PCP finance - what's the catch?

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  • Exodi
    Exodi Posts: 2,889 Forumite
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    The cash price is being used as an anchor to convince consumers that they're getting a 'good deal/discount' with the finance option as the majority of customers will not be walking in with £20,000 in their back pocket. Perception of savings has been one of the most successful sales tools out there.
    Know what you don't
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    aphill24 wrote: »
    If you want the car, take the finance offered and pay it off within the first 14 days. You will be getting it at the discounted price. Make sure there is nothing in the contract that penalises you from doing this but as an employee I know lots who do it and there is no catch.
    Personally I buy 2nd hand as the value plummets on new ford cars in the first 3 years. You get much more value buying a 2nd hand Audi from 2 years old in my opinion.


    Its 0% APR. There's no particular rush to do that.
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    SuperHung wrote: »
    The catch is that you are paying for the car depreciation, you lose 20% just by driving your new card out of the showroom.

    Oh F me that old one.....I 100% agree with you if you DID drive it out of the showroom and straight to another showroom to sell it on.....ANYONE in the UK or the World has ever done that?

    Thought not - so statement is BS.
  • iolanthe07
    iolanthe07 Posts: 5,493 Forumite
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    foxy-stoat wrote: »
    Oh F me that old one.....I 100% agree with you if you DID drive it out of the showroom and straight to another showroom to sell it on.....ANYONE in the UK or the World has ever done that?

    Thought not - so statement is BS.

    Absolutely. Of course brand new cars depreciate rapidly, but I would much rather buy a car where I am the first owner for all sorts of reasons, admittedly some not very money saving. The depreciation hits wears off in time.
    I used to think that good grammar is important, but now I know that good wine is importanter.
  • Silvertabby
    Silvertabby Posts: 9,061 Forumite
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    The thing with PCP is that the finance company doesn't expect you to have the balloon payment at the end of your contract, so you either hand in the car and walk away with nothing, or commit to another new car/contract.

    We like PCP because of the dealer's deposit - and we do pay the balloon payment at the end of contract (or before if it isn't an interest free deal) thus leaving us with the upper hand at trade in time.

    Yes, we know that new cars depreciate - but they are a luxury that we both enjoy and can afford.
  • DrEskimo
    DrEskimo Posts: 2,349 Forumite
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    Silvertabby wrote: »
    Yes, we know that new cars depreciate - but they are a luxury that we both enjoy and can afford.

    Hope you don't mind me asking, but what exactly is it about brand new cars that makes you enjoy them more than used cars, and therefore pay more for the privilege of owning them....?

    I had a new car once and I honestly didn't see it being any better than any of the used ones I've bought, or could have bought that were the same model/spec/trim. Side by side, if you covered up the odometer and reg plate I could not tell you which cars were brand new, and which were 1/2yrs old....

    It has brought me to the conclusion that I see absolutely no value in brand new, despite being able to afford it, but I am guessing others see something I don't!
  • Silvertabby
    Silvertabby Posts: 9,061 Forumite
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    edited 16 May 2019 at 9:29PM
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    DrEskimo wrote: »
    Hope you don't mind me asking, but what exactly is it about brand new cars that makes you enjoy them more than used cars, and therefore pay more for the privilege of owning them....?

    I had a new car once and I honestly didn't see it being any better than any of the used ones I've bought, or could have bought that were the same model/spec/trim. Side by side, if you covered up the odometer and reg plate I could not tell you which cars were brand new, and which were 1/2yrs old....

    It has brought me to the conclusion that I see absolutely no value in brand new, despite being able to afford it, but I am guessing others see something I don't!
    Don't mind at all, Dr E. It's because they are NEW and not only do we know the vehicles history, we also know that no-one has smoked or thrown up in it. We don't do flash - our next car will be about £21K.

    Horses for courses. We don't see any value in spending £3K or £4K a year on foreign holidays, which leave you with nothing but a few photographs, sunburn and a dicky tum - but lots of people do.
  • System
    System Posts: 178,101 Community Admin
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    edited 17 May 2019 at 1:29AM
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    DrEskimo wrote: »
    Hope you don't mind me asking, but what exactly is it about brand new cars that makes you enjoy them more than used cars, and therefore pay more for the privilege of owning them....?
    :cool:
    It has brought me to the conclusion that I see absolutely no value in brand new, despite being able to afford it, but I am guessing others see something I don't!

    So you buy everything second hand, clothes, furniture in your house, your TV, the computer you posted this message using, the mobile phone you have? Have you never bought anything new? Have you never bought something new because you really wanted it?

    Personally for me if I was buying a new car it would be to have the new car smell, that new car feeling, something that is fault and damage free not even having the lightest of scratches, sitting in the driver's seat knowing someone elses sweaty ball sack hasn't spent thousands of hours perspiring on it, holding a steering wheel that isn't covered with someone else's mucus, having something that is wholly and entirely mine from the start.

    If you have ever bought anything new that isn't essential for survival then you know the reasons why. If you have plenty of money to afford to without having to resort to credit then why not? After all if nobody buys new cars where do the decently priced nearly new ones come from?
  • DrEskimo
    DrEskimo Posts: 2,349 Forumite
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    Oh I agree, I don't spend thousands on holidays either!

    Well yes my house is second hand. It's a Victorian terrace so I'm guessing quite a few have lived here! Although I did completely gut it and renovate it so that would solve any irrational fear I had of naked, chronic sneezers living there before me....

    I don't buy many of the other things second hand because the cost saving relative to the benefits of brand new (easy to return when faults occur, longer warranty that are very costly to extend, etc.) are not nearly as large, but sure, I've bought ex display TVs, second hand computers (most of the components in my custom PC are from eBay) and phones in the past.

    I don't think there is the same second hand market on those things like there is with cars though. I bought a 2yr old car recently with just 5k miles on it. It still has the new car smell and is completely unmarked. The small price of extending the warranty for an extra year (£289) and the need to disinfect the steering wheel is worth the nearly £5k I saved IMHO...

    I guess I'll be just as perplexed about why people spend the extra thousands as I am about people who spend thousands each year on holidays....!

    As you say i should be thankful for supplying me with good used cars...!
  • engineer_amy
    engineer_amy Posts: 803 Forumite
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    Tarambor wrote: »

    Personally for me if I was buying a new car it would be to have the new car smell, that new car feeling, something that is fault and damage free not even having the lightest of scratches, sitting in the driver's seat knowing someone elses sweaty ball sack hasn't spent thousands of hours perspiring on it, holding a steering wheel that isn't covered with someone else's mucus, having something that is wholly and entirely mine from the start.

    Love it!!! :rotfl:
    never heard it put quite like that before, but that's kinda the same reason im going for brand new
    Mortgage = [STRIKE]£113,495 (May 2009)[/STRIKE] £67462.74 Jun 2019
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