Hire purchase or PCP?

jimjames

casperchameleon said:

DrEskimo said:

It’s quite simple when you view them simply as finance products. As with any finance product, you want to minimise the cost of interest. 

So compare the absolute cost in interest between the two. 

I would suggest that keeping and repairing your current car is going to much cheaper when you factor in the finance cost, depreciation cost and potentially any unknown repair bills on the replacement car….

Thank you. The repairs would be about £2000 and unfortunately it’s something that keeps reoccurring, broken suspension and springs etc. I’ve spent a lot of money on repairing electrics that keep on breaking too. 

Springs should not be breaking every year but they are consumable items that will need to be replaced over time and that could happen on any car. In fact it's just as likely on the car you're looking at to have the same issue.
Edit - just seen your update. It's not really something that should happen twice in the space of 6 months, something sounds wrong there.

£2000 sounds a lot of money for repairs so might be worth speaking to another garage to check it's needed. It's not a main dealer you're using is it? 

ontheroad1970

CoastingHatbox said:

Think carefully about taking out a loan to buy a car.

The one benefit of buying a car with a finance agreement is the extra protection section 75 of the Consumer Credit Act gives you in the event you experience problems with the vehicle you purchase.

It seems odd that you are in a situation where the car is costing a lot of money each year to maintain, repeatedly fixing the same issues - are the symptoms of the issues being treated and not the root causes? Unless the car is going rusty, structurally unsound, or being driven on rough terrain or challenging conditions, I would not expect electrical and suspension faults to re-occur if the y are properly fixed in the first place.

It might be worth sharing some more information about the work you have had done to the vehicle and the work it now needs. If it's had new springs and dampers at the front last year, then at this year at the read, I'd understand.

If the car is structurally sound, personally, I'd continue to maintain it. The value of the car is not in it's resale value, but how long it will continue doing car things before experiencing catastrophic failure - and by that I mean becoming structurally unsound due to rust or accident damage.

There are advantages to having a car loan that is not secured against the car.  You can still get s75 protection by paying as little as £1 with a credit card.  

casperchameleon

jimjames said:

casperchameleon said:

DrEskimo said:

It’s quite simple when you view them simply as finance products. As with any finance product, you want to minimise the cost of interest. 

So compare the absolute cost in interest between the two. 

I would suggest that keeping and repairing your current car is going to much cheaper when you factor in the finance cost, depreciation cost and potentially any unknown repair bills on the replacement car….

Thank you. The repairs would be about £2000 and unfortunately it’s something that keeps reoccurring, broken suspension and springs etc. I’ve spent a lot of money on repairing electrics that keep on breaking too. 

Springs should not be breaking every year but they are consumable items that will need to be replaced over time and that could happen on any car. In fact it's just as likely on the car you're looking at to have the same issue.
Edit - just seen your update. It's not really something that should happen twice in the space of 6 months, something sounds wrong there.

£2000 sounds a lot of money for repairs so might be worth speaking to another garage to check it's needed. It's not a main dealer you're using is it? 

Here are the things wrong with it -
3 tyres need replacing 
brake fluid contaminated 
washer pump broken 
suspension broken 
left spring broken 
exhaust pipe cracked 

But now I’ve realised to change my address and car on my insurance it’s an extra £500. So I really am considering just getting it repaired!

macman

What do you mean by 'suspension broken'? Which component? How does this relate to the broken spring, and why has it broken again after 6 months? Who is currently maintaining/repairing the car?
All the other items on your list are consumables or wear and tear and just as likely to recur on a 30k mile replacement vehicle.

User36750

ididgetwhereiamtoday said:

It would be irresponsible to pay interest on a loan when you have money in the bank. 

Unless the savings are for a specific purchase.
We have some savings but looking to take out a loan.  According to this website, I'd be in line to pay about 4.5% - 5% in interest over about 4 years.  That extra £1000 or so isn't so bad if it means I don't have to take so much from the savings, which are being saved for a very specific purpose.

However, if the OP has no specific ideas for their savings, then yes, would be better to use it, or at least 80% of it.

casperchameleon

macman said:

What do you mean by 'suspension broken'? Which component? How does this relate to the broken spring, and why has it broken again after 6 months? Who is currently maintaining/repairing the car?
All the other items on your list are consumables or wear and tear and just as likely to recur on a 30k mile replacement vehicle.

User36750 said:

ididgetwhereiamtoday said:

It would be irresponsible to pay interest on a loan when you have money in the bank. 

Unless the savings are for a specific purchase.
We have some savings but looking to take out a loan.  According to this website, I'd be in line to pay about 4.5% - 5% in interest over about 4 years.  That extra £1000 or so isn't so bad if it means I don't have to take so much from the savings, which are being saved for a very specific purpose.

However, if the OP has no specific ideas for their savings, then yes, would be better to use it, or at least 80% of it.

Near side front track rod end and inner joint broke (apologies I don’t know much about cars and this is what I heard them say on the phone!)

Also
the rear exhaust is cracked (and a noise coming from the exhillary area) and there is an oil leak on the top of the engine

my car is 13 years old and has done 96,000. I would buy with my savings because the lowest interest I can get for a loan is 9.7%. However a new car wipes out at least half of my savings and then if the car breaks…! 

Difficult

TadleyBaggie

So you took out PCP on a 10 year old car? And the balloon payment is over £10K? Must have been a top end model.

casperchameleon

TadleyBaggie said:

So you took out PCP on a 10 year old car? And the balloon payment is over £10K? Must have been a top end model.

Is this for the right post? I haven’t taken out PCP before. 

TadleyBaggie

casperchameleon said:

TadleyBaggie said:

So you took out PCP on a 10 year old car? And the balloon payment is over £10K? Must have been a top end model.

Is this for the right post? I haven’t taken out PCP before. 

Whoops you're right...