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 😂

Simple. I don't. The prices are ludicrous.

The one time I had a 'new' car I bought an ex-demonstrator having saved up for four years. And actually after I'd been driving it a few weeks, it didn't feel any different from any other car I have owned.

I usually buy 2-3 year old cars with 15-20k on the mileometer, from a main dealer. Cost is usually half the retail price. I then drive them for 10 years before selling them on. Typically £1200-£1400 capital cost per year.

Pcps have gone up so much in the last 6 years. We used to pcp but we found leasing cheaper. Also don't go to the dealers, do it online. We used nationwide lease and were around 200 a month less than the dealers

Same. Plus the little car I do own every year end up paying hundreds to get it through its service. I'd rather go without something and get a reliable car. The family car is leased. Once we can afford ot, I'll see my little one and lease another. I jist view them like another bill i pay a month, like council tax etc.

We have a blue light card so we bought through a specialist company which offers fleet discount. So bought a brand new one for about 20% off the tag price

I think a lot of people get them through work, so it’s from pre-tax salary

I find it interesting that people obsess with the ownership side of a car, honestly couldn't care if I owned the car or not, it's not an appreciating asset like a house. I just want something that works, is reliable and comfortable, happy to pay a monthly price for that as I do for any other bill, the peace of mind especially.

I pay £193 a month for a 3 year old Dacia Duster on hire purchase. Absolutely no way I'd do PCP. It's double if you shop around and get the best possible deal.

We bought a new car and used PCP, I wouldn't recommend it or do it again.

We bought brand new from the show room and put down a decent chunk off the total which left us with monthly payments of £350.

We're in a good position financially, our income is around 200k p/y, but I still think it was a bad decision on our part.

We didn't need a brand new car, one a few years old would have done the same job and we'd be thousands better off now.

There is actually more wiggle room on new cars, as opposed to used cars.

My first car on PCP was a brand new Citroën C1, I paid just under £200 a month, no MOT, tax etc as it was new. I then got a Mini Clubman, 2018 plate, paid around £250. I now have an SUV Jaguar (baby on the way) and I pay just under £400 a month.

Me and my OH share one car (I need one for work, he doesnt) so between us, it's not that much. I work for the NHS and my OH has a better paid, corporate job. We won't own the car, nor would we want to, when we've paid enough we'll exchange it for something different. I like the reliability, the roadside assistance, the safety of the car etc. I don't like the Jaguar Land Rover dealership we got the car from, so definitely won't be going there again!

We don’t have PCP but a an unsecured loan for £355 a month - the car we have, which is a ‘nice’ one, is worth more than we owe because we saved a decent deposit. Only my husband works and is on around £60,000 but we live in the North East and our spacious 3 bed semi with good front and back gardens only costs £490 a month mortgage and hasn’t long left on it.

I agree with this. It's much better to get a loan and start paying it off to be owned by you at the end of it Bit like having a mortgage as opposed to renting. Next time we get a newish car I will get a loan for about 10k and pay off over five years. Hopefully can get something fairly low mileage for that money and still be good in five years once it's paid off.

We both have brand new cars but it’s largely down to our circumstances.
I earn £70k and have an Audi A1 which I pay £280 a month for and DH earns around £55k and has a VW Polo which he pays £180 a month for.
However, we have no kids, aren’t maxed out on our mortgage and are still able to save around £1700 a month between us so it’s very affordable.
DH has been driving VWs on PCP deals for about 10 years now and has never had a single issue or breakdown. He works long hours and has a long commute so it’s worth it for the peace of mind.

I will say though, these were not the prices we were originally quoted. We’ve found that dealers have a lot of wiggle room on new cars so definitely negotiate as much as possible. I was negotiating over the monthly fee for my car on the last day of the quarter so I knew they were desperate for the deal. They ended up paying my road tax for me and threw in a holiday voucher even after dropping the price so don’t settle for the first number they come up with.

@ontheflighttosingapore at the end of your loan your car will be worth a fraction of what you paid so it's not the same as renting and buying a house, but will have paid a substantial amount of interest. PCP you don't have to hand the car back or pay the balloon payment, you can settle the finance and trade it back in, many do this to have a newer car whilst keeping payments more manageable.

I've done both, wouldn't say one is especially better than the other tbh.

Isn't that still over 18k for a six or seven year old car ? Seems a lot

My X1 was £550 a month. Simple answer of how I could afford it is I wasn't paying £1500 a month in nursery fees. No new car for me until the kids start school.

I just see it as a waste of money. In 5 years time the car will still be fairly new and worth quite a lot as I don't do many miles and will look after it. I will keep it for another 10 or more years so won't have any payments other than maintenance costs. I'm sure that works out better financially that keep paying a big monthly payment all the time

Having had a 7 year old Skoda (always serviced by the book etc) with only 43,000 on the clock blow up on us whilst driving over a bridge and set
on fire, we’ve been HP’ing cars ever since. It’s great- they are under warranty, no MOT to worry about. Free breakdown for year one. We swap every 3 years. Currently on a VW 7 seater. It’s a 72 plate. £283 per month. I can hand in the keys whenever and the 12,000 miles per year is more than adequate.

We were paying around £400 a month for my husbands BMW, but for context ouR HH income is around 130k per year and after mortgage and bills go out, we have around £2000 ish disposal left over (not including food because our month to month costs for that vary so wildly.

I could use a car upgrade, and looked at getting a new Peugeot 208 recently, but finance was coming to £300ish a month. Which whilst I admittedly spend that much a month on more frivolous things (Botox, ozempic, spa days etc), I don’t really want to commit to having to have that much come out every month when, if I’m honest, I hardly ever drive.

After years and years of leasing brand new cars we decided to get a bank loan and buy a three year old low mileage car and drive it until it dies. We got a three year old A class Mercedes from Big Motoring World with only 7000 miles on the clock. It's lovely and it's nice knowing it's our's. At the moment it's costing a bit more a month than our last lease car but we are looking forward to when the loan is cleared and we will carry on driving it around with no monthly loan payment.

Some people have a 'car allowance' built into their salaries. I do. It's £400 a month and I think that's standard? I'm required to have a vehicle and it has to be less than a certain age and fully serviced and insured for business use.

I did the PCP thing as I needed a car quickly when my last one broke, that was about £450 a month, I paid £6k as the balloon payment (I kept saving the money so it was there) and the car's mine now.

@ontheflighttosingapore yes I suppose if you're not putting much mileage on it that's different.

The depreciation on a new car is horrifying. You are paying for the prestige of having a new car. Is the model you want not available used?

I never buy expensive cars because they don't make money they just depreciate in value.
I'd sooner spend the money on property or antiques.
I just buy middle of the road Fords or something like that.

If your budget is £200 a month then this equates to £15k over 8 years on a personal loan at 6.5%

you can get a 3 year old merc a class for that, hopefully it’ll keep on going for that long but if not you sell and do the same again.

or you save and just buy what suits but PCP is largely an expensive way to do it.

We have a new VW T-Cross that we pay £300 a month for. That's less than 10% of our monthly income, so the answer is simply that we have enough money to afford it after we pay our bills.

Aside from that, we got a very cheap deal on the car so that's why we considered a new one rather than second hand. Ours is a 2019 design and they were selling off the last ones from the factory before they switched to making the 2024 design. So the dealership put a lot into our deposit, reducing the monthly payments significantly.