PCP

legend7 said:
If you buy a new car outright they depreciate too though.
It can work if you get the right deal and fancy a new car every 2 or 3 years with a payment you can afford.
I know a couple people with evoques mind and they had loads of bother with them.
Click to expand...
PCP is literally a loan to buy the depreciation of the new car.
That's all it is. The difference in value between the new car, and a 3yr old car, divided into monthly payments.

AND they lowball the 3yr value so that you actually pay a little bit more - check it out, the "final purchase price" always looks really cheap. That's because you've already paid over the odds for it.

I've done the numbers a few times on here. In general PCP is a bad deal. BUT sometimes you can get a great deal if they need to dump stock. You need to understand the numbers yourself and know how to check.

Not saying PCP can't be useful in the right situation. I've done one myself when I needed a car, quick and didn't know if it would be suitable for more than 3 years - so buying something outright wasn't the best plan at the time, and I didn't have much savings back then either.
 


smasha said:
After 3 years you'll have something like 40% to pay off to own the car. Can get trapped into never actually owning a car as you need to trade in every time to pay the final lump sum payment off. You'll have paid interest on that lump sum payment too
Click to expand...

Or sell privately/webuyanycar and pay the finance off. At circa month 35 of a 48 month agreement, you wouldn’t be out pocket unless you’ve chipped it to death.

At the halfway point of the agreement, providing 50% of the deal has been paid off and you haven’t gone over agreed mileage, you can hand it back anyway no questions asked
 
It can work well if you get lucky. Last car had a guaranteed final value which ended up being way off due to some unexpected depreciation over the 4 year term. I simply handed it back and it wasn't my problem. If I had bought it outright I would have lost thousands.
 
joemcdokes said:
How do you work out affordability?
Click to expand...

Well I get your point as I suppose you could say PCP makes cars more affordable

But for me if you're paying best part of 500 notes a month + interest for 3 or 4 years and still only own half a car at the end of it, that doesn't seem very affordable

All comes down to what you want to spend your money on I guess
 
Have done both over the years, and see benefits with both although I will now be sticking with PCP deals
buying outright I changed my car every 3 year had money value in the car and a 3 year affordable loan usually on a demonstrator car about 6 month old virtually brand new but a lot cheaper than new 😉
worked well as always had a decent car and changed before it even needed new tyres so no maintenance costs at all and good trade in deals
Currently got a 3 year PCP on a decent motor had to put a 3k deposit down but monthly payment well within my budget so I paying about same as I always paid for a car
Fact of life is cars are a luxury and can be a money pit
Stick to what u can afford simple
anth said:
We got our XC90 on PCP that we arranged ourselves via the bank. Much better rate than the dealer was offering. Car was 2 years old and had already depreciated by over 20k down to 30k. With a 4 year PCP deal we are paying £350 a month, then the lump sum is about 13k if I remember rightly. That gives me the option of getting rid then or getting a loan and keeping it.

This was the only way we could afford such a nice car. We needed the space for the dogs, family and camping gear. Sure we could have got a Zafria from 2002 for the cost of a couple of months PCP payments, but we’ve done the cheap car route plenty of times. Getting to the point were we were having large repair bills or having to scrap cars we hadn’t finished paying for. Our last one was 15k and lasted us 6 years so we’d paid it off and the hangover debt from the previous car and we sold it for £4K.

The way I see it is if you owe less than the car is worth, you can sell it at anytime, pay off the debt and have cash left over for the next one. Our plan is that this car will take 7 years to pay off, but we may sell it after 5, because it should hold it’s value enough that we have plenty in it.
Click to expand...
Well put mate
I would guess the best deal for you is to get rid at end of ur current deal before u end of having too spend money on maintenance
And get yourself another real nice motor on a similar deal no brainier really
 
Last edited:
I can't understand why people are paying daft money for cars that have limited mileage as low as 6 or 8k miles a year. Prob just to pis
s the neighbours off and look good to their "fwends" on Facebook. I know people who have seat covers and are ott protective of their lease car as they know the any chip or scratch will cost them. These deals don't allow for fair fair wear and tear as far as I can tell. Couple of stone chips and you get turned over.
 
My car was originally bought on a PCP deal and I was intending to hand it back rather than pay the balloon cost at the end. Came to it and I still like the car, it's been nothing but reliable and still looks/drives ok so I got a low cost loan and paid off the finance. Loan will be cleared in 12-months and I'll have a car worth roughly £10k.
 
mackem35 said:
I can't understand why people are paying daft money for cars that have limited mileage as low as 6 or 8k miles a year. Prob just to pis
s the neighbours off and look good to their "fwends" on Facebook. I know people who have seat covers and are ott protective of their lease car as they know the any chip or scratch will cost them. These deals don't allow for fair fair wear and tear as far as I can tell. Couple of stone chips and you get turned over.
Click to expand...
I can't understand why people can't understand that other people spend money on whatever they like.
Feels like you are projecting a bit if the only reason you can see for having a nice car is to piss off your neighbours or impress people on Facebook.
 
Mickdundee said:
Why pay a monthly amount you can easily afford for a reliable car, when you can buy an absolute shit-tip out right that’s always in the garage?

That’s the typical SMB response isn’t it?
Click to expand...
Ha spot on mate well said
some of us like nice things so we work hard then treat ourselves wether it be a car, holiday or watch or all 3 happy days
U can’t take ur money with u enjoy the fooker while u can
 
RestlessNatives said:
I can't understand why people can't understand that other people spend money on whatever they like.
Feels like you are projecting a bit if the only reason you can see for having a nice car is to piss off your neighbours or impress people on Facebook.
Click to expand...
I just happen to think a car is for driving not standing around. I was making a point about pcp with limited miles. My car has been up and down to London to see Sunderland a few times while my mate with his pcp "nice car" makes excuses about his wife needing t and the real reason he can't put the miles on it, so I end up driving tbh I would anyway but not the point. Could not care less what/why/how people spend their money - i can see why you would want a nice car if you intend to drive it but not to be limited to how/where you can drive it, especially when you may never own it. Not like buying a future classic and keeping it as an investment.
 
Cookie said:
My car was originally bought on a PCP deal and I was intending to hand it back rather than pay the balloon cost at the end. Came to it and I still like the car, it's been nothing but reliable and still looks/drives ok so I got a low cost loan and paid off the finance. Loan will be cleared in 12-months and I'll have a car worth roughly £10k.
Click to expand...
From most deals I've seen, that's the best outcome with a PCP. You get a 3yr old car for 80% of the market value, and you know its not a shitbox under the hood.
 
PTR said:
PCP is literally a loan to buy the depreciation of the new car.
That's all it is. The difference in value between the new car, and a 3yr old car, divided into monthly payments.

AND they lowball the 3yr value so that you actually pay a little bit more - check it out, the "final purchase price" always looks really cheap. That's because you've already paid over the odds for it.

I've done the numbers a few times on here. In general PCP is a bad deal. BUT sometimes you can get a great deal if they need to dump stock. You need to understand the numbers yourself and know how to check.

Not saying PCP can't be useful in the right situation. I've done one myself when I needed a car, quick and didn't know if it would be suitable for more than 3 years - so buying something outright wasn't the best plan at the time, and I didn't have much savings back then either.
Click to expand...
Mate I know exactly how it works I've bought and leased cars for years and 3 of my mates are in the trade.
As I say it works well for some people if they like a set figure a month for a car and like to change regularly.
Same as a lot of people get a phone on contract when it's cheaper to buy a handset outright.
And yes it depends on the deal you can strike and some people get a crap deal or put too much down up front or when they trade.
You can make money when your term is up though depending on the motor.
I pocketed a couple of grand by selling one of mine a year early.
 
legend7 said:
Mate I know exactly how it works I've bought and leased cars for years and 3 of my mates are in the trade.
As I say it works well for some people if they like a set figure a month for a car and like to change regularly.
Same as a lot of people get a phone on contract when it's cheaper to buy a handset outright.
And yes it depends on the deal you can strike and some people get a crap deal or put too much down up front or when they trade.
You can make money when your term is up though depending on the motor.
I pocketed a couple of grand by selling one of mine a year early.
Click to expand...
Yep totally agree with all that.
We considered buying ours, just to sell it - same as you.

Edit: Sorry, checking now I see that you are not OP. I thought you were, hence my generic advice in response to a request.
 
Last edited:
PTR said:
Yep totally agree with all that.
We considered buying ours, just to sell it - same as you.

Edit: Sorry, checking now I see that you are not OP. I thought you were, hence my generic advice in response to a request.
Click to expand...
Ahh it's fine man and as you said it depends on the deal because if you don't know how it works which is pretty simple when you break it down you can get stung.
I got my mate a cracking deal on an A3 a few years ago through someone I'd used previously with only 3 months down (think it was bout 900 quid from memory)
He took his lass to wearside audi to look at one who talked him into trading his golf in, he was over the moon that he had saved an extra15 quid a month and deposit on what I'd got him until I explained he had given them a 3 grand car and 36x15 and the 900 down meant he'd still lost a fair few quid.
 

Back
Top