PCP but not with the dealer??

Rowbo

We are looking at a van purchase. It’s £39k with a PCP dealer rate of 6%. With the calculations we’ve done with the garage the interest alone comes out at over £5k over 4 years!! 

Do we have any other options other than buying outright? We could do this but would rather have the money accessible in our savings and we like the safety net of being able to hand it back and not paying the balloon payment if the diesel market collapses.
would love to hear some opinions on this.
Thanks!

SaverRate

Not sure if they do it for van purchases but you could try Admiral who offer PCP. 
You could also take out a business/bank loan for the vehicle?

BOWFER

I would guess that APR means it's used?
It seems too high to be a new van APR, but it's in-line with used PCP APR?
Have you checked what the new PCP APR is and see if a new van might actually be better?

Rowbo

This is a new Mercedes van. I’m struggling with paying over £5k in interest. It’s expensive enough without that!

Flight3287462

How much interest are getting on your savings?  Not a lot.

Pay as much cash as you can and take a loan on the balance,

If you are worried about the bottom falling out of the diesel market then don't do it.  Can't see it myself especially for vans and lorries/

Grumpy_chap

Rowbo said:

We are looking at a van purchase. It’s £39k with a PCP dealer rate of 6%. With the calculations we’ve done with the garage the interest alone comes out at over £5k over 4 years!! 

Do we have any other options other than buying outright? We could do this but would rather have the money accessible in our savings and we like the safety net of being able to hand it back and not paying the balloon payment if the diesel market collapses.
would love to hear some opinions on this.
Thanks!

I assume this is a business purchase.  The consumer-led offers may not be available in the same way on a commercial vehicle.

How does the 6% rate offered by the dealer compare with the finance rate from your business banker or other lenders?

Have you considered business lease as an alternative to PCP?

BOWFER

Yeah, looking at the Merc website they are charging 6.1% APR for PCP (or agility as they call it).
Steep.
Ford, by comparison, are doing between 0% and 3.8% depending on which option/deposit you take on a Transit.

Rowbo

It’s not through a business. It’s an active lifestyle choice! 🚴‍♂️🏄‍♀️⛵️

It’s a commercial vehicle so I think I agree that the diesel should be ok. It’s just such a funny time for fuel choices that having the safety net of the balloon payment made us feel better about spending so much money.

The savings aren’t earning much, you are right. But they are in premium bonds so you never know! 🤦‍♀️ And it’s nice to know they are still there if needed. 

Rowbo

BOWFER said:

Yeah, looking at the Merc website they are charging 6.1% APR for PCP (or agility as they call it).
Steep.
Ford, by comparison, are doing between 0% and 3.8% depending on which option/deposit you take on a Transit.

I think if the Ford salesman had been better he might have been able to talk us into a transit because of this. But he was rubbish and we’ve had several bad experiences with Ford over the years so I’m happy not to pick a Ford this time. I would however like their finance! 😁

SaverRate

Have a look at Carwow to see how a new Mercedes compares?

MalMonroe

Not being rude but why is the van so expensive?? You can get decent ones for half that amount. I'm just a bit puzzled. 

If you have some savings though, could you plough half of them into a deposit, which will lower the repayments? Or you could pay half of your savings and lower the term time to 3 years.

You could also have a look at Ford, they seem to have some offers on for 0% at the moment -

https://www.trustford.co.uk/hot-offers/new-van-offers/

I think the  6% rate is pretty normal for a dealer's PCP and it's lower than Admiral, as suggested by Harry, above.

I'm also looking at PCPs as my current rate of 0% for my car comes to an end next month. But generally, I'd have a look around to see what else is available before you commit yourselves. £39k seems a lot for a van. Unless it's got some gold in it it somewhere?

I'd also not buy diesel if possible because they aren't good for the environment, aside from anything else.