PCP - Worth it or best avoided?

[IVFthenPERI]

We need a new car. I have 4 year old twins so we need a decent sized car. We've been badly let down by the car that we have so need something newer with hopefully less issues.

We've always been a keep until it breaks kind of people but since having kids that's changed and we've realised that we might have to change our car a bit more often - say 4-5 years rather than 10-15 years.

With this in mind I've been looking at PCP, but don't know an awful lot about it. I've read lots online but would be grateful for some "real life" experience - good & bad

Have you ever done PCP - would you recommend or avoid like the plague?

God I thought you were talking about drugs! I was very confused

😂😂😂 I don’t even know what PCP is

What's PCP?

Oh dear, I thought you were talking about drugs too! (A hazy recollection of how PCP is also known as angel dust came to mind although I hasten to add I have never taken it!). I don't drive so can't help you on the car front either, sorry!

I'd say avoid, particularly with Volksagen Financial Services. I'm now wrangling with them via the Ombudsman as they've listed a missed payment on my credit file when I have a recorded phone call when I confirmed the car was going back telling me that I owed nothing more. They also repeatedly denied being in possession of the car - after it had left mine - when it was clocked by the police for speeding, and it took me many emails and phone calls for them to come forward and admit it. They'll be very eager and enthusiastic when you want to take your PCP out, but walking away without some sort of issue is almost impossible.

If you DO choose the PCP route - and I know why I initially did, and appreciate your reasons; it can work for particular scenarios - then list everything, record every conversation, time and date everything, and get the names of the people you're speaking to. This may sound like Doomsday prepping but they don't make leaving easy and you've got to have that available detail to hand. Also, keep an eye on your mileage and remember that you can 'buy' more, which is cheaper than the excess mileage cost they'll otherwise add on at the end.

We looked at it a few years ago.
If you have the cash better to buy, especially a car thats say 9 months old. If you have the cashflow then it saves the upfront cost

I’ve had 3 or 4 one after the other on pcp and have never had a problem. Mine were the cheaper end of deals, I also took at a service plan at the same time and that was it . Pay the money, turn up for a service including courtesy car, then at the end of 3 years take it back and start a new plan. I’m just about to hand back what will be my final car probably, I’m going to pay the final payment this time , and as I’ve just retired and no longer need the car I’ll sell it as the second hand car market is very strong at the moment. So can recoup the final payment cost plus a bit more .

I had a very, very similar situation with VW!

I think leasing is better value and most people do that now .

In the long run PCPs end up costing quite a lot of money. If you can, I'd say go for a used car (doesn't have to be that old eg ex-demo or an ex-PCP someone has traded up) and take out a bank loan which would have similar monthly payments to the PCP. That way, the car is yours at the end without a big balloon payment.

We bought a new car on PCP and when it came to the end of the initial 3 year agreement, there was no equity to use as a deposit on the next one 🙄 So no, I wouldn’t advise it. You are essentially paying for a car you’ll never own if you don’t pay the balloon payment. Get one on HP if you aren’t looking to buy it upfront, at least you’ll own it at the end of the term.

We've always done HP because we prefer to own the car at the end. I think PCP would work if you've got a set amount that you can budget for a car monthly and can afford that for years to come. We got a 0% finance deal for our current HP car so it seemed like a no brainer. With our first HP car we had to haggle the interest (which we did by proving we had a bank loan offer at a lower interest rate).

Interest rates have gone a bit crazy on PCPs so they’re not the bargain they once were. Not that long ago a 0% PCP was a complete no-brainier, only a complete moron would’ve bought for cash instead. Do the sums, work out what it would look like in 3,4,5 years time. Would you change at the end of 3 years? Would you save and pay off the balloon? Would you refinance the balloon? Would a personal loan over 5 years be cheaper? Make a spreadsheet for all the options, it should be pretty obvious which is the cheapest for your needs.

PCP is a clever invention by the car industry, to enable people to buy cars they can’t really afford and trapping them into a cycle of monthly payments and regular upgrades. They have basically copied the model from the mobile phone industry.

You are best off buying a car outright, either with savings or a bank loan. There is really no need to upgrade every 4 or 5 years. A decent car will easily last 2 or 3 times longer than that.

I had a car on PCP in the low interest rate days, it was fine but now is not as affordable as it was due to interest rate rises. I think if we were to buy another I'd get nearly new, part save and part bank loan

We have our Mini Countryman on lease. Would definitely recommend exploring that! It’s 7 years old now (we got it when it was only 2). Only thing we’ve had to get fixed have been brake pad and tyre replacements. Think our payments were circa £300 to begin with and now £120 a month

I've just finished my PCP. I got it 4 years ago always with the intention to keep the car. It was with dacia and cost me £170 a month for the sandero stepway and I've just paid the £3200 balloon payment.
Previous to this car I'd always buy some junk off someone's driveway for £200, run it till it died and then get a new one. Which essentially meant I could get a new one every 5-6 weeks for the price I was paying for the PCP. But I needed the reliability. I'd just finished Uni and didn't have the funds upfront for anything.
They part ex'd my old car which gave me a £500 deposit (not bad for a £200 junk car).
I briefly looked into doing another PCP at the end as they started contacting me with all the "deals" but the prices had gone up hugely and the £8-9k balloon payments had me priced out, let alone the extra £100 ish a month for a car no better!
I'd absolutely hate the thought of giving this back, after 4 years of payments, in exchange for nothing. So really buying it was my only option. They can refinance the final payment for another 12-36 months with some companies so that was my backup plan if, for whatever reason, I didn't have the £3.2k to pay.
Considering the used car market at the moment, the balloon payment didn't feel like such a hit to be honest. The car itself still values at £9k at the moment despite heavy use for 4 years.
What makes you want to change car so regularly?

Basically that's to say that it worked for me at the time. I'm glad I did it. But absolutely no way would I want to be giving the car back now or really even exchanging for a new deal.
HP are definitely more in favour at the moment. Interest rates on everything had rocketed though.

Is a lease the same as HP?

I have had many. Never had an issue, car has always been worth more than the balloon payment at the end so always had a "deposit" to put down on the next. To be honest i see it as more of a lease.

Only dealt with toyota and arnold clark