Best way to finance a car?

DrEskimo

motorguy said:

DrEskimo said:

motorguy said:

McCreary said:

Hi all,

Looking for some different views and opinions about buying cars. I was brought up to save up and buy things outright. My parents always saved up a for second hand car then kept them until they became too expensive to repair.

I started to do this too as and haven’t ever owned a new car. Last year I bought a 1 year old Nissan Qashqui outright using savings. My wife’s car (which we also own) is going to need replacing in a couple of years so we’re in the process of saving for that.

The thing I have been pondering recently is that I only know one of my friends who actually buys cars outright like I do. Everyone else I know has PCPs, hire cars or hire purchases. I don’t have any experience with these and wondered if I am missing a trick? Are these actually better than what I am doing? Everyone I speak to tells me that I should do what they do so I’m looking for a bit of impartial advice if possible?

Thanks in advance!

If you're happy with your car and plan to run it long term, then i'd say stick with what you're doing / have done.  Rinse and repeat when your needs change (though the Qashqai is a very capable all rounder) or the car reaches end of life.

People who PCP tend to do so because its an easy way to wrap up their monthly motoring costs (depreciation, warranty and sometimes servicing) in one monthly amount.  They get paid monthly and they're not terribly concerned about ownership.  As peoples needs change - say with a growing family - then they havent a big commitment to the car so can change at the end of / near the end of the term for something that suits better at that point.

Is it more expensive?  Pretty much certainly, though very low interest rates through incentivised new car deals can offset that.

My impartial advice is stick to what you know works for you and continue to do what you're doing. 

I would argue that owning a car ouright and not having a car on finance or through a lease deal is the most flexible way to run a car if you feel you have to change often.

You don't have to worry about availability of capital to settle outstanding finance, as you've ensured you've covered that upfront, and you don't have to worry about mileage limits or early termination fees on leasing.

With a car bought outright (usually settled finance after securing the best deal) you can chop and change whenever you like. 

Relative to making a commitment to one car, and running it for say 15 years, with a PCP or leasing deal you're not tied in to a particularly long timeframe.  That was the point i was making.  £250 a month this time for a Golf, then maybe a Tiguan etc as time progresses.  That would be fairly typical for say a couple with a young family over time as needs change.  

Its one of the reasons PCP / leasing suits so many - no long term commitment and just set your budget and chose the vehicle type you want for that timeframe.

You will note i also said at the end of the term / approaching the end of term so there would be no requirement to settle outstanding finance - either return it (likely not such a good idea in the present climate) or trade it in.  No need to clear the finance to do either of those.

What's to say if you buy a car outright you have to run it for 15years??

Buy a new/used car, trade it in 2-days, 2-weeks, 2-years or 20-years later. Whenever you want.

Buying the new car on PCP, settling the finance and then trading the car in after 3-yrs would be exactly the same process as running the PCP and paying for it monthly. Only difference is one you pay interest (assuming not 0% APR) and the other one you don't.

Buying is more flexible or the same as PCP.

motorguy

DrEskimo said:

motorguy said:

DrEskimo said:

motorguy said:

McCreary said:

Hi all,

Looking for some different views and opinions about buying cars. I was brought up to save up and buy things outright. My parents always saved up a for second hand car then kept them until they became too expensive to repair.

I started to do this too as and haven’t ever owned a new car. Last year I bought a 1 year old Nissan Qashqui outright using savings. My wife’s car (which we also own) is going to need replacing in a couple of years so we’re in the process of saving for that.

The thing I have been pondering recently is that I only know one of my friends who actually buys cars outright like I do. Everyone else I know has PCPs, hire cars or hire purchases. I don’t have any experience with these and wondered if I am missing a trick? Are these actually better than what I am doing? Everyone I speak to tells me that I should do what they do so I’m looking for a bit of impartial advice if possible?

Thanks in advance!

If you're happy with your car and plan to run it long term, then i'd say stick with what you're doing / have done.  Rinse and repeat when your needs change (though the Qashqai is a very capable all rounder) or the car reaches end of life.

People who PCP tend to do so because its an easy way to wrap up their monthly motoring costs (depreciation, warranty and sometimes servicing) in one monthly amount.  They get paid monthly and they're not terribly concerned about ownership.  As peoples needs change - say with a growing family - then they havent a big commitment to the car so can change at the end of / near the end of the term for something that suits better at that point.

Is it more expensive?  Pretty much certainly, though very low interest rates through incentivised new car deals can offset that.

My impartial advice is stick to what you know works for you and continue to do what you're doing. 

I would argue that owning a car ouright and not having a car on finance or through a lease deal is the most flexible way to run a car if you feel you have to change often.

You don't have to worry about availability of capital to settle outstanding finance, as you've ensured you've covered that upfront, and you don't have to worry about mileage limits or early termination fees on leasing.

With a car bought outright (usually settled finance after securing the best deal) you can chop and change whenever you like. 

Relative to making a commitment to one car, and running it for say 15 years, with a PCP or leasing deal you're not tied in to a particularly long timeframe.  That was the point i was making.  £250 a month this time for a Golf, then maybe a Tiguan etc as time progresses.  That would be fairly typical for say a couple with a young family over time as needs change.  

Its one of the reasons PCP / leasing suits so many - no long term commitment and just set your budget and chose the vehicle type you want for that timeframe.

You will note i also said at the end of the term / approaching the end of term so there would be no requirement to settle outstanding finance - either return it (likely not such a good idea in the present climate) or trade it in.  No need to clear the finance to do either of those.

What's to say if you buy a car outright you have to run it for 15years??

Buy a new/used car, trade it in 2-days, 2-weeks, 2-years or 20-years later. Whenever you want.

Buying the new car on PCP, settling the finance and then trading the car in after 3-yrs would be exactly the same process as running the PCP and paying for it monthly. Only difference is one you pay interest (assuming not 0% APR) and the other one you don't.

Buying is more flexible or the same as PCP.

Again being taken out of context.....

The O/P said "I was brought up to save up and buy things outright. My parents always saved up a for second hand car then kept them until they became too expensive to repair.  I started to do this too as and haven’t ever owned a new car. Last year I bought a 1 year old Nissan Qashqui outright using savings."

That was the context in which i was talking about long term ownership, which the O/P does.

I would then direct you to my first post - which for some reason one or two have chosen to selectively quote from and take out of context - i can only assume because they like an argument on the internet, where i said the following to the O/P -

"If you're happy with your car and plan to run it long term, then i'd say stick with what you're doing / have done.  Rinse and repeat when your needs change (though the Qashqai is a very capable all rounder) or the car reaches end of life.

People who PCP tend to do so because its an easy way to wrap up their monthly motoring costs (depreciation, warranty and sometimes servicing) in one monthly amount.  They get paid monthly and they're not terribly concerned about ownership.  As peoples needs change - say with a growing family - then they havent a big commitment to the car so can change at the end of / near the end of the term for something that suits better at that point.

Is it more expensive?  Pretty much certainly, though very low interest rates through incentivised new car deals can offset that.

My impartial advice is stick to what you know works for you and continue to do what you're doing.  "

motorguy

DrEskimo said:

motorguy said:

DrEskimo said:

motorguy said:

McCreary said:

Hi all,

Looking for some different views and opinions about buying cars. I was brought up to save up and buy things outright. My parents always saved up a for second hand car then kept them until they became too expensive to repair.

I started to do this too as and haven’t ever owned a new car. Last year I bought a 1 year old Nissan Qashqui outright using savings. My wife’s car (which we also own) is going to need replacing in a couple of years so we’re in the process of saving for that.

The thing I have been pondering recently is that I only know one of my friends who actually buys cars outright like I do. Everyone else I know has PCPs, hire cars or hire purchases. I don’t have any experience with these and wondered if I am missing a trick? Are these actually better than what I am doing? Everyone I speak to tells me that I should do what they do so I’m looking for a bit of impartial advice if possible?

Thanks in advance!

If you're happy with your car and plan to run it long term, then i'd say stick with what you're doing / have done.  Rinse and repeat when your needs change (though the Qashqai is a very capable all rounder) or the car reaches end of life.

People who PCP tend to do so because its an easy way to wrap up their monthly motoring costs (depreciation, warranty and sometimes servicing) in one monthly amount.  They get paid monthly and they're not terribly concerned about ownership.  As peoples needs change - say with a growing family - then they havent a big commitment to the car so can change at the end of / near the end of the term for something that suits better at that point.

Is it more expensive?  Pretty much certainly, though very low interest rates through incentivised new car deals can offset that.

My impartial advice is stick to what you know works for you and continue to do what you're doing. 

I would argue that owning a car ouright and not having a car on finance or through a lease deal is the most flexible way to run a car if you feel you have to change often.

You don't have to worry about availability of capital to settle outstanding finance, as you've ensured you've covered that upfront, and you don't have to worry about mileage limits or early termination fees on leasing.

With a car bought outright (usually settled finance after securing the best deal) you can chop and change whenever you like. 

Relative to making a commitment to one car, and running it for say 15 years, with a PCP or leasing deal you're not tied in to a particularly long timeframe.  That was the point i was making.  £250 a month this time for a Golf, then maybe a Tiguan etc as time progresses.  That would be fairly typical for say a couple with a young family over time as needs change.  

Its one of the reasons PCP / leasing suits so many - no long term commitment and just set your budget and chose the vehicle type you want for that timeframe.

You will note i also said at the end of the term / approaching the end of term so there would be no requirement to settle outstanding finance - either return it (likely not such a good idea in the present climate) or trade it in.  No need to clear the finance to do either of those.

What's to say if you buy a car outright you have to run it for 15years??

Buy a new/used car, trade it in 2-days, 2-weeks, 2-years or 20-years later. Whenever you want.

Buying the new car on PCP, settling the finance and then trading the car in after 3-yrs would be exactly the same process as running the PCP and paying for it monthly. Only difference is one you pay interest (assuming not 0% APR) and the other one you don't.

Buying is more flexible or the same as PCP.

I never said otherwise.  I gave examples of WHY PCPing suits "some" people and what benefits those people percieve they are getting, not why the O/P MUST use the product or advantages it would offer the O/P over what they're doing.  I also said PCPing was more expensive, but it does suit a lot of people for various reasons.

Grumpy_chap

ontheroad1970 said:

Advocado said:

I don't know much about PCP, but surely there's a term?  36 months is the norm I believe?  I would consider that to be a long term commitment.

You can't change the car monthly as you suggest.  To do that you'd need to rent a car from Hertz or similar.

However, owning a car outright is much more flexible than PCP, you can change it every week if you want to...

Ouch! All that depreciation and hassle.  

The depreciation is there whether you buy a car outright, on PCP, HP, or any other form of funding.

The only way to avoid the depreciation is to either buy used or keep for longer, or both.

I really don't understand why you think owning outright is more hassle than PCP either.

ontheroad1970

Grumpy_chap said:

ontheroad1970 said:

Advocado said:

I don't know much about PCP, but surely there's a term?  36 months is the norm I believe?  I would consider that to be a long term commitment.

You can't change the car monthly as you suggest.  To do that you'd need to rent a car from Hertz or similar.

However, owning a car outright is much more flexible than PCP, you can change it every week if you want to...

Ouch! All that depreciation and hassle.  

The depreciation is there whether you buy a car outright, on PCP, HP, or any other form of funding.

The only way to avoid the depreciation is to either buy used or keep for longer, or both.

I really don't understand why you think owning outright is more hassle than PCP either.

You get more of it if you change your car weekly, that was my point.

Grumpy_chap

ontheroad1970 said:

You get more of it if you change your car weekly, that was my point.

OK - I don't think the suggestions to change car weekly are meant to be taken literally.  They were not my suggestions though, so I could be wrong.

DrEskimo

motorguy said:

DrEskimo said:

motorguy said:

DrEskimo said:

motorguy said:

McCreary said:

Hi all,

Looking for some different views and opinions about buying cars. I was brought up to save up and buy things outright. My parents always saved up a for second hand car then kept them until they became too expensive to repair.

I started to do this too as and haven’t ever owned a new car. Last year I bought a 1 year old Nissan Qashqui outright using savings. My wife’s car (which we also own) is going to need replacing in a couple of years so we’re in the process of saving for that.

The thing I have been pondering recently is that I only know one of my friends who actually buys cars outright like I do. Everyone else I know has PCPs, hire cars or hire purchases. I don’t have any experience with these and wondered if I am missing a trick? Are these actually better than what I am doing? Everyone I speak to tells me that I should do what they do so I’m looking for a bit of impartial advice if possible?

Thanks in advance!

If you're happy with your car and plan to run it long term, then i'd say stick with what you're doing / have done.  Rinse and repeat when your needs change (though the Qashqai is a very capable all rounder) or the car reaches end of life.

People who PCP tend to do so because its an easy way to wrap up their monthly motoring costs (depreciation, warranty and sometimes servicing) in one monthly amount.  They get paid monthly and they're not terribly concerned about ownership.  As peoples needs change - say with a growing family - then they havent a big commitment to the car so can change at the end of / near the end of the term for something that suits better at that point.

Is it more expensive?  Pretty much certainly, though very low interest rates through incentivised new car deals can offset that.

My impartial advice is stick to what you know works for you and continue to do what you're doing. 

I would argue that owning a car ouright and not having a car on finance or through a lease deal is the most flexible way to run a car if you feel you have to change often.

You don't have to worry about availability of capital to settle outstanding finance, as you've ensured you've covered that upfront, and you don't have to worry about mileage limits or early termination fees on leasing.

With a car bought outright (usually settled finance after securing the best deal) you can chop and change whenever you like. 

Relative to making a commitment to one car, and running it for say 15 years, with a PCP or leasing deal you're not tied in to a particularly long timeframe.  That was the point i was making.  £250 a month this time for a Golf, then maybe a Tiguan etc as time progresses.  That would be fairly typical for say a couple with a young family over time as needs change.  

Its one of the reasons PCP / leasing suits so many - no long term commitment and just set your budget and chose the vehicle type you want for that timeframe.

You will note i also said at the end of the term / approaching the end of term so there would be no requirement to settle outstanding finance - either return it (likely not such a good idea in the present climate) or trade it in.  No need to clear the finance to do either of those.

What's to say if you buy a car outright you have to run it for 15years??

Buy a new/used car, trade it in 2-days, 2-weeks, 2-years or 20-years later. Whenever you want.

Buying the new car on PCP, settling the finance and then trading the car in after 3-yrs would be exactly the same process as running the PCP and paying for it monthly. Only difference is one you pay interest (assuming not 0% APR) and the other one you don't.

Buying is more flexible or the same as PCP.

I never said otherwise.  I gave examples of WHY PCPing suits "some" people and what benefits those people percieve they are getting, not why the O/P MUST use the product or advantages it would offer the O/P over what they're doing.  I also said PCPing was more expensive, but it does suit a lot of people for various reasons.

Oh yea, I agree it's a certainly a persistent perception. But it's such a nonsense one. How can signing up to contract be more flexible than not being under any contractual agreement....

scrappy_returns

Hp is the way to "get" a car if you can't afford to purchase it outright. If you can afford all the payments it's not a problem. Yes it's a debt but by no means is debt a bad thing.

Petriix

Grumpy_chap said:

ontheroad1970 said:

Advocado said:

I don't know much about PCP, but surely there's a term?  36 months is the norm I believe?  I would consider that to be a long term commitment.

You can't change the car monthly as you suggest.  To do that you'd need to rent a car from Hertz or similar.

However, owning a car outright is much more flexible than PCP, you can change it every week if you want to...

Ouch! All that depreciation and hassle.  

The depreciation is there whether you buy a car outright, on PCP, HP, or any other form of funding.

The only way to avoid the depreciation is to either buy used or keep for longer, or both.

I really don't understand why you think owning outright is more hassle than PCP either.

Actually depreciation isn't in any way guaranteed. Second hand prices are really high right now and I've seen some examples of people selling 12 month old cars for similar or more than they paid new. The anomalies seem to be caused by heavy discounting in certain new cars and limited supply in the second hand market. 

little_green

Following this thread as have similar questions to op and likewise most people I speak to seem to think Pcp is a godsend