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    • Mrjuls33
    • By Mrjuls33 13th Sep 18, 8:53 PM
    • 11Posts
    • 7Thanks
    Mrjuls33
    Thoughts on PCP
    • #1
    • 13th Sep 18, 8:53 PM
    Thoughts on PCP 13th Sep 18 at 8:53 PM
    Just wondering what everyones thoughts are on PCP car finace as seems so popular lately is it worth doing or should it be avoided at all costs?
Page 1
    • poppy10
    • By poppy10 13th Sep 18, 9:04 PM
    • 6,034 Posts
    • 7,297 Thanks
    poppy10
    • #2
    • 13th Sep 18, 9:04 PM
    • #2
    • 13th Sep 18, 9:04 PM
    You might get a better response on the Loans board

    PCP deals are not a good idea for a Debt-free wannabe. Low monthly costs but the interest racks up over the 3-5 year term, and at the end there are often prohibitive charges for any mileage overruns or damage to the car.
    I used PCP but only because it got me a discount from the car salesman, and I was able to pay off the PCP loan in full immediately.
    • Mobeer
    • By Mobeer 13th Sep 18, 11:35 PM
    • 1,739 Posts
    • 4,414 Thanks
    Mobeer
    • #3
    • 13th Sep 18, 11:35 PM
    • #3
    • 13th Sep 18, 11:35 PM
    Lots of discussion on both the Loans and Motoring boards.

    - Some people use them to their advantage (me included)
    - Others don't see the appeal and don't use them
    - A small minority sign up to them with seemingly no clue what they are

    Being in either of the first two groups is fine, but if you don't understand a contract then don't sign up to it.
    • andydownes123
    • By andydownes123 14th Sep 18, 8:50 AM
    • 391 Posts
    • 489 Thanks
    andydownes123
    • #4
    • 14th Sep 18, 8:50 AM
    • #4
    • 14th Sep 18, 8:50 AM
    PCP Advantages


    - New car more often
    - Because it's a new car, you don't need to MOT

    - Usually includes the TAX
    - Under warranty so you literally don't owe a penny if it goes wrong


    Disadvantages


    - You are effectively renting so you get nothing for your investment
    - Have to watch mileage and be wary of damage


    If you are looking for the best deals with a small deposit, you could do much worse than visit here: http://www.lingscars.com
    • Niv
    • By Niv 14th Sep 18, 8:54 AM
    • 1,690 Posts
    • 1,507 Thanks
    Niv
    • #5
    • 14th Sep 18, 8:54 AM
    • #5
    • 14th Sep 18, 8:54 AM
    PCP Advantages


    - New car more often
    - Because it's a new car, you don't need to MOT

    - Usually includes the TAX
    - Under warranty so you literally don't owe a penny if it goes wrong


    Disadvantages


    - You are effectively renting so you get nothing for your investment
    - Have to watch mileage and be wary of damage


    If you are looking for the best deals with a small deposit, you could do much worse than visit here: http://www.lingscars.com
    Originally posted by andydownes123


    But some of those are only advantages / disadvantages if you do not intend to buy the car at the end of the deal. So it also depends what your intention is at the end.
    YNWA

    Target: Mortgage free by 58.
    • andydownes123
    • By andydownes123 14th Sep 18, 9:02 AM
    • 391 Posts
    • 489 Thanks
    andydownes123
    • #6
    • 14th Sep 18, 9:02 AM
    • #6
    • 14th Sep 18, 9:02 AM
    But some of those are only advantages / disadvantages if you do not intend to buy the car at the end of the deal. So it also depends what your intention is at the end.
    Originally posted by Niv

    True. Never take on a PCP deal if you intend to keep the car and pay the balloon payment. The interest is sky-high. They are great if you want a new car at a low monthly cost with trouble-free motoring.


    If you intend to keep the car, finance yourself using one of the banks on here.
    • Niv
    • By Niv 14th Sep 18, 10:02 AM
    • 1,690 Posts
    • 1,507 Thanks
    Niv
    • #7
    • 14th Sep 18, 10:02 AM
    • #7
    • 14th Sep 18, 10:02 AM
    True. Never take on a PCP deal if you intend to keep the car and pay the balloon payment. The interest is sky-high. They are great if you want a new car at a low monthly cost with trouble-free motoring.


    If you intend to keep the car, finance yourself using one of the banks on here.
    Originally posted by andydownes123
    my pcp APR is 0%
    YNWA

    Target: Mortgage free by 58.
    • andydownes123
    • By andydownes123 14th Sep 18, 11:28 AM
    • 391 Posts
    • 489 Thanks
    andydownes123
    • #8
    • 14th Sep 18, 11:28 AM
    • #8
    • 14th Sep 18, 11:28 AM
    my pcp APR is 0%
    Originally posted by Niv

    Lucky you lol
    • Niv
    • By Niv 14th Sep 18, 12:20 PM
    • 1,690 Posts
    • 1,507 Thanks
    Niv
    • #9
    • 14th Sep 18, 12:20 PM
    • #9
    • 14th Sep 18, 12:20 PM
    Lucky you lol
    Originally posted by andydownes123
    Thats what I thought when it was offered!
    YNWA

    Target: Mortgage free by 58.
    • Indout96
    • By Indout96 14th Sep 18, 1:25 PM
    • 1,873 Posts
    • 2,650 Thanks
    Indout96
    We have 1 car on PCH - same as PCP but no option to buy at the end. Payments are lower than PCP and my wife gets a new car to drive round in.
    Benefit is fixed cost - new car to her exact specification.
    Bad points - Dealer serving costs - any damage needs fixing before return.


    I have my car (second hand) on PCP (@ 1.5%) and put away the money each month for the final payment. This was cheaper than a bank loan (I was offered 2.7% from bank) so cheaper overall.
    I expect several calls from the main dealer I bought it from close to the final payments trying to "upgrade" me to a newer car for the same cost but they can whistle.


    The cars are our only debt.
    Understeer is when the front of the car hits the wall.
    Oversteer is when the back of the car hits the wall
    BHP is how fast you hit the wall
    Torque is how far you take the wall after you hit it.
    • Tarambor
    • By Tarambor 14th Sep 18, 2:25 PM
    • 3,795 Posts
    • 2,822 Thanks
    Tarambor
    Just wondering what everyones thoughts are on PCP car finace as seems so popular lately is it worth doing or should it be avoided at all costs?
    Originally posted by Mrjuls33
    You get to finance a brand new car and therefore finance the largest chunk of depreciation on it and not only that, because very few people actually buy the car at the end of the PCP deal and just get another they do that in perpetuity. A new car can depreciate by over 50% of its new value in the first 2 years. From a money saving point of view you are better buying a car that is 2-3 years old where some other mug has paid the largest lump of depreciation.

    I find this Youtube video quite apt. It is American but the message in it is bang on.

    https://www.youtube.com/watch?v=8tk1BycWC9I
    • Tarambor
    • By Tarambor 14th Sep 18, 2:26 PM
    • 3,795 Posts
    • 2,822 Thanks
    Tarambor
    my pcp APR is 0%
    Originally posted by Niv
    The annual depreciation on your car you are financing via PCP will be 1000s a year.
    • Niv
    • By Niv 14th Sep 18, 4:04 PM
    • 1,690 Posts
    • 1,507 Thanks
    Niv
    The annual depreciation on your car you are financing via PCP will be 1000s a year.
    Originally posted by Tarambor


    Thanks. I am fully aware car's depreciate over time and the greatest rate of depreciation occurs at the start of the term. Lucky for me, my company is paying though.
    YNWA

    Target: Mortgage free by 58.
    • Nasqueron
    • By Nasqueron 14th Sep 18, 5:04 PM
    • 5,961 Posts
    • 3,610 Thanks
    Nasqueron
    If you get it on 0% finance go for it, save the cash in the bank and earn some interest.

    If you want to buy the car after 3 1/2 years ignore garbage depreciation nonsense as you are buying the car. If you want to trade it in after that time then depreciation is a real issue - make sure you get the correct mileage for the GMV and look after the car (service at official dealer etc). I bought mine on 0% and thought the deal was great but if I was buying second hand / ex-demo then I'd rather pay cash or get a loan
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