PCP v Lease

Jvnolan

Evening, thanks all for your contribution thus far. So I wanted to confirm the figures as a few questions were raised above. Below are for the same car - Ford Focus ST Line 125.

PCP - 

£1400 deposit

35 x £230

Balloon £12,496.

1 yr road tax included. 

3 years warranty.

Lease -

£1400 deposit
35 x £231. 

Road tax included
3 year warranty. 

Jvnolan

The cash price for me is £19,521 (discounted for me due to work). The retail on car wow is £25,620. 

Thanks once again. 

motorguy

Jvnolan said:

The cash price for me is £19,521 (discounted for me due to work). The retail on car wow is £25,620. 

Thanks once again. 

Unless you have an absolute desire only to run the car for three years and replace it, as per earlier suggestions i'd be taking the PCP deal (assuming there is a financial incentive to do so) then clearing it with a personal loan.Jvnolan said:

Evening, thanks all for your contribution thus far. So I wanted to confirm the figures as a few questions were raised above. Below are for the same car - Ford Focus ST Line 125.

PCP - 

£1400 deposit

35 x £230

Balloon £12,496.

1 yr road tax included. 

3 years warranty.

Lease -

£1400 deposit
35 x £231. 

Road tax included
3 year warranty. 

I'd be tempted to go down the PCP route.  You've more flexibility with a PCP and at the end of the term you can either trade it in (and take advantage of any equity in the deal), buy it outright with a cheap loan or cash, or hand it back.

Handing back is something i'd be concerned about with leasing (and PCP if you hand it back there), as they can bill you for anything above what they deem as fair wear and tear which can sometimes amount to £££s+

I'd also be tempted to move the PCP deal to a cheap loan as soon as possible.  I know you say for right now you'd find the monthlies of a cheap loan off putting, but you're moving towards ownership.  Tesco would do an £18K loan for £320 a month over 5 years.  At the 3 year point with it you'd probably owe around £7.5K, not £12K.

If you could find another £1250 to put in, and borrowed £16,750 you could get the payments down to under £300 a month.

Grumpy_chap

Jvnolan said:

Ford Focus ST Line 125.

Jvnolan said:

The cash price for me is £19,521 (discounted for me due to work). The retail on car wow is £25,620. 

This is worth checking that the £19.5k is truly the best price available as the starting point.  First online broker I looked at is not far off at £20.5k:

A bit of effort might find a deal that matches or beats the affinity deal you have.

isplumm

I have just leased - cost over 3 years, was about 2k cheaper than using PCP - a lot of the deals I looked at had the lease coming out cheaper.

ontheroad1970

isplumm said:

I have just leased - cost over 3 years, was about 2k cheaper than using PCP - a lot of the deals I looked at had the lease coming out cheaper.

As I would expect them to be, as the upside for the finance provider is no ability to hand it back at the 50% of finance point.  

In the OP's position I would take the PCP as there is the more pronounced ability to keep the car if wanted. Looks to me like the PCP deal is more discounted than the Lease.  There is no carrot in it to be tied in for a definite 3 years - aside from 2 years RFL

motorguy

isplumm said:

I have just leased - cost over 3 years, was about 2k cheaper than using PCP - a lot of the deals I looked at had the lease coming out cheaper.

Thats not whats happening for the O/P though - given the additional discount he can get through his work, the PCP deal works out very similar, with more options.

Jvnolan

Evening all, thanks once again for your contributions. As it stands I agree with much of the above, and the PCP looks the likely option. 

DrEskimo

Jvnolan said:

Evening all, thanks once again for your contributions. As it stands I agree with much of the above, and the PCP looks the likely option. 

Is the discounted price contingent on you getting in on PCP?

If not, a personal loan or cash is a much better option. The PCP is costing you around £2k in interest. You can get a much better rate. Put more upfront and borrow less to get the monthly cost down.

Jvnolan

No I can get the car via cash, or PCP/Lease. I would of course pay cash if I had such finances. However, finances dictate that I need to borrow. A bank loan - your looking at a marginally better rate but the monthly payments are too much for my liking. PCP rate is 5.9, and the monthly payments are where I want them. I can up the initial by a few more thousand - thoughts?