Can PCP work out good value for high mileage?
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I'm starting a new job next month, and as a result my annual mileage will be increasing from 12,000 to closer to 30,000. Because of this I'm looking at changing my car to something slightly newer. I own my current car outright, but am considering a PCP deal for my next car.
Previously I've always assumed PCP offers poor value as you are paying monthly for something you never own. However, when taking into account the "cost" of depreciation on a car, I've recently started to think it may actually be quite a good deal. Particularly with such high mileage, I would see a lot of depreciation on any car I owned outright.
I'm looking at deals around the £250pm mark. E.g. the new Citroen C3, available on a 3 year lease with 30,000 annual miles for £240pm with a 3 month deposit.
Is PCP a good option for me or would I be better off going down a different route? (Suggestions welcome)
Previously I've always assumed PCP offers poor value as you are paying monthly for something you never own. However, when taking into account the "cost" of depreciation on a car, I've recently started to think it may actually be quite a good deal. Particularly with such high mileage, I would see a lot of depreciation on any car I owned outright.
I'm looking at deals around the £250pm mark. E.g. the new Citroen C3, available on a 3 year lease with 30,000 annual miles for £240pm with a 3 month deposit.
Is PCP a good option for me or would I be better off going down a different route? (Suggestions welcome)
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Depends on which C3. You can buy a poverty spec one for £10k RRP, probably nearer £9k from Carwow. You might get £1000 for it after 3 years and 90,000 miles
You will be throwing £9360 into the pcp and have nothing at the end.I want to go back to The Olden Days, when every single thing that I can think of was better.....
(except air quality and Medical Science
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That's the top spec C3 - RRP £147950
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I'm starting a new job next month, and as a result my annual mileage will be increasing from 12,000 to closer to 30,000. Because of this I'm looking at changing my car to something slightly newer.
Why? Looked after, any car built since the early 1990s is easily capable of doing 30k a year and doing over 200,000 miles.Particularly with such high mileage, I would see a lot of depreciation on any car I owned outright.
You've already eaten a big chunk of depreciation on your current car and a year or two of high mileage won't make much difference to its worth. To effectively rent a new car and pay for the depreciation that 30k a year for 3 years on a new car will have makes no financial sense.
Doing 30K a year I'd not want to do it in a C3 or any car that is that size or smaller. I'd be wanting to look at Mondeos, BMW 3 series and the like where you get more cabin space instead of being cramped up behind the steering wheel.0 -
Are you confusing leasing (no option to own) and PCP (option to buy, trade in or hand back).
https://www.moneyadviceservice.org.uk/en/articles/whats-the-best-way-to-finance-buying-a-car0 -
Why? Looked after, any car built since the early 1990s is easily capable of doing 30k a year and doing over 200,000 miles.
You've already eaten a big chunk of depreciation on your current car and a year or two of high mileage won't make much difference to its worth. To effectively rent a new car and pay for the depreciation that 30k a year for 3 years on a new car will have makes no financial sense.
Doing 30K a year I'd not want to do it in a C3 or any car that is that size or smaller. I'd be wanting to look at Mondeos, BMW 3 series and the like where you get more cabin space instead of being cramped up behind the steering wheel.
I take your point about keeping my existing car. I will consider it, although there are a few features my current car lacks that I would ideally like to make my commute more comfortable. Size is personal preference I suppose, but I'm confident the C3 would be plenty big enough for me.Transformers wrote: »Are you confusing leasing (no option to own) and PCP (option to buy, trade in or hand back).
https://www.moneyadviceservice.org.uk/en/articles/whats-the-best-way-to-finance-buying-a-car
No, I'm talking about PCP. I do realise there is the option to buy/trade in at the end, but I'm working on an assumption that buying will be excessively expensive and there will be little to no equity to trade in. That may be pessimistic but seems better than assuming some value at the end.0 -
I take your point about keeping my existing car. I will consider it, although there are a few features my current car lacks that I would ideally like to make my commute more comfortable. Size is personal preference I suppose, but I'm confident the C3 would be plenty big enough for me.
No, I'm talking about PCP. I do realise there is the option to buy/trade in at the end, but I'm working on an assumption that buying will be excessively expensive and there will be little to no equity to trade in. That may be pessimistic but seems better than assuming some value at the end.
It's not about size of the car, but the comfort and support of the seats. I do 20 - 25k a year. My E class is now on 120k, and it's a comfortable motorway mile muncher. Before I started driving in 2013, I'd sat in my wife's old Golf (06 plate) (ironically it was actually mine, having won it in a incentive draw at work) I found it uncomfortable on long journeys because of the lack of lumbar support. i'd get a small amount of discomfort in the lumbar regions on any drive that was over a certain amount.
You are going to be in the car a long time. You're talking about doing 6-800 miles a week in this car. That's a lot of time sat in a car. I've been pondering a new car for a while and I have looked at cars with comfort on a higher mileage PCP and it's over £400 for cars that have a certain amount of creature comforts. I'm not talking about simple toys that you will get on a top spec C3, but things that take the niggle out of a long drive.
I guarantee you will be less comfortable getting out of a C3 than out of a reasonable spec (not poverty spec) Mondeo. For long drives I would be looking at Titanium Spec or an equivalent spec in other makes. Something with comfort - lumbar support, easily adjustable. Buy it say a year or so old with low miles - a decent diesel - HP, not PCP. Since you are paying a higher amount of the depreciation when you get a quote based on higher mileage, your guaranteed value at the end will be lower.
Now this might work both ways. If you can get a really REALLY good deal on a PCP, then your final optional purchase payment might be manageable, but you may have less to put towards a replacement.
One way might be to hire a car that you are thinking about. I know you can do test drives, but I doubt they will be that happy with you taking it on a 100 mile test drive. You are going to be living in that car for a long time find out for real whether you can manage in araa small car. You need to know that you can live with this car for 200+ days a year. Before I started driving I was looking at the DS3. Sensible car for a new driver (albeit 40+ years old) but I didn't know then how many miles I would do. I'm glad now that I didn't.
Remember you have to drive the car 100 miles do a day's work, then drive back. rinse and repeat several times a week. Doing that in an uncomfortable car will get tiresome and will affect your work and home life.0 -
Previously I've always assumed PCP offers poor value as you are paying monthly for something you never own.
(Suggestions welcome)Transformers wrote: »Are you confusing leasing (no option to own) and PCP (option to buy, trade in or hand back).No, I'm talking about PCP. I do realise there is the option to buy/trade in at the end, but I'm working on an assumption that buying will be excessively expensive and there will be little to no equity to trade in. That may be pessimistic but seems better than assuming some value at the end.
To be fair, YOU were the one that looked confused because you clearly started by wrongly writing that using a PCP meant you never owned the car.....
Just saying..... :cool::hello:0 -
Mercdriver wrote: »It's not about size of the car, but the comfort and support of the seats. I do 20 - 25k a year. My E class is now on 120k, and it's a comfortable motorway mile muncher. Before I started driving in 2013, I'd sat in my wife's old Golf (06 plate) (ironically it was actually mine, having won it in a incentive draw at work) I found it uncomfortable on long journeys because of the lack of lumbar support. i'd get a small amount of discomfort in the lumbar regions on any drive that was over a certain amount.
You are going to be in the car a long time. You're talking about doing 6-800 miles a week in this car. That's a lot of time sat in a car. I've been pondering a new car for a while and I have looked at cars with comfort on a higher mileage PCP and it's over £400 for cars that have a certain amount of creature comforts. I'm not talking about simple toys that you will get on a top spec C3, but things that take the niggle out of a long drive.
I guarantee you will be less comfortable getting out of a C3 than out of a reasonable spec (not poverty spec) Mondeo. For long drives I would be looking at Titanium Spec or an equivalent spec in other makes. Something with comfort - lumbar support, easily adjustable. Buy it say a year or so old with low miles - a decent diesel - HP, not PCP. Since you are paying a higher amount of the depreciation when you get a quote based on higher mileage, your guaranteed value at the end will be lower.
Now this might work both ways. If you can get a really REALLY good deal on a PCP, then your final optional purchase payment might be manageable, but you may have less to put towards a replacement.
One way might be to hire a car that you are thinking about. I know you can do test drives, but I doubt they will be that happy with you taking it on a 100 mile test drive. You are going to be living in that car for a long time find out for real whether you can manage in araa small car. You need to know that you can live with this car for 200+ days a year. Before I started driving I was looking at the DS3. Sensible car for a new driver (albeit 40+ years old) but I didn't know then how many miles I would do. I'm glad now that I didn't.
Remember you have to drive the car 100 miles do a day's work, then drive back. rinse and repeat several times a week. Doing that in an uncomfortable car will get tiresome and will affect your work and home life.
Thanks for your help, will certainly give all this some thought. I do a couple of 60 mile journeys a week in my current small hatchback, and have done longer journeys in it, and have always found it comfortable enough. But you're right that it may be different if I'm doing it every day. Think you may have misread my mileage - it's 45 miles each way, not 100 miles each way.0 -
No, I'm talking about PCP. I do realise there is the option to buy/trade in at the end, but I'm working on an assumption that buying will be excessively expensive and there will be little to no equity to trade in. That may be pessimistic but seems better than assuming some value at the end.
If you get a 0% finance deal then you only pay the value of the car. You know up front what your deposit is, your monthly fee and the end balloon payment / GMV. If you buy a car to trade in after 3 years then on PCP the GMV will be pants if you're doing 30,000 miles a year, if you buy on PCP with the intent to keep at the end then the mileage is irrelevant, just need to tweak your deposit to get the monthly payments that you want0 -
With that sort of mileage, no PCP deal is going to beat buying a decent new or low-mileage car outright and sticking a couple of hundred thousand miles on it. Start with a decent car, make sure that you look after it well and you should have few problems.0
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