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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To ask your opinions on PCP when buying a car?

64 replies

Enigmasaurus · 03/05/2018 16:21

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?

OP posts:

Backingvocals · 03/05/2018 20:36

I’m not over complicating it. this is the legal position

hula008 · 03/05/2018 20:47

If you want a new car, it’s a good idea. I would make sure you fully understand it before taking it out though. You are borrowing the amount of the car less any deposit, with a balloon payment at the end. You can also choose at the end to sell your car back to them at the Guaranteed Future Value they give you when you take it out, but this is dependent on the car being in reasonable quality at the end of the term.

Make sure you give an accurate representation of your mileage so you don’t have unexpected bills at the end.

And get gap insurance - most people will never use it but when someone goes into the back of your year old car and writes it off, and it’s not worth the amount left on the finance - you’ll be grateful

KinkyAfro · 03/05/2018 20:56

You have 3 options 1) return the car, 2) pay the balloon payment and own the car and 3) use it as a deposit against a new one in 2-3 years

Queenofwands · 03/05/2018 21:05

You can get a great deal on a lease. Hassle free and have done this for last two cars. Doesn’t attract VAT I understand which is why it’s a good way to buy a brand new car. You can get a basic small car for 100 pm and a nice car for 200- 400 pm.

Bluelady · 03/05/2018 21:06

Only a complete idiot wouldn't bother with gap insurance - your car could get written off the moment you drive it off the forecourt.

Theknacktoflying · 03/05/2018 21:08

pants - that’s what I meant ... sorry!

I just remember reading an article and advisor said a car was an expense ...

Sinkingswimmer · 03/05/2018 21:29

Backingvocals I have extensively researched car ownership for insurance purposes following the theft of our cars. They were meticulous in their detail prior to paying out so I always make sure I am too (they woll try to find any way to avoid paying out).
Insurance companies consider cars on PCP to be owned by the person who's name the finance is in, not the car dealership/manufacturer.
It's worth noting that the registered keeper can be different to the 'owner' even with PCP but make that clear to the insurance company as they often refer to the 'registered owner', which isn't a thing

guessmyusername · 03/05/2018 21:29

I have a car on PCP. It is interest free. I intend to keep the car beyond the 3 years. In total it will cost me EXACTLY the same as if I had bought it outright. And I have gained the 0.5% interest that the money to pay the balance has gained in my savings account.

He11y · 03/05/2018 21:44

QueenofWands - what’s the benefit in paying £200-£400 a month for a lease car that I can get for £140 a month on PCP and actually own outright for the cost of the final payment if I so wanted? Genuine question - I can’t see how a lease car is a cheaper way of driving a new car.

Absolutely agree with those who say Gap insurance is a must. Anyone who has a car on PCP and doesn’t get it is a bloody idiot!

BumpowderSneezeonAndSnot · 03/05/2018 21:46

I pay far less for my lease car than I did for the same vehicle on PCP. It depends what car you're after as to which is better

FASH84 · 03/05/2018 21:56

I'm very debt averse I'd rather have an older car that's mine regardless of any change in financial circumstances than any kind of lending on something that only depreciates. A colleague took one of these and then nine months later split with LTP leaving her as a single parent (child had a different dad who's never been around). She then couldn't afford the payments as her household income had halved and when she took it in to exchange it for the cheapest thing they had on the same scheme, they wanted her to pay nearly 4k to downgrade. Her dad ended up bailing her out, she just gave it up, dad paid nearly 3k just to get her out of it, then she had to find the money for an old banger and I mean really old, it breaks down all the time. She used to mock me for my 8 year old suzuki with decent mileage and fuel economy, she doesn't anymore.

tinyme77 · 03/05/2018 22:23

If you have the cash buy your own car. It's cheaper and you don't have to worry about mileage etc. And be savvy when you buy. Dealers have large mark ups. Don't buy brand new. If you can wait go through a broker instead. My hubby did this and saved thousands.

Sillybilly1234 · 03/05/2018 22:57

We worked out that it is worth it for high value cars eg brand new Mercedes and that sort of thing, but not for more bog standard cars eg brand new Mondeo or Corsa's.

Original poster

Enigmasaurus · 04/05/2018 08:11

Thank you for all the replies

Some very useful experiences and views. It sounds like we need to do some number crunching and consider the options.

Debt averse fits me too i think - other than mortgages I don’t really like to have debt if I can avoid it. And I’m not sure that having a new car every 3 years or so is really worth it for the family car

OP posts:

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