Getting into the PCP Game

[Deleted User]

You will find that Bowfer always has to get the last post in so there’s no point in arguing with said poster. 

Be under no illusions, PCP is NOT MSE. 

BOWFER

Deleted_User said:

You will find that Bowfer always has to get the last post in so there’s no point in arguing with said poster. 

Be under no illusions, PCP is NOT MSE. 

So much bleating in one post.

Herzlos

Proving the point perfectly.

However, PCP can be a pretty cost-efficient way of getting a new car, but a new car is rarely MSE. The MSE way would be to buy something that's taken the brunt of the depreciation already (maybe 2-3 years old)

I don't doubt you can be quids in with a PCP, given the right car and deposit, but the sheer volume of underwater PCP posts on here show's it's not all of them.

Even looking at depreciation:

Cars lose their value fastest from new and it tails off, so without a big deposit or high capital repayments it's unlikely you'll have any equity in the deal and the easiest opportunity to get out without paying is at the VT point (normally about 6 months before the PCP ends).

Grumpy_chap

The important thing to remember is that PCP is simply the means of financing the vehicle.  PCP is nothing more than a loan.

Compared to other loan options for the purchase of a car, PCP achieves lower monthly payments by deferring the value that the car is calculated / expected to have at a specific time further along the line - that time is typically 3 or 4 years.  Because the deferred value is incurring interest charges throughout, the overall payment will be higher than conventional loan / HP finance.  This can sometimes be concealed through clever marketing and trickery such as "zero percent" finance, but that simply means the finance cost has been incorporated into the product price from the outset.

Once the PCP is understood as simply the finance, then the factors around selling the car before the term has ended and repaying the finance become more straightforward.  Given that the highest depreciation is straight after driving out of the garage, selling the vehicle very early on will often not realise sufficient to clear the finance.  At any point in the life of the finance agreement, the settlement figure on a PCP will be higher than a conventional loan because the PCP is not structed to ever clear the balloon payment.

Obviously, the motor industry don't want consumers to understand that PCP is only a loan as the motor industry have a vested interest in the consumer believing they have to return the car after the 3 - 4 year term and then start the cycle again.

ComicGeek

I want to buy a new car. I can afford to buy a new car outright in cash.

I negotiate the best possible discount on the car, I get an additional discount by taking the PCP finance, the finance is 0%. I don't pay it off straightaway, why would I at 0% interest.

At the end of the 3 years, I purchase the car using savings that have increased in value.

How is PCP not the best way in that scenario?

It's fair to say that some if not most of PCP deals are not MSE, but you can't say all.

dipsomaniac

I suspect the interest is built into the price. A bit like no commission on currency trades. Smoke and mirrors

BOWFER

How many times is this going to be debated on here....
Surely anything you spend your money on is open to discussion on MSE, with the discussion then being how one can get it for the best cost.
So if I want to say I'm buying a Hublot watch, I should be free to discuss where it's available cheapest.
It's not 'absolute barebones necessities of life'.com

motorguy

Herzlos said:

Proving the point perfectly.

However, PCP can be a pretty cost-efficient way of getting a new car, but a new car is rarely MSE. The MSE way would be to buy something that's taken the brunt of the depreciation already (maybe 2-3 years old)

I don't doubt you can be quids in with a PCP, given the right car and deposit, but the sheer volume of underwater PCP posts on here show's it's not all of them.

Even looking at depreciation:

Cars lose their value fastest from new and it tails off, so without a big deposit or high capital repayments it's unlikely you'll have any equity in the deal and the easiest opportunity to get out without paying is at the VT point (normally about 6 months before the PCP ends).

I do wish people would stop quoting "MSE" when they clearly dont have a clue what the MSE site is about.  MSE is NOT about eking out a living buying only what you need, its about getting what you want at the best possible price.

As such it is perfectly possible to PCP a car in an MSE way, in fact, they actually have a guide on it.

https://www.moneysavingexpert.com/loans/personal-contract-purchase/

Ibrahim5

It makes it clear that PCP is only for people that can't afford to buy a car. Only for the poor and helps them remain poor.

motorguy

Herzlos said:

Proving the point perfectly.

However, PCP can be a pretty cost-efficient way of getting a new car, but a new car is rarely MSE. The MSE way would be to buy something that's taken the brunt of the depreciation already (maybe 2-3 years old)

I don't doubt you can be quids in with a PCP, given the right car and deposit, but the sheer volume of underwater PCP posts on here show's it's not all of them.

Even looking at depreciation:

Cars lose their value fastest from new and it tails off, so without a big deposit or high capital repayments it's unlikely you'll have any equity in the deal and the easiest opportunity to get out without paying is at the VT point (normally about 6 months before the PCP ends).

"sheer volume" - what, maybe a handful a week, out of hundred of threads and out of millions of PCP deals per year?  

And also, when you do read those threads they usually distill down in to people who "just fancy a change" and cant understand why they're underwater 6 months in to their deal, or really shouldnt have taken out a PCP deal in the first place as it didnt suit their requirements.  And yes, some peoples personal circumstances do change and they may need advice with financial commitments they have made, but that would equally apply with a personal loan, HP deal, or even a cash purchase for that matter.