is primarily the fault of commission-hungry sales representatives.

I do think that most PCP customers are likely to be in another PCP once the term is up - chiefly, at that point in time, another PCP is likely to be the most attractive option.  

motorguy said:

PCP for most people is not a finance plan to purchase a car.  Its a rental plan.  They make the payments for three years then hand the car back or trade it in.  They have no desire to "own" the car from cradle to grave, or for any timeframe.  

For that person, PCP seems less logical than lease.

It still remains the fact that PCP is really just a cleverly marketed 6-year finance plan for a new car.  Any 6 year finance plan for a new car could be stopped at 3 years in and the car sold, the finance repaid and then any other car purchased, or no car.

I am not a fan of PCP, as you will have gathered, but I try to be objective, considered and balanced in my comments.  Some others do not manage to achieve that same balance in their comments.  In fact, it is not PCP, per se, that I am not a fan of - I dislike any monthly outgoing as I like to know that if my work income ceases I can still meet all my obligations and I have a choice on any expenses that come along.  If my car breaks, I have a choice to repair, scrap or delay the expense.  

Regardless, my (now) aged bangernomics Focus does have costs to run and there was recently a thread on a lease deal that was £173 per month all-in including up-front payments (and a lower trim spec that was available for even less).  I did comment in that thread that the deal was attractive and tempting to throw in the Focus and go for it.  In fact, the only reason I did not was that we are still stuck in lockdown, the car remains on SORN, so why pay even a low amount monthly to have a nicer car on the drive?
https://forums.moneysavingexpert.com/discussion/6281243/lease-cheap-deal-skoda-scala-se-l-8000-miles-rfl-included-3-23-broker-fee-total-cost-4149-55/p1

For the individual who wants to see the car as merely a rental plan, this type of lease is lower initial payment and lower per month than a typical PCP.  That makes the PCP look very poor.  Checking today (so that we compare equivelents):

• Skoda Scala 1.0 95 bhp manual SEL
• Skoda PCP Deposit 4 pence (?), £295.17/month, 4 years, 10k miles/year.  TOTAL = £14k over 4 years
• Carwow lease , initial rental £1,673, £164/month, 4 years, 5k miles/year plus 15k miles at 4ppm (£600).  TOTAL = £10k over 4 years

If an individual really wants to just use a car for a period of time, why PCP rather than lease?

motorguy

Grumpy_chap said:

motorguy said:

The point being there is a general intimation that people who use PCP finance on a new car are "schmos" on a "hamster wheel" who simply dont know any better, bless their little cotton socks, and they are doing it because they cant actually afford a car at all, and will have to get back on the hamster wheel at the end of the term, because its either that or bangernomics and they wont be able to impress the neighbours unless they get another new car at the door.

I have certainly not intimated that PCP customers are in any way "schmos" or any other derogatory term.  Sadly, some of them are not fully informed about how the PCP product works - that is primarily the fault of commission-hungry sales representatives.

I do think that most PCP customers are likely to be in another PCP once the term is up - chiefly, at that point in time, another PCP is likely to be the most attractive option.  

motorguy said:

PCP for most people is not a finance plan to purchase a car.  Its a rental plan.  They make the payments for three years then hand the car back or trade it in.  They have no desire to "own" the car from cradle to grave, or for any timeframe.  

For that person, PCP seems less logical than lease.

It still remains the fact that PCP is really just a cleverly marketed 6-year finance plan for a new car.  Any 6 year finance plan for a new car could be stopped at 3 years in and the car sold, the finance repaid and then any other car purchased, or no car.

I am not a fan of PCP, as you will have gathered, but I try to be objective, considered and balanced in my comments.  Some others do not manage to achieve that same balance in their comments.  In fact, it is not PCP, per se, that I am not a fan of - I dislike any monthly outgoing as I like to know that if my work income ceases I can still meet all my obligations and I have a choice on any expenses that come along.  If my car breaks, I have a choice to repair, scrap or delay the expense.  

Regardless, my (now) aged bangernomics Focus does have costs to run and there was recently a thread on a lease deal that was £173 per month all-in including up-front payments (and a lower trim spec that was available for even less).  I did comment in that thread that the deal was attractive and tempting to throw in the Focus and go for it.  In fact, the only reason I did not was that we are still stuck in lockdown, the car remains on SORN, so why pay even a low amount monthly to have a nicer car on the drive?
https://forums.moneysavingexpert.com/discussion/6281243/lease-cheap-deal-skoda-scala-se-l-8000-miles-rfl-included-3-23-broker-fee-total-cost-4149-55/p1

For the individual who wants to see the car as merely a rental plan, this type of lease is lower initial payment and lower per month than a typical PCP.  That makes the PCP look very poor.  Checking today (so that we compare equivelents):

• Skoda Scala 1.0 95 bhp manual SEL
• Skoda PCP Deposit 4 pence (?), £295.17/month, 4 years, 10k miles/year.  TOTAL = £14k over 4 years
• Carwow lease , initial rental £1,673, £164/month, 4 years, 5k miles/year plus 15k miles at 4ppm (£600).  TOTAL = £10k over 4 years

If an individual really wants to just use a car for a period of time, why PCP rather than lease?

Agreed.  I wasnt saying "you" said that, just that there are those comments thrown about by the minority, which whilst their aim is to troll and to goad, clearly shows some underlying personality issues at very least.

Personally, i have no strong view either way on PCP.  I think many use it because its convenient and gives them a set monthly cost they can attribute to their transport expenses.  I'm also a little jumpy about making long term monthly financial commitments as i'm a self employed IT Contractor, so i generally can only see a max of months ahead of myself to the next renewal point.  Historically that has all been fine and there has been an overall reasonable consistency year on year with income but i never like to "assume".  But, i also accept theres many people who are in relatively secure permie jobs and could likely jump in to another permie role quite quickly if needs be.

I do think many people who use PCP could get a lower overall monthly payment if they were to lease.  I just dont think the lease product is that widely sold in the dealer networks, though that is changing, and the best deals tend to be on cars in stock and standard spec.  I think i've seen Vauxhall and Peugeot (?) advertise PCH deals, so they may become more widely used.

BOWFER

motorguy said:

Arklight said:

A fool and their money are soon parted.

Maybe they're not fools but just have more money than you?

I think petty jealousy does come into it a lot on here.

anotheruser

Thank you to the <20 valuable posts on this subject.

Shame some people can't use the Messages to discuss buying villas...

But thank you all the same.

BOWFER

motorguy said:

I do think many people who use PCP could get a lower overall monthly payment if they were to lease.  I just dont think the lease product is that widely sold in the dealer networks, 

You're 100% right, lease can often be much cheaper.
Our Evoque lease deal on 12000 miles is loads cheaper than any dealer was offering PCP for.
Hell, even if the monthly costs were exactly the same lease is still cheaper because the lease company pays the road tax and not 'you'
But people still prefer going to dealers rather than internet only and dealers don't offer PCH/lease.

motorguy

anotheruser said:

Thank you to the <20 valuable posts on this subject.

Shame some people can't use the Messages to discuss buying villas...

But thank you all the same.

Unfortunately PCP is a contentious subject for some, who feel the need to judge people who use the product and make broad brush assumptions about their finances, when in reality it can make a lot of sense for many.

Hopefully you got what you needed, if not do ask, and we'll endeavour to answer

born_again

I bet OP never though a simple question could still be going on 14 pages later. 🤦‍♀️

[Deleted User]

I still think pcp is not advisable for the OP in this scenario.