PCP car finance good or bad?

[ZNation]

After losing a lot of money on second hand cars over the years and the unreliability of breaking down and car parts I'm looking into car finance and thinking should I get a new car which would be under warranty on pcp and at least I know how much I will be paying and won't be unreliable .
However I'm torn thinking I ll never own the car at the end (I know you can pay final fee but won't have that money to pay to own car at end)

Does anyone on here have a car on pcp?, what down sides have you found?
I'm a bit worried when I hand the car back after 3 years they say it's damaged or something and I will end up owing them money or if I have a accident what happens then as insurance never pay the value of the car so would I be left paying for pcp and a difference in what they pay out?
Any help appreciated

I think PCP is the next PPI - it's an absolute racket.

If you have access to reasonable credit, you should buy a 1-2 year old car that holds it's value well, pay the loan off over 5 years (for about the same monthly cost as PCP). At the end of the 5 years you have a 7 year old car that has some value but you now own it outright. You can sell it, use the money you make as a deposit for a new second hand car, take out another loan and go through the whole process again with a slightly better car.

Check Autocar for brands and models that are reliable. We did this 10 years ago with a skoda and it was brilliant. It only had one breakdown in the 7 years we owned it. We started the process again 2 years ago.

PCP allows people to drive around in better cars than they would otherwise be able to afford, but you definitely pay a price for it. It's like renting v getting a mortgage on a house, but you need the same deposit for each, and you will never get your deposit back, so you'll be locked into PCP for the rest of your life....

We done it a couple of years ago but only took that option rather than HP because it was 0%. It's a bit like leasing a car that you'll never own but have a brand new car every couple of years. Depends what your wants/needs are.

It depends on what you need and what you can afford. I had two cars on PCPs with 0 deposit - wouldn't have done it if a big deposit had been needed.

It suited me, the warranty was useful. I paid off the second one and have it still, and I wouldn't have a PCP again - but my financial situation has changed a lot in that I could now buy a 1-2 year old car outright without needing a loan.

You'd be buggered if you unexpectedly came out of work and could not longer afford the monthly payments

We currently lease, get a brand new car every couple of year.
Select car leasing are great.
Works best for us, like you we were loosing too much money buying cars out right.

Agree with @WhatWillSantaBring

If you can’t buy a safe, decent car outright, then you are better off buying a used car aged 1-4yrs old with no more than a 3yr loan. Shop around for lowest interest rate. That way you own the car at the end and can trade it in at anytime towards a newer car (so long as it is worth more than what you owe).

I have had 3, never a problem when changing, often good a good deal upgrading it early. I loved the security of driving round in a new car all the time. I have just taken out a 4th pcp on a 1 year old car. It is a higher interest rate but worked out lots cheaper as was £7 k cheaper than a new car. I will pay it off early as I have some money due to me soon and save over a thousand pounds in interest. If you need a reliable car for work I think it’s great. I couldn’t have afforded a new car when I first started getting them.

DH is in the car trade and we've had 2 cars on PCP.... low deposit, staff discount and low rate of finance, then sold the car privately at the end of the 4 years and paid the finance off, and kept the rest of the money to put towards our next car. Worked for us. You don't have to go back to the same dealer, you can keep the car at the end if you like or sell it privately.

I have one on PCP. I do have the money in the bank to pay it off if I couldn't work though. Obviously I am paying interest but I am saving for a house deposit.
I do have a separate account for the balloon payment if I decide to keep it which I probably will.

For some it may be great but I would say Nope don’t do it. I had a dreadful time with my PCP when I had one which almost knackered my credit rating. But that could have been the company I used.

I’d go with the advice given so far on a used car or save a big enough deposit for a new one and finance it over 4 or 5 years.

PCP is fine as long as you have a secure job, or money in savings to pay the monthly payments should you lose your job. If your car is written off for any reason it may be that the insurance payout won't cover the outstanding amount on the finance agreement. GAP insurance can be purchased to cover this when you sign the PCP agreement though.

Basically you need to decide whether you can afford to consistently make the repayments each month. It's a bit like having a mortgage, only your car will decrease in value over time (as do all cars, whether bought on PCP, with a loan or outright). There are no hidden tricks to it.

I would never do it. All that money you pay and then you dont own the car at the end unless you make a big balloon payment. The cheaper the monthly pymts the bugger the balloon payment. My friend had to remortgage her house to pay her £12k balloon payment.

I think buying a 1-3 year old car with a loan and then owning it at the end to either sell on or keep.

*BIGGER not bugger

Damn you autocorrect

It depends on if you want a new car every few years or not. New car low monthly payments and great deals out there if you do. I wouldn't do it if I wanted to keep the car.

My last car on pcp I paid the ballon payment and sold it for a profit and got different deal.

You just have to be savvy. The best thing to do is to calculate the total cost over the whole term eg deposit or part ex plus x36 monthly payment plus what ever admin fees.

Just ensure you have enough to put down as a deposit in the next car.