First time PCP car purchase

monkeymatt76

Hi all, just looking for some advise. Before i begin I understand different dealers and different lenders will have different criterias and so there wont be a definitive answer to my question but just looking for other peoples experiences / comments.

My wife an i own a clapped out 14 year old Ford Focus which is very much on its last legs and starting to cost a fortune in repairs. We are looking to use PCP for the first time in order to purchase a nearly new car.

I currently earn £54k a year, my wife doesn't work. We live in rented accomodation and our only debts are a Barclaycard with a little over £100 on it and our mobile phone contracts. Had 2 TSB loans that were both paid off in recent months. No loan applications for years and credit reports look healthiest they have in many a year.

Whenever i use online soft checks at car dealers it always says i've an excellent chance of being eligible for PCP.

My only real issue is an affordability check. My wages are a little over £3100 a month and our total on bills comes to a little over £1000 so we have plenty of disposable income. However my wages are paid into my bank account and then all but a couple of hundred gets transferred into an account in my wifes name, we then use this account for all bills and household shopping and transfer savings from this into another account (i know complicated). We've done this for years. When we first met 13 years ago i had bad credit and we couldn't get a joint account so just opened an account in her name for all our outgoings. 

i would be the applicant and if they carry out an affordability check on my account then they'd clearly see my wages going in to my account but then £2900 of it going out the same day. Would this make the loan look unaffordable as there isn't much in the way of disposable income in my account?

Not sure if any of this makes any sense.

On-the-coast

Many people do what you do with their current accounts including me.  I don’t think it will be a problem.  

It you’re doing PCP (or PCH) it’s sensible to look at new not nearly new - far more competition & manufacturer incentives & much better warranty. 

Ectophile

Beware of finance that exceeds the length of the warranty.  If something drastic goes wrong with the car after the warranty expires, then you'll have to continue paying the finance while also finding the money for expensive repairs.

Consider whether or not you need GAP insurance.

monkeymatt76

On-the-coast said:

Many people do what you do with their current accounts including me.  I don’t think it will be a problem.  

It you’re doing PCP (or PCH) it’s sensible to look at new not nearly new - far more competition & manufacturer incentives & much better warranty. 

Thank you for your response. Its good to know it hopefully shouldn't be a problem with the current accounts and affordability.

As for the car itself, we know the make and model of car we want. We have around £4000 for a deposit and are budgeting around £350 a month for payments, and unfortunately this puts us around £100 a month out of the price range of being able to buy new even with dealer incentives.

monkeymatt76

Ectophile said:

Beware of finance that exceeds the length of the warranty.  If something drastic goes wrong with the car after the warranty expires, then you'll have to continue paying the finance while also finding the money for expensive repairs.

Consider whether or not you need GAP insurance.

Thank you. All important things for me to consider.

born_again

Compare some new cars on PCP, as well as 2nd hand. Especially looking at the total amounts paid.

monkeymatt76

Just following on from my original question. When my now wife an i met in 2011 i was driving a company van (all costs including insurance paid for by company) that i'd had for 3 years and she had a Renault Megane insured in her name. When we moved in together she added me as a named driver on her insurance policy. A year or so later my company decided they weren't giving employees company vehicles anymore and took back the van but increased my wages in compensation. As we were now living together and worked near each other we didn't see a need to get a second vehicle. Since then the insurance policy has always been in her name with me as a named driver.

On looking at a PCP FAQ page one of the question and answers was the below : 

"Can someone else take out a PCP for me?

No. This is called an accommodation deal and finance companies will not allow it.

An accommoation deal is where ‘Person A’ takes out a finance agreement on behalf of ‘Person B’, usually because Person B can’t get finance on their own. Usually, a finance company will insist that the person taking out the loan is the same person who is buying the car, who is also the primary driver on the insurance policy."

Now for the upcoming car purchase and due to the fact my wife no longer works the PCP deal would have to be in my name. Will this be an issue based on the fact that we'd have to get it insured in her name? It would surely make sense to keep the insurance in her name with me as a named driver due to her built up no-claims bonus?