To ask your opinions on PCP when buying a car?

[Enigmasaurus]

We’re looking to change our family car. I started another thread asking about types of cars for 3 car seats etc.

Our budget is in the region of £25-30,000. Most dealers now offer a PCP finance plan. I’ve only ever bought outright or via HP before. PCP seems to me a bit like an interest only mortgage (monthly payments, never owning the car).

Am I just being silly? Has anyone had a bad experience with PCP? Or am i just late to the party?

Wear and tear's fine, damage to bodywork is the issue. When my first one went back I paid £50 for Chipsaway to get rid of a scratch, they didn't even look at the bloody thing!

And of course 0% finance is exactly that, the price of the car is exactly the same as if you paid cash.

Fair wear and tear is fine. I'm not one for Valeting my car regularly (or at all!) and I've never had a problem. Minor chips/little scratches have never been an issue when I've handed mine back. If you've crashed the car and there's damage then you'd need to get it repaired.

As an aside, can anyone recommend a leading company? I'd be quite happy to lease but I've never found it to come out much/any cheaper than a PCP.

And of course 0% finance is exactly that, the price of the car is exactly the same as if you paid cash.

You normally get money off if you pay cash though.

I’ve seen lots of things advertised as 0% when actually the amount you pay on finance is more than you pay if you pay upfront so all they’re doing is frontloading the interest they should be charging you.

You’d only know for sure I guess if you asked what they’d sell it for if you were to pay 100% today. If it truly was the same price then yes it’s 0% but that would be surprising.

[...] which may affect whether we’d get what we’re expecting at the end of the 3 years

I may have misunderstood, but this reads like you expect to get some money returned to you at the end of a PCP agreement. Sadly, you don't. Both the deposit and the monthly payments are sunk costs, regardless of how you look after the car. It's not like renting property in that way. The best outcome is usually that you get to hand the vehicle back with nothing more to pay.

Sorry plausible I meant that we may not have much / any left in hand as part of the trade for a newer car. I know we’ll get no cash back (I wish!)

Ahh, I see what you mean. I misunderstood, sorry.

@Theknacktoflying - I hope you're not in accounting! An asset that depreciates is still an asset. If I spend ten grand on a holiday, I have nothing to show for it a year later but memories. If I spend ten grand on a car, I can sell it a year later - I won't get ten grand for it, but I'll get a decent fraction of that. That makes it an asset!

I think what you meant to say is, it's not an investment...

"You need gap insurance for a pcp car but not a lease."

More uninformed bollocks.

I've had several cars on PCP and never once bought GAP insurance.

I think GAP insurance is generally advised when taking out a PCP although it's not compulsory.

You can get it cheaper than the policies sold by the dealers though so it's worth shopping around for it.

Cars are only an investment if it’s a classic car I guess. 99 percent lose their value the minute they are off the grid! It’s been made that we need them - everything is geared up for cars. I do admire people that live without one tbh but we couldn’t !

I have 0pc finance on my car pcp. I could have bought it for cash at x price but they offered me the pcp at the same price thinking I would upgrade in two years. I won’t. I’m not interested in another new car. So for me it’s two years’ interest free loan - and I’ll pay the balance at the end

The only issue for me has been the insurance company’s inability to understand how to deal with the pcp details. Under a pcp I am not the owner and they seemed to find this impossible to understand

I have had 4 PCP's and have always been registered as the owner. I think if you lease then you wouldn't be? Must be some variation on that point.

I had a PCP on my Mercedes and got stuck towards the end of the 3 years with the mileage. I also got stung on returning it for
4 new hub caps. That annoyed me as Mercedes were wanting a near perfect car returned rather than one that was 3 years old and had done 36,000 miles.
So the next car I got, I bought. Downside was that even though I was buying it in cash outright, I didn’t really get a good deal as they were only interested in selling via PCP. They also weren’t interested in buying it off me 3 years later when I wanted a change. So that annoyed me. With the car I have now, it is on PCP as that was the only way they would give decent discounts off the purchase price. I’ve over estimated on the mileage and know to get my hub caps done in the garage down the road before I return the car, rather than pay Mercedes prices.

I've just got a new Qashqai on PCP and I'm the registered owner, can get a new one after 2.5 years, got a £750 deposit contribution and £2.5k cashback.

Happy with that

Backingvocals - you should be the owner if you have a car on PCP so you must have something different. Insurance is no issue at all.

Our car registration and finance are in my husband’s name but it’s insured for me as I’m the main driver - the policy just states I am neither the owner nor registered keeper.

Who owns your car?

Thats a silly amount of money for a car if you have to finance it or pay for it monthly. My advice , Buy an ex mobility car at auction . You’ll get a well maintained car for considerably less than buying the same car off a dealer . We paid £7000 for a 3 year old Toyota verso almost 7 years ago . It’s still going strong and I have no plans to change it in the foreseeable. Toyotas go on for ever .

also you don't have to buy via the dealers pcp - there are independent providers that will give you a better deal

It depends how much you choose to pay each month and how much deposit you put down. Our car is still on target to have equity in it after our three years. But we do have a campervan too.

Purple I think I agree with you (which is why I’m not sure about the PCP option). I’d prefer to buy outright or take a small personal loan if needed.

Our choice of cars is limited unfortunately due to needing 3 wide isofix seats to fit (and that’s assuming no more kids). We’re looking at either the WV sharan or the Audi Q7 in all likelihood. I’d love to find one cheaper that’s not too old!

As pp has said, the dealers are pushing PCP hard at the moment. We hadn’t considered it at all until speaking to some - and are just trying to figure it all out. My preference (I think) has always been to buy outright if possible

• VW Clearly a day at the dealerships has made me lose it a little

I can't see how it's better to do PCH/ PCP than buy a nearly new or pre-reg car on a good deal, but maybe I'm missing something?

Everyone I know doing either of the above is paying £300 a month or more, plus extra at the beginning, for say 3 years. So let's say that's £10-11k total.

If I buy a £15k car, in 3 years it's still going to be worth £5k worst case, probably more. Pretty much all cars come with 3 year warranty. So surely that's better? That's how it seems to me but like I say maybe I'm missing something!

According to the pcp finance people legally they are the owners. According to the insurance company I am. I did look into it quite extensively at the time but the industry seems confused.

VelvetSpoon - it’s not that expensive! We pay less than half that a month for a £17k car on PCP. Our old car was the deposit.

If you pay £15k outright, you have your £5k car at the end of three years.

If you pay £5k outright, £5k over 36 interest free payments and £5k at the end, you still have a £5k car.

It’s not actually costing you any more - you just spread the cost.

Backingvocals - You’re over complicating it, you are the owner.

Same here Helly I'm paying £150/month for a brand new one, used old car for deposit