Buying a car with finance

Philipp_Bach

Newer been applying for car finance, and now pops the question about deposit. If to apply for finance towards PCP, is deposit refundable if not buying a car at the end of the contract?

Veteransaver

No, it's a non refundable deposit.

DullGreyGuy

Philipp_Bach said:

Newer been applying for car finance, and now pops the question about deposit. If to apply for finance towards PCP, is deposit refundable if not buying a car at the end of the contract?

No, its been used to reduce your monthly payments whilst you "rent" the car

fatbelly

AA do a reasonable job of explaining the different types of car finance

https://www.theaa.com/cars/finance/car-finance-explained

The mse version is here

https://www.moneysavingexpert.com/car-finance/

Keep_pedalling

Have you discounted leasing? 

prowla

The "deposit" is a contribution towards the payments.

Philipp_Bach

I was looking for HP (hire purchase) instead of PCP (lease), the last one falls apart though. And what I found, that interest is incredibly high so far. As an example, BMW X5 '20 comes with HP type of finance at Cinch.
I've put the following parameters into car loan calculator to figure out the prices in-depth:
https://publicalculator.com/car-loan-calculator?cprice=40709&intrate=14.7&months=60&dpay=8000&discount=0&tinvalue=0&tinleft=0&addto=0&regfees=0&taxrate=0

The car comes with the following specs:
- Price: £40709
- Deposit: £8000 I'm able to pay towards the finally mine car
- Interest rate: 14.7% (estimated)
- Monthly payment: £773

An overall interest to paid, buying this way, is £13,671.. Too much, isn't it??

Nearlyold

Just to point out PCP is not a Lease  it's a modified Hire Purchase/Conditional Sale/or Fixed Sum Term Loan.

I'd agree thats a monster amount of interest to pay for a depreciating asset.

Have you got the level of income that will easily cover the cost after factoring in maintenance insurance etc?

Have you tried your bank to see what they'd offer you?

born_again

Philipp_Bach said:

I was looking for HP (hire purchase) instead of PCP (lease), the last one falls apart though. And what I found, that interest is incredibly high so far. As an example, BMW X5 '20 comes with HP type of finance at Cinch.
I've put the following parameters into car loan calculator to figure out the prices in-depth:
https://publicalculator.com/car-loan-calculator?cprice=40709&intrate=14.7&months=60&dpay=8000&discount=0&tinvalue=0&tinleft=0&addto=0&regfees=0&taxrate=0

The car comes with the following specs:
- Price: £40709
- Deposit: £8000 I'm able to pay towards the finally mine car
- Interest rate: 14.7% (estimated)
- Monthly payment: £773

An overall interest to paid, buying this way, is £13,671.. Too much, isn't it??

Is that a 2020 car? If not how old is the car & how long is the finance for?

Quite a few posts where people have bought 2nd hand cars on these finance deals, then had major issues with the cars. 
So end up still paying for a loan & have no car.

Philipp_Bach

born_again said:

Philipp_Bach said:

I was looking for HP (hire purchase) instead of PCP (lease), the last one falls apart though. And what I found, that interest is incredibly high so far. As an example, BMW X5 '20 comes with HP type of finance at Cinch.
I've put the following parameters into car loan calculator to figure out the prices in-depth:
https://publicalculator.com/car-loan-calculator?cprice=40709&intrate=14.7&months=60&dpay=8000&discount=0&tinvalue=0&tinleft=0&addto=0&regfees=0&taxrate=0

The car comes with the following specs:
- Price: £40709
- Deposit: £8000 I'm able to pay towards the finally mine car
- Interest rate: 14.7% (estimated)
- Monthly payment: £773

An overall interest to paid, buying this way, is £13,671.. Too much, isn't it??

Is that a 2020 car? If not how old is the car & how long is the finance for?

Quite a few posts where people have bought 2nd hand cars on these finance deals, then had major issues with the cars. 
So end up still paying for a loan & have no car.

Yes, the car considered has built in 2020 and the finance is for 60 months. So basically, as someone already said, investment in the deprecating thing. A big disadvantage though from servicing costs prospective, but if PCP lease - wasting a money with no financial residual left at the end of the contract. So many people just end up still paying for a loan because they pay less per month. Also, I think electric cars, so dependent from battery condition, owning the 11 years EV vehicle causes massive expenses on battery replacement despite the car itself may still be good. But as with this BMW, it has classic IC engine. So paying HP, and finally owning the car which could cost ~£15K from £40K starting price. Could be more considerable.

Philipp_Bach

Have you tried your bank to see what they'd offer you?

Haven't been looking into my bank finance options. Could be a good idea as well +++