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    • looknohands
    • By looknohands 15th Sep 18, 5:48 PM
    • 388Posts
    • 164Thanks
    looknohands
    PCP or other option?
    • #1
    • 15th Sep 18, 5:48 PM
    PCP or other option? 15th Sep 18 at 5:48 PM
    Hi, I know there's tons of these questions but just wanted to put my scenario here to see what people thought.

    I've been looking at used cars buying with cash, I've only ever bought cars cash and have no knowledge of financing that exists for cars (I'd never heard of PCP until today)

    A dealer I test drove a used car with mentioned PCP to buy a brand new car instead of the used one, he explained how it works, took a while for me to understand (I still might not understand it). So I think you're renting a car and in return you get a reliable new car, warranty and no MOT's, In total it would cost us around 15k to do the PCP over 4 years, we then don't own the car and put any equity (which we wouldn't count on) towards the next car. Or in rare cases people buy the car from the PCP company.

    We don't use a car lots around 10k per year, we have had issues driving long distance and breaking down (on the way to airport) plus spending on repairs / MOT etc, perhaps 5k in 4 years. And currently we avoid using our old car when we travel over 200+ miles, we rent a car we can trust which has been maybe 2k over 4 years. We think of a car more as a utility really, if we could rent a car as easily as our our dishwasher we would!

    Also we're kind of interested in using a hybrid / electric when the technology improves eventually. So it would be nice to be able to have a new car at the moment but then switch to something more eco friendly in years to come.

    Have I understood that PCP is kind of for renting, not owning. Does this seem like a good case for PCP or would you always try and pay cash and why?
    Last edited by looknohands; 15-09-2018 at 5:51 PM.
Page 1
    • Mobeer
    • By Mobeer 15th Sep 18, 6:46 PM
    • 1,728 Posts
    • 4,408 Thanks
    Mobeer
    • #2
    • 15th Sep 18, 6:46 PM
    • #2
    • 15th Sep 18, 6:46 PM
    PCP can be used for either buying or effectively leasing (renting) a car - you have a choice at the end of the agreement whether to pay a final balance and keep the car, or return the car. If you plan to pay the final payment then you ideally want a sound plan for how to save up that money before the end of the agreement.

    Lease deals are just rentals - you have no option to keep the car.

    Loans and HP deals always result in you owning the car (if you keep up payments).

    --

    PCP deals on a used car generally seem much worse than on a new car. On a new car you would expect incentives (discounts) and a lower APR.

    --
    Maybe you need to work out your current spending, including rentals and repairs etc. Then use that as a guide to what you know you can afford.
    • Tarambor
    • By Tarambor 16th Sep 18, 3:20 AM
    • 3,546 Posts
    • 2,616 Thanks
    Tarambor
    • #3
    • 16th Sep 18, 3:20 AM
    • #3
    • 16th Sep 18, 3:20 AM
    So your solution to avoiding 5k of repairs over a 4 year period (I'm assuming that doesn't include servicing or tyres because you'll have to service a car at main dealer rates and replace tyres on PCP) is to spend 15k over 4 years on a PCP deal and have nothing at the end of it?

    Not really money saving.
    • Nebulous2
    • By Nebulous2 16th Sep 18, 8:30 AM
    • 2,009 Posts
    • 1,234 Thanks
    Nebulous2
    • #4
    • 16th Sep 18, 8:30 AM
    • #4
    • 16th Sep 18, 8:30 AM
    There are lots of other threads on PCP here. eg:-

    https://forums.moneysavingexpert.com/showthread.php?t=5894854

    The majority view is against it, but some people argue strongly in favour.

    Life isn't all about moneysaving for most people, even though it is a preoccupation for some of us here. The lure of a bright shiny car was very strong for me in my late teens, but wore off after trying to run a volkswagen scirocco. For some people that appeal never goes away.

    So I don't underestimate the attraction, but for most people it is a very expensive way to run a vehicle.
    • Dandytf
    • By Dandytf 16th Sep 18, 8:42 AM
    • 1,499 Posts
    • 433 Thanks
    Dandytf
    • #5
    • 16th Sep 18, 8:42 AM
    • #5
    • 16th Sep 18, 8:42 AM
    OP Ican't get 4.5k balloon payment out of my head when I was recently declined for PCP car
    Though the dealerships are certainly pushing it as best way forward for a car and option to switch in a few years.
    Until I can get another car in future I'm still 4yrs hire purchase old school finance.
    And I get to claim my help to save account in 4 yrs as I'm not spending it on PCP balloon payment.
    Only possible as my current car is almost 2 yrs into 4 yrs old school finance-non PCP.
    @33k approx it could take some convincing to switch to PCP in future-though I was almost tempted recently before being declined.

    Good luck with your choice
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • looknohands
    • By looknohands 16th Sep 18, 11:34 AM
    • 388 Posts
    • 164 Thanks
    looknohands
    • #6
    • 16th Sep 18, 11:34 AM
    • #6
    • 16th Sep 18, 11:34 AM
    So your solution to avoiding 5k of repairs over a 4 year period (I'm assuming that doesn't include servicing or tyres because you'll have to service a car at main dealer rates and replace tyres on PCP) is to spend 15k over 4 years on a PCP deal and have nothing at the end of it?

    Not really money saving.
    Originally posted by Tarambor
    The solution was also to avoid the inconvenience of breaking down / spending time taking the car to the garage / MOT. My last MOT we were without a car for 2 weeks.

    Correct on the tyres but the servicing is thrown in with the deal.
    • ratrace
    • By ratrace 16th Sep 18, 1:32 PM
    • 608 Posts
    • 420 Thanks
    ratrace
    • #7
    • 16th Sep 18, 1:32 PM
    • #7
    • 16th Sep 18, 1:32 PM
    The solution was also to avoid the inconvenience of breaking down / spending time taking the car to the garage / MOT. My last MOT we were without a car for 2 weeks.

    Correct on the tyres but the servicing is thrown in with the deal.
    Originally posted by looknohands

    15,000 / 48 months = 312 x 12 = 3,750 (cost a year)

    Personally i would not get a brand new car on pcp, you will be paying 3,750 a year to rent it,

    no used car will require that much spending on it unless its a engine replament job

    we had an audi a3 that i was driving and the engine seized up, so we bought a low mileage engine from the scrapyard did all the timing belt, new clutch etc... all came in at 3,500 fitted, we ran the car for a further 5 years with no problems at all and even got a decent amount for it when we sold it

    the point im trying to make is that if you want to be mse and have money in your own pocket instead of someone elses then you have to be carefull how you spend

    also i was without a car for 1.5 weeks and just used Uber to get to work and back it s far cheaper that pcp payments
    People are caught up in an egotistic artificial rat race to display a false image to society. We want the biggest house, fanciest car, and we don't mind paying the sky high mortgage to put up that show. We sacrifice our biggest assets our health and time, We feel happy when we see people look up to us and see how successful we are

    Rat Race
    • savesavesave11
    • By savesavesave11 16th Sep 18, 5:44 PM
    • 2 Posts
    • 1 Thanks
    savesavesave11
    • #8
    • 16th Sep 18, 5:44 PM
    • #8
    • 16th Sep 18, 5:44 PM
    Save up for a car don't buy it on finance. It's a waste of money.
    • UltraRevenge
    • By UltraRevenge 16th Sep 18, 8:41 PM
    • 8 Posts
    • 2 Thanks
    UltraRevenge
    • #9
    • 16th Sep 18, 8:41 PM
    • #9
    • 16th Sep 18, 8:41 PM
    I always get tempted by these new cars, until i see the monthly cost. Then you have to take into account insurance and any charges *which may be applied* for any damages. I would rather part loan, and get a 2 to 3 year old newish car - Which then I wont have to keep worrying about things like minor wear and tear.
    • DrEskimo
    • By DrEskimo 16th Sep 18, 9:40 PM
    • 223 Posts
    • 150 Thanks
    DrEskimo
    The solution was also to avoid the inconvenience of breaking down / spending time taking the car to the garage / MOT. My last MOT we were without a car for 2 weeks.

    Correct on the tyres but the servicing is thrown in with the deal.
    Originally posted by looknohands
    New cars can also break down/spend time at the garage...

    There are some that think that reliability of cars follows a U-shaped curve, whereby the first 2 years and beyond 8-years are the least reliable points in car ownership (hence 3-8years being the 'sweet-spot'). I guess the thinking is that the first owner solves all the issues in the first couple of years, and beyond 8-years is where components start getting worn.

    I haven't seen any data or comprehensive analysis to conclude either way. For some reason, most manufacturers aren't that open about giving out their data on repairs...almost as if they profit from a continued perception that used cars cost thousands and therefore you should keep buying brand new ones....
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