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 😂

Never own a depreciating asset, is what I was told.

I have an EV via NHS. Includes all costs except charging and it’s a bargain!

I went to do this too. There are some really good savings for blue light holders on cars. It's definitely worth looking.

I actually went to the local dealer to test drive the car and they asked about the deal and then actually beat it, not by much though but every little help. Ended up getting a £23k car for under £18k - this was back in 2016 though.

We bought a 3 year old car in 2014 for 9k and it’s now getting to the point we want to replace it. I can’t get my head round pcp or a loan for a depreciating item so we’ve saved and have a pot of money to buy another 3 year old car. Because of the size we need (family of 5 with 3 teens) they’re expensive so we’re holding off as long as we can. I did research lease cars by agree they’re expensive and I just cannot justify it.

I’ve been told this too, but my friend pays a lot more than me for his lease car than my owned car per year driven so that makes no sense as a statement. I guess it’s a good line for the dealerships.

If you can't afford £400/month for a car and your kids are likely to want to go to uni, you'd better start thinking about how you're going to fund that too, with a £400/month top up per child being on the low to average side I would say. Life is stupidly expensive these days - cars, homes, bills, kids 😥

I’ve had PCP before and loved it. I didn’t need or care to own the care outright and every 3/4 years, you swap it for a new one. Also don’t need to deal with repairs etc most of the time. No biggie for me and worked well. Max I paid was £300 per month

Years ago a young graduate at work had a brand new fancy Golf. He was paying more for it per month than DH and I (10 years older and several grades higher) were paying for our mortgage for a detached 3 bed. Some people are just stupid with money.

We are high earners, like new cars, no children and like our savings in our high interest accounts, our PCP rate is lower than our savings rate so it shouldn’t be too difficult to work out which is more financially beneficial! We could purchase both cars outright if we wanted to but why lose that much interest 🤷‍♀️

@TeenLifeMum it's hard to compare though, we have one car fully owned and one newer car on PCP, PCP obviously costs much more generally, however, our older car now has 70,000+ miles on the clock and is fast approaching 10 years old, we paid out over £1500 in repairs last year. People paying PCP are usually doing so for the peace of mind of fewer car bills, that in it itself has value. We couldn't have afforded the newer car if we needed to pay cash, we accept we pay more for the newer car via finance and the 'newness' of the car, but it's a cost we are happy to pay, a bit like a cleaner, we happily pay a cleaner so we don't have to clean as much ourselves, for others that would be a waste and they'd rather pocket the money and clean themselves. People put different values on things.

The last car I had on pcp had £4K equity in it at the end of the deal so I made money on it. I was shocked!

I'm fascinated to know where people bemoaning new car owners think their 10 year old [insert car make here] would have come from for them to piously purchase, had some simpleton not bought it new?

Should we just have the same 100,000 cars going round in decreasing spirals until they die and a government agency for assessing worthy new car release, issue a new one?

Be happy that someone's generously taking the hit (and enjoying a new car under full warranty for 0% apr) in order for you to line up your next worthy banger.

Had I bought the same vehicle at 18m old, it was only 5k less and I wouldn't have qualified for 0% credit. Also full warranty and my own spec. Seemed a no brainer.

I'm quite happy with my PCP deal (on a brand mentioned by OP). It's not £400/mth but it is hundreds. I got exactly what I wanted rather than compromising based on what was available in used, servicing etc. is included in the package and I have a new low mileage car that has none of the issues or costs that come with older or higher mileage cars.

I've taken personal loans to buy second hand cars before and this is no more expensive, but for a brand new car.

This is my first PCP but I will almost certainly have another at the end of my deal. My previous car was owned outright after finishing off a personal loan, it was still fine but getting to the point of needing money spent on through age, and wear and tear. I couldn't afford to buy an equivalent nearly new car outright so would have had to take another loan, and if I'd waited until I'd saved the money I'd have potentially accrued those costs of an older car anyway.

One of my cars is worth about 50% more than I paid for it 19 years ago. It depends what you buy and how you look after it.

Exactly my feelings

I'm fascinated to know where people bemoaning new car owners think their 10 year old [insert car make here] would have come from for them to piously purchase, had some simpleton not bought it new?

Spot-on, and really made me laugh!

And if you leave your employer it will cost £££s to get out of.

The last car I had on pcp had £4K equity in it at the end of the deal so I made money on it. I was shocked!

This will happen to us, well not technically "make money" as we'll have paid a lot of interest I guess, but we'll have a good value asset at the end. We have a special version of a car that doesn't quite maintain its value but it depreciates much slower, they stopped making it and low mileage versions of it will fetch close to its original selling price. Itll be worth far more than the balloon payment, so we will pay the balloon payment and if I have my way sell the car and have a substantial sum for the next deposit (DH will want to keep!)

most people cant afford them and default and massive penanaties ensue

One of my cars is worth about 50% more than I paid for it 19 years ago. It depends what you buy and how you look after it.

Come on that's pretty rare as you know, in my previous comment I've just said we'll have a good value asset due to the version of the car (my husband insisted on....) buying, but most cars are bog standard and have a lot of miles put on them.

most people cant afford them and default and massive penanaties ensue

"Most"? Stats for that?

We bought nearly new last year £26k.

£11k was saving from the last time we bought a car (10 years ago).
£15k in a 0% interest loan over 5 years. = £250/month

We will be saving a min of £100 month towards the next new one which hopefully won't be for another 10 years.

So £350 a month on personal loan and saving for next car ? That's slightly more than my monthly PCP payment, only slightly but still. Unless you're buying a used car outright which given prices of decent nearly new cars now isn't practical for many I don't think PCP is so much more expensive as people think.

Quite. If you know what you’re doing you don’t have to own a “depreciating asset”.

What job? Landlords.(Decent).
Car - 70K.
Retired.

So you paid nearly £17k for a Ford Focus?!