PCP vs Hire Purchase vs loan

fishy3

Have just found a car I love... a 6month old audi A3...so now comes the problem of finance!
I am unsure of the advantages and disadvantages of each. The dealer seems to think the pcp is the way forward,and i see that on a monthly spend it can be a plus. But overall it seems a very expensive method... it costs around 24k over 3 years on a 19.5k car.
hire purchase i dont really understand...
Loans seem another minefield. The dealers rate is horrid, but has the advantage that if you want to pay it off earlier than the end of the term you only pay one month interest as a penalty,where as personal loans seem to have much bigger fines. The other concern with personal loans is that i dont know if it is possible to actually get the advertised rates... has anyone got any advise or experience with this?

I really need to work all this out asap... i dont want to loose the deal!

Thanks for any help you can give

Stevenj214

or you could lease it for 3 years for £8244 http://www.autochoices.co.uk/automan/listings/l0005.php

gizmoleeds

Hire purchase is just a fancy name for paying by monthly installments. With PCP at the end of the deal you have the option to either buy the car (for a pre-determined price), or give it back. If you do get PCP then make sure your mileage estimate is accurate as there are severe penalties for going over, and some unscrupulous dealers may encourage you to under-estimate to keep the cost down.

With the PCP you have described you would have spend £24 over the three years but be left with a car woth aprox. 12k (by my estimations) - ie. a £12k net payment. That is not IMO a good deal in comparison to the lease Stevenj214 suggested.

That would be the equivalent of £9,160 over 3 years (it is an 18 month lease so I presume you would get a similar deal in 18 months time, and have factored in two initial payments (the first payment on a lease is usually three times a normal payment)). With a lease you would also have got to cange the car after 18 months and have the knowledge that if anything goes wrong it is not your problem.

I really need to work all this out asap... i dont want to loose the deal!

The dealer wants you to think this - believe me, whatever "deal" he offered will still be available in a month's time (and if I were you I wouldn't take it - it's just not good moneysaving).

gizmoleeds

Just to add- as I was in a rush to go watch Waking the Dead when I wrote my last post, that I do realise that at £19k the A3 you were looking at wil probably be a better model than the one offered here on a lease. However, you can probably get a lease on a new model of the one you want for a similar price to the PCP you have been offered - and there are many benefits to a lease (although if you plan to keep the car after the 3 years then PCP might be better).