Getting into the PCP Game

motorguy

dipsomaniac said:

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

So why shouldnt people avail of it?

Skoda regularly do 0% finance so if that gets someone in to the car they want whats the problem?  Many other manufacturers do too.  1.9% and 2.9% deals are commonplace also.  With the base rate at practically zero its easy for manufacturers finance divisions to offer these sorts of deals.

motorguy

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. 

And yet they have a guide created for it?

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

motorguy

Ibrahim5 said:

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.

Sorry, but this is incorrect.  Many people see the advantage is rolling up depreciation, warranty and sometimes servicing in to one monthly payment.

Whether you buy a car for cash or on finance, they incur costs.  You cant get away from depreciation and running costs.  Why shouldnt people roll that up in to one (often interest free) monthly payment?

I dont have a car on PCP however i have in the past, and i may do so again in the future.  It works for many people.  It would be wrong to broad brush a prejudiced view on to why so many use it.

BOWFER

Ibrahim5 said:

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.

I've not even read it, but if it states it's for people who "can't afford to buy a car" then it's a pile of cack anyway.

BOWFER

Honestly, drives me mad this.
In a site that's full of people asking what they should do with tens of thousands of pounds they have lying around to invest, people are whinging that PCP "isn't MSE"
Dear oh dear.

Grumpy_chap

BOWFER said:

In a site that's full of people asking what they should do with tens of thousands of pounds they have lying around to invest, people are whinging that PCP "isn't MSE"

Ordinarily, all those people with money lying around, and wanting a new car, would not find any kind of finance to be MSE because the finance has to include interest charges and very few of those people with the money lying around are able to generate income (after taxation) greater than the interest charges.

There is a big distortion in the provision of car finance that includes "incentives" and "zero percent" deals - the marketing form of choice for the car manufacturers is currently usually PCP.  All those "extras" included in the PCP only add to increase the price paid as the "best deal" would be lower otherwise.  Hence, the absurdity for these cases that the MSE outcome is to take the PCP finance, secure the "incentives" and then redeem the finance.  (Even that is questionable for the case where there is "zero percent" interest wrapped into the scheme.)

All this, though, is drifting away from the question asked by the OP, for whom PCP is certainly not as clear cut as the best option.  Sadly, there are some that cannot get past the "PCP is the best thing since sliced bread" answer and will not accept anyone who dares to challenge the supremacy of PCP.  This forum is at its best when information is provided in a less partisan way and providing information to educate and inform such that the OP can then assess the best for their situation.

ratrace

BOWFER said:

Honestly, drives me mad this.
In a site that's full of people asking what they should do with tens of thousands of pounds they have lying around to invest, people are whinging that PCP "isn't MSE"
Dear oh dear.

Did you read the op, he dosent have thousends lying around and even knows that when he comes to hand the car back they wont have the cash to pay the baloon and keep the car. this is thread that the op started and any advice should be to do with what the op is asking, he has been advised accordingly about what he should do form a sensible financial viewpoint as his financial situation at the moment is fairly tight as is most peoples and the moment.

the op has not returned with a reply as of yet so we are in the dark about what he has decided to do.

motorguy

Ibrahim5 said:

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.

So go on then, where does it say that?

motorguy

BOWFER said:

Ibrahim5 said:

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.

I've not even read it, but if it states it's for people who "can't afford to buy a car" then it's a pile of cack anyway.

It doesnt, but that wouldnt suit Ibrahims narrative.

motorguy

Grumpy_chap said:

BOWFER said:

In a site that's full of people asking what they should do with tens of thousands of pounds they have lying around to invest, people are whinging that PCP "isn't MSE"

Ordinarily, all those people with money lying around, and wanting a new car, would not find any kind of finance to be MSE because the finance has to include interest charges and very few of those people with the money lying around are able to generate income (after taxation) greater than the interest charges.

There is a big distortion in the provision of car finance that includes "incentives" and "zero percent" deals - the marketing form of choice for the car manufacturers is currently usually PCP.  All those "extras" included in the PCP only add to increase the price paid as the "best deal" would be lower otherwise.  Hence, the absurdity for these cases that the MSE outcome is to take the PCP finance, secure the "incentives" and then redeem the finance.  (Even that is questionable for the case where there is "zero percent" interest wrapped into the scheme.)

All this, though, is drifting away from the question asked by the OP, for whom PCP is certainly not as clear cut as the best option.  Sadly, there are some that cannot get past the "PCP is the best thing since sliced bread" answer and will not accept anyone who dares to challenge the supremacy of PCP.  This forum is at its best when information is provided in a less partisan way and providing information to educate and inform such that the OP can then assess the best for their situation.

No one is saying that PCP is the best thing since sliced bread.  I can see how and when its useful and where it might work for people or families.  My last five cars, i've bought for cash.  To be honest right now PCP doesnt suit me, but that might change in the future.  Doesnt mean i cant see that they work for others.