How do people afford to PCP brand new cars?!

[JusWunderin]

DH recently mentioned looking into us getting the car I’ve had my eye on for many eyes now. But we’ve looked at prices for financing one and my good god alive it’s not what I expected!

I’m struggling to imagine someone having £400 a month to comfortable pay for a car, we had a budget of about £200 a month.. which I thought would get me something pretty nice!😂

My heart is a little sore, I’ve never really had anything ‘proper nice’ we don’t buy anything designer, branded/luxury. We live modestly, both work full time in what we thought were good jobs on relatively good money for where we live. this car was the one thing I just thought would be my little bit of luxury in life.. but it turns out it’s quite far out from ‘a little bit’ of luxury 😂 it’s big luxury and now I’m pretty gutted as I can’t imagine us ever having that sort of money to fork out every month for a car 😅

If you lease/brought a brand new car recently.. how? What job do you do? How much do you earn (if you don’t mind me asking)? I need to know where I’m going wrong 😂

We did PCP a couple of times when DH needed a decent car for work. Each time we paid the final balloon payment and then sold privately.

We made 3k profit the first time and 6k the next.
Obviously you have to have money available to do this but always worth checking before handing back

I got my eldest a brand new lease car. £0 deposit and £180 per month

Taking into consideration the depreciation (even on a 2nd/3rd hand car), the saving on insurance between the brand new car with all its safety features, the lower tax band etc over 2 years and it worked out slightly cheaper to get the new car.

It also meant I wasn’t worried about her breaking down in some country Lane miles from anywhere.
To give some context, dh’s was bought 2nd hand 7 years ago and with depreciation, repairs, new tyres, getting it through its mot each year etc it has cost us £250 per month.

All that information is provided, available and completely clear. Yes it's not the headline ad price you might see but no different from Ryanair saying "Summer holiday flights from £25".

With mine I got a quote based on my average mileage over the last few years, a second quote based on a slightly higher mileage and then worked out how much I could go over my paid for mileage before it would've made sense to have a higher mileage in the deal. I get that people think it's expensive and prefer their way, but the details of the deals are perfectly clear.

I know fully what you mean. I always said my next car was going to be a car that I loved. Not a brand new car but the car that I wanted. Went looking last year and couldn't believe the prices. In the end I only went up 2 years. The 'new car' is significatly older than I had ever intended. It wasnt the car I wanted. It cost more than it should have for the age. But it has extremely low milage and drives and sounds like a brand new car. I only do short distances so for me it didnt make sense to go for a newer car. I think I will have this car for a long time. I have to say I am quiet happy with it. I was thrilled to get rid of my previous one as that milage was very high and was stating to cause problems. Like you I would love to get a car that I love but prehaps its age but now I dont care as much. Its only a material position. It could be parked and be damaged badly by someone else or scrapped. I havent read the comments so this may not go down so well but surprisingly I have noticed that ppl with brand new/flashy cars are in general tight with money/time #controversial . Its all about appearance and showing that you have a lot of money but been up to eye balls in dept. Of course a lot of others are company cars.

But vans don't have leather seats, flexible seating arrangements and the general comfort we want when driving across Europe. Most have ULEZ charges and expensive tax too. There's a zone that I drive in daily that charges for vans, but not an Alphard.

My dad always said I should buy cars with what cash I have available, and never take on finance (or take on any debt besides a mortgage tbf), and I've only ever bought cars with what money I have available at the time. So the last car I bought is a 12-yr-old Yaris, but it felt great that it was my savings and not an ongoing payment. Admittedly my dad can afford much better cars with cash 😂 I get paid on project completions, rather than a regular salary, so monthly payments aren't something that work well for me as I don't get paid too regularly

Likewise. Never borrowed nor taken out finance to buy a car. Must have saved tens of thousands in interest over the 40 years I've been driving.

First car was a cheap wreck bought from a dodgy used car dealer on our trading estate! Cost just a few hundred which I'd saved from my first six months wages - I didn't have high expectations but surprisingly it lasted around 18 months, but by that time I'd got another 18 months worth of savings so I could trade up to a much younger car, but still about 5/6 years old, and I did the same again a couple of years later to get a car which was about 2/3 years old. Then after another 2/3 years, traded it in and bought brand new outright. Nothing special, just a bog standard middle of the range, common brand. That lasted several years and over 190,000 miles, by which time, I'd saved enough to buy another brand new car, and so it went on, increasing the standard/brand quality each time. Sometimes I bought brand new to order, but most of the time I bought ex demos or pre-registered models.

Currently we have three cars in the family. One is brand new pre-registered with less than 10 miles on the clock, just bought last week. Another is a year old ex-demo which we bought with 3,000 miles on the clock, but the other is 16 years old which we bought brand new and still going strong, no plans to sell or scrap it as it's a good little work horse and ideal for local running about. We tend to use the newer cars for longer journeys, holidays, etc.

If you buy new or nearly new and look after them (careful driving, properly serviced etc), they can last forever with minimal maintenance/cost. The 16 year old one has cost us less than £1,000 per year over it's life to include servicing/MOTs/repairs and depreciation - you'll never get a lease car for £83.33 per month!! It also looks good as new with minimal marks inside or out.

Cars are a fortune and a total waste of money IMO. Unless you are on well over 100k a year and can afford pretty much any car you would like, there are so many other things I’d want to invest my money into. 45k to develop our house, something that will make us profit and enjoy at the same time or on a car that still needs insurance, tax, fuel, servicing, fixing…

We live in a pretty affluent area, every morning on the school run I’m sat at the lights wedged between Range Rover, Jags, Porsches, the odd Lambo and I’m in my Micra 🤣 I honestly couldn’t care less. It’s got loads of great features, I bought it outright at the end of a PCP (£180 pm) and it’s kept its value. I’d never do another PCP though, they sound great in theory but you’re locked into an endless agreement with the same make of car, you want to get out it and it will cost you a lot

As a lil’ update for those who have even the slightest bit of interest.

My DREAM car has popped up, and by dream I mean it’s the make, model and colour that I’ve wanted for nearly 10 years! The colour isn’t all that popular (I think it’s quite marmite!😂) but I love it, we’re going to view it tonight.

No PCP, but a small personal loan, it’s 6 years old so not brand new but I’m absolutely willing to compromise woo!

I am interested! I know how wonderful it feels to finally have your dream car.

Good luck!

Fab update, 🤞🤞for you!

Just got a brand new merc. Meant to buy a car a couple of years old but the brand new is on 0% finance. by the time we added the interest rate to a used car. It worked out as almost the same so made sense to go new. Also used part of the sale of our old car to offset

Absolutely! Even a car one year old will cost a lot less and still be decent. We always buy one to two years old and find the car holds its value better this way.

What IS stupid is buying a new car, paying list price, taking on expensive costs of debt etc to do so.

Nothing wrong with buying a new car if you get a deal, i.e. 0% interest, or a hefty discount, etc., as it can be similar or even cheaper over your ownership of the car than buying nearly new.

The brand new car we've just bought had a list price of £18k, we got it for £14k. The brand new car we bought a few years ago (different dealership, different make) had a list price of £20k and we got it for £15k. In both cases, we weren't looking for brand new, we'd gone shopping around various garages, doing research, aiming for low mileage cars up to 2 years old which is our usual profile. In both cases, the respective dealership had nothing in the model/age/mileage/colour that we were looking for, but once they realised we were serious, "had a word with their manager" and found they could do a "special" deal and supply a brand new car for the kind of price we were willing to pay for a 2 year old low mileage one! It never happens when you're stood in the showroom, you usually get a phone call a few days later.

It helps to go around dealerships in February and March!! That's when they're under pressure to hit new registration bonuses which can be huge for them. It's when they tend to pre-register cars in their compound themselves just to hit registration bonus targets. You're unlikely to get a deal like that if you order something that has to come from the factory, i.e. factory fitted extras or a particular colour/model that isn't in stock at a compound somewhere in the UK!

It's a matter of planning, research and not being in any particularly urgency. Both the above happened after we'd been looking around for cars for several weeks and after 2 or 3 visits to the dealerships in question, having a test drive in a similar car, etc. The compromise is usually a colour that wouldn't have been your first choice or a model/spec that wouldn't have been your first choice as you really have to take whatever they're pre-registered or whatever is in their compound (or a nearby dealer's compound as they often swap between dealerships).

I've had pcp for all my cars fr 10 years and I keep it around £200. I always get a Ford Fiesta though which is not necessarily what you might consider a flash new car. Last deal was not a brand new car but was 3 years old with only 3000 miles on clock. I'll keep it fr 3 years. Obviously the more money you put down the better the deal. I accumulate profit from pcps and this helps keep it at my money limit.

Hope everything went well when you went to view the car OP and you are now the owner of your dream car.

To answer your questions, I pay around 400 a month for my small SUV. It's not PCP. No big payment at beginning or end. It's about 10% of my monthly income and about 5% of the household monthly income.

I'm guessing no one on this thread has heard of car allowance, a non pensionable benefit. In my industry depending on your position you get an allowance a year for cars around 5-10k/yr. on top of salary. Consequently I get a brand new out the factory car every 4yrs, all paid by work including servicing, insurance etc. I just pay fuel.
I'd never pcp without this or if a deposit was required.

My nearly new Nissan Juke cost £150 pcm over 3 years and I used my old car (worth 5k) as part exchange. I absolutely love it - it has everything I need.

I wouldn't spend more than £150-175 per month and I did shop around for ages. The APR is important - if you can find a dealer charging around 9.9%, the monthly price will obviously be considerably less.

Before I bought my current car, I looked into the HP versus PCP options and decided PCP was best for me, as long as it was on a 3 year term.

HP gives you higher monthly payments and yes you own it at the end of the 5 year term (or however long you borrow the money for) but the car will have lost at least 50% of its value so in that scenario, PCP is better financially. Or so I think!

I paid 10k cash for my last but one car and I was so proud of myself - until it was time to trade it in 2.5 years later and despite being in great condition, it was only worth 5k. I just kept thinking I could have still had that 10k in savings and done a PCP deal.

Anyway, each to their own but if you've thought it through then no, I don't think PCP is a scam. For some people it can work out really well.

I paid 10k cash for my last but one car and I was so proud of myself - until it was time to trade it in 2.5 years later and despite being in great condition, it was only worth 5k. I just kept thinking I could have still had that 10k in savings and done a PCP deal.
what about the monthly payments and deposit you would have paid with the PCP? You need to add those to your savings too, ideally monthly.

So you spent £5k on your car in 2.5 years?

£250 a month for PCP plus a deposit of say £2000 gets you a nice new car.

But you are basically renting it for a few years - and potentially paying more than you could have done if you had paid cash and sold it at the end.

They also wouldn’t have got a £10k car on PCP, as it’s usually only for newer or more expensive cars. It would had to have been HP or a bank loan.

The senior colleagues who pay 40% tax do lease cars through our organisation and it’s really cheap as it’s salary sacrifice, but my salary isn’t high enough to benefit. I’ve done all the maths and am better off buying a 3yo car cash and driving it for 8-10 years. That will get dc through uni then we’d downside.

Back in 2010 my wife & I looked at a new Kia Rio, just as we were looking they hiked the price so we bought a 2.5 year old CRDI with 25K on the clock for £6250 (I think).

It now has 152K on the clock the bodywork has a few dents and the kids smeared suncream on it which hasnt done the paint much good but like Old Man River it just keeps rolling along.

Middle Son is 16 in September so hopefully it will last a few more years so he can learn to drive on it

PCP maintenance packages often don't, but lease maintenance does. We had a soda superb on lease a few years back and went through about 7 or 8 tyres in four years (v high mileage, 40000 a year) and at least 2 of them were due to hitting a pothole. Replaced no questions asked.

That was lease though, pcp is different.