PCP Finance: Low deposit or high deposit, which is the most sensible?

born_again

caprimad said:

daveyjp said:

PCP makes little financial sense.  Buy a 2-3 year old EV, or a newer EV with a few miles and a massive discount.

There's no point in buying a used EV at this time (IMHO - although finally a Jaguar iPace is in-budget!); new EVs are just so much better than your typical 5-10 year old one; and in 3-5 years time, they'll be much better again:

Buying now (new OR used) is, IMHO again, a mug's game.

In 10-15 year's time, when the advances in technology have slowed up a bit (assuming they do) - that'll be the time to buy a keeper.

Are new ones better? That all depends on your needs.
Do you want the latest tech in your car, or simply something to get from A2B?
Remember pre 2022 do not have all the EU nanny state tech regulation gubbins.😜

You strangely miss a massive 2nd hand marketplace 1 to 5 year.

Which is a great area to get bargains. 

DrEskimo

Typhoon2000 said:

If your intention is to pay the ballon and keep the car, then increasing your deposit will cost you less over all. All will increasing the annual mileage allowance (as this will lower the ballon, so higher monthlies and less interest overall).

Doesn't matter if you intend to pay the final balloon payment or not, higher deposit will mean borrowing less money and therefore you will save on the interest for whatever additional money is put down as a deposit.

caprimad said:

daveyjp said:

PCP makes little financial sense.  Buy a 2-3 year old EV, or a newer EV with a few miles and a massive discount.

There's no point in buying a used EV at this time (IMHO - although finally a Jaguar iPace is in-budget!); new EVs are just so much better than your typical 5-10 year old one; and in 3-5 years time, they'll be much better again:

Buying now (new OR used) is, IMHO again, a mug's game.

In 10-15 year's time, when the advances in technology have slowed up a bit (assuming they do) - that'll be the time to buy a keeper.

Not sure I agree, having bought my second used EV.

First was the outgoing Zoe with battery owned 40kWh model. No CCS and by today's standards pretty small battery. Despite this, buying used and selling just under 6-years/35k miles later cost me around £8,000 all in. New Zoe on PCP at the time, used PCP at the time and lease deals would have all been far more expensive, with lease deals running into the £300/month territory at the time, and PCP deals with substantial interest charges.

So cost wise, it was substantially cheaper and I was tied into no contracts on how long or how much I could drive it. Not sure how that's a mug's game?

With my current EV, there's no way I could get the car with the performance, tech and range if restricting myself to new on PCP/lease (Model S Performance). Despite being 5-yrs old it can beat most new EVs so not concerned for the next 5-8yrs I imagine I will own it.

Freecall

ididgetwhereiamtoday said:

You are correct. EVs lifespan will probably be a lot longer than ICE cars. 

prowla said:

I still don't think that EV lifespans are in the same league as ICEs, 

I suspect that the life expectancy of modern cars is not related to their drive train.

The truth is that both EV and ICE power units are extremely reliable and durable.

The problem is that modern cars are not particularly repairable.  Even minor failures of secondary components or damage from accidents can generate costs which result in uneconomic repair.

The finance companies know this (as does the market for second-hand cars) so it is effectively built in to the whole fiscal arrangement for buying cars.

Go for the car you fancy, the system is what it is.

caprimad

Mildly_Miffed said:

caprimad said:

There's no point in buying a used EV at this time (IMHO - although finally a Jaguar iPace is in-budget!); new EVs are just so much better than your typical 5-10 year old one; and in 3-5 years time, they'll be much better again:

Depends on your requirements.

If a 3yo or 5yo or 10yo one meets your needs, then why not save a mahoosive chunk over a new one that massively exceeds them?

Note that this is all my opinion, not necessarily to be confused with facts... but...

Battery technology in particular is, currently (pardon the pun) advancing hugely and at a rapid pace.  Sodium-ion batteries - which are already in production and in some EVs - are likely to become far cheaper than lithium-ion batteries, and they don't suffer the same geopolitical issues that lithium batteries have.  New anode (IIRC) tech is already bringing them on-par with lithium, although that's still at the lab stage.  Solid-state (and semi-solid-state) batteries - with lithium or sodium - are likely to supplant both, in the longer timescale.  In 5-10 years time, if you asked me to bet, I'd say we'll be using solid-state sodium batteries at scale, and thus the replacement cost of a current-tech wet lithium battery will start to rise again (it's still falling at the moment); which will eventually render the current crop of EVs excessively expensive to repair.

There's also still an outside change - tiny, I reckon, but maybe worth hedging your bets - that hydrogen fuel cells might still make a comeback, especially if the existing natural gas infrastructure can be re-used to transport it. Although quite honestly, I wouldn't put money on it - I think it'll need all-new infra, and who's going to pay for that? It's bad enough getting EV infra out there, and electricity is quite literally everywhere...

If I were in the market for a petrol engined car - then I'd totally agree with you: Buy an older one, with low miles, for a big discount; a luxury one in particular with all the executive toys. Having driven an EV for 2 years now, though, I would never voluntarily go back to petrol (and diesel is absolutely out of the question).

caprimad

prowla said:

ididgetwhereiamtoday said:

prowla said:

I've bought cars on PCP and the transaction, payments, and bubble all went to plan.

However, were I to go for an EV (unlikely, as I don't have a place to charge it) I would likely consider a lease arrangement.

I still don't think that EV lifespans are in the same league as ICEs, so leasing absolves you of responsibility for that.

You are correct. EVs lifespan will probably be a lot longer than ICE cars. 

Haha - good game!

What empirical evidence do you have to support that assertion (ie. that "EVs lifespan will probably be a lot longer than ICE cars")?

It's too soon for there to be sufficient empirical evidence to say that with 100% certainty (which, I suspect, is why the poster you're replying to said "probably".

From a mechanical POV - s/he's absolutely correct: There are considerably fewer moving parts on an EV compared to any ICE vehicle (by several orders of magnitude); it doesn't need regular oil changes, you can run it flat out from cold and it's not an issue, there's no gearbox (or if there is, it's an extremely simple one) to jam up or crunch, or wear the brake bands out etc. Mechanically, it's a motor or two (or up to 4), possibly a single-speed reduction gearbox, a differential or two, and that's essentially it.

The big IF with BEVs was always the battery. And yes, very early EVs like the Leaf and the Zoe suffered - just like laptops - with horrendous battery degradation. But that's a thing of the past, with most BEVs made in the last 10 or so years seeing far less degradation than was expected - even by the optimists. Not that it stops the haters from claiming any second hand BEV "will need a new £100,000 battery pack because it'll be knackered".

As for the rest of the electronics, the fancy dashboards, dozens of computers etc - they'll likely be the same as the petrol/diesel counterparts - except that many of them will not be in a hot, oily and electrically noisy environment to shorten their lifespans. The ones that live outside in the mud and salt.... yeah, they'll be just as fragile as anything else.

tl;dr: There's literally no reason NOT to expect a BEV to significantly out-last a petrol/diesel car; and there's no reason to suspect it'll need a new battery pack until long after the bits that fail the same way on ICE cars (bodywork, for example) are sending it to the scrapyard.

caprimad

Typhoon2000 said:

If your intention is to pay the ballon and keep the car, then increasing your deposit will cost you less over all. All will increasing the annual mileage allowance (as this will lower the ballon, so higher monthlies and less interest overall).

I have no intention of keeping the car at the end of the agreement - for the reasons mentioned above. I'm also, thanks to WFH, able to keep the annual mileage way down (Over the last 5 years, I've done less than 4,000 miles a year).

A lease is looking like my best option tbh - it's around £100/month less than the PCP deal with roughly the same up-front deposit, and in the hopefully very unlikely case of it being written off, I won't owe anyone anything (well... as long as it's not my fault obviously!)

So this time, I think I'll do a lease deal. And honestly, the Vauxhall Grandad (sorry, Grandland) I drove today - in brown - looks like the lead contender: And that's not something I ever expected! 

caprimad

DrEskimo said:

caprimad said:

Buying now (new OR used) is, IMHO again, a mug's game.

Not sure I agree, having bought my second used EV.

(Rest of you post snipped just for brevity)

Fair comment. I should, perhaps, be a bit less rude about buyers of s/h EVs....! After all, I likely will be one, one day!

Basically, I reckon in 10 years time - to pluck a random figure out of the air - BEVs will be going further, faster, and with more "geopolitically correct" batteries (no more allegedly child-labour-extracted-cobalt or slave-labour-mined-lithium) which will also be cheaper per kWh and (by then) likely produced using renewable-generated electricity: i.e. all the Guardianista credentials you could shake a stick at.

I'm going to be honest as well: My MG was only the second brand new car I've ever had. The first was an Audi A4 way back in 1999, and that was a terrible experience (it burned LOTS of oil right from new, the gearbox once jammed in reverse whilst I was doing a 3-point turn on a surprisingly busy road, and the battery karked it a week before the lease was up). The MG, on the other hand, spoiled me hugely. And bear in mind, when I bought it in 2023, it was almost impossible to buy a 2nd hand MG4, so new was the only option.  Similarly, looking at the Vauxhall Grandland - the old one was ugly; the new one (of which none are usefully available 2nd hand, i.e. at a decent discount) looks much better. Can't comment on how the old one drives, as I never drove one. The new one is pretty good though.

Honestly, nothing I've driven beats my old 2001 Jag XJR.... but that's sitting, broken, in the driveway... waiting for me to get A Round Tuit. (to fixing it). I'll keep that as my weekend fun car, and take the better EV the rest of the time.

caprimad

DrEskimo said:

With my current EV ... Model S Performance

PS: Great choice! Of all the Teslas, IMHO that's the least ugly one, and predates their attempt to digitise the driving experience to death (indicator buttons on the steering wheel? Really?)

Did you get one with free supercharging for life? IMHO, if I were to buy one (might get one for the wife....) that'd be the one to get.

Ectophile

caprimad said:

Basically, I reckon in 10 years time - to pluck a random figure out of the air - BEVs will be going further, faster, and with more "geopolitically correct" batteries (no more allegedly child-labour-extracted-cobalt or slave-labour-mined-lithium) which will also be cheaper per kWh and (by then) likely produced using renewable-generated electricity: i.e. all the Guardianista credentials you could shake a stick at.

My Renault Zoe uses the Lithium-Nickel-Manganese-Cobalt batteries that require cobalt of dubious origin.  But it's a discontinued model and that type of battery is looking very old-fashioned now.

Many cars are now using Lithium Iron Phosphate batteries.  They have slightly less capacity, but are less flammable, last for many more charge cycles and need no cobalt.  The new "million kilometre" batteries being produced in China are all this type.

Sodium ion batteries are now being produced.  Their capacity isn't great at the moment, so they are only used in cheap cars with short ranges.

Mildly_Miffed

caprimad said:

Mildly_Miffed said:

caprimad said:

There's no point in buying a used EV at this time (IMHO - although finally a Jaguar iPace is in-budget!); new EVs are just so much better than your typical 5-10 year old one; and in 3-5 years time, they'll be much better again:

Depends on your requirements.

If a 3yo or 5yo or 10yo one meets your needs, then why not save a mahoosive chunk over a new one that massively exceeds them?

Note that this is all my opinion, not necessarily to be confused with facts... but...

Battery technology in particular is, currently (pardon the pun) advancing hugely and at a rapid pace.  Sodium-ion batteries - which are already in production and in some EVs - are likely to become far cheaper than lithium-ion batteries, and they don't suffer the same geopolitical issues that lithium batteries have.

Well, that's all lovely - but we're talking about buying a new car versus using a pre-existing one.

Also, don't forget that three-quarters of world production of lithium cells is NOT used for automotive purposes. They're used for everything else rechargeable, from disposable vapes to laptops to drills to vacuums to torches to doorbells to...

There's also still an outside change - tiny, I reckon, but maybe worth hedging your bets - that hydrogen fuel cells might still make a comeback, especially if the existing natural gas infrastructure can be re-used to transport it.

Not to mention the horrible inefficiencies which mean a fuel cell EV uses three times the electricity of a battery one.

The ONLY benefit of hydrogen is that it's quick to refuel. Which is just as well, really, given how that inefficiency means it needs so much more of it. Plus the weight of the pressure vessel, the leak-off when unused, etc etc.