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Original poster

Cars. Buy £3000 car or pcp contract?

33 replies

AlwaysSunshine81 · 09/08/2019 21:55

Hi all.
So I have a car that is due to go back next April or I have to pay £6000 ish to the company to keep it. It was my husbands idea and he left me 2 years ago so I’ve carried on with it.
I can’t afford to pay £6000 for it so will hand it back but have recently looked into selling it privately or we buy any car and I would have about £2000 left after paying off the £6000. I don’t really know what to do.
Get another car on a lease type thing. Have 3 children, don’t drive a huge amount of miles. Or save some money between now and April and buy a second hand car but I worry it’ll go wrong etc
I appreciate any advice!

OP posts:
NameChangedForTheDay · 09/08/2019 22:14

I was in this situation last year. £3k for a car outright or PCP / leasing.

I decided that PCP / leasing is like paying rent / someone else's mortgage, realistically I'd never own it outright. Just seemed like dead money to me. Yes, you've a shiny new car and no MOT for three years, but too many cons for me.

Luckily we have an excellent family run car superstore in Bucks, great reputation and a 6 month no quibble warranty, got £500 trade in for my banger that was £150 spare and repair if that. I got a 8 year old Astra with low mileage and full service history.

My DP also got a car from them, touch wood a year on and we love our cars, no issues. Passed their recent MOTs no problem.

But do be careful if you decide to buy second hand, before finding the car superstore every car I looked at I HPi checked and were either clocked or Cat C/D wrote offs. So many dodgy sellers out there.

PooWillyBumBum · 09/08/2019 22:17

@NameChangedForTheDay what’s the name of the family run superstore.

OP, buy one for cash, then pay yourself a PCP payment every month. In a couple of years your current car will still have value left in and you can then get a slightly better one with the residual value + savings, rinse and repeat.

Bettyboopityboop · 09/08/2019 22:20

Hmm this is a difficult one. If you buy a used car, prioritise low mileage and a newer model. You don't want to be stuck with a lemon that will end up costing you more than a PCP. If you can keep your expectations low as far as the car you want, then buying shouldn't be a problem.

NameChangedForTheDay · 09/08/2019 22:21

@PooWillyBumBum it's Saxon Bridge. Very good reputation locally. Really chuffed with them. My gearbox actually started to go after buying the car, they fixed it, no quibble. Really good job.

www.saxonbridge.com/

GinQueen23 · 09/08/2019 22:22

Both my cars have been second hand ,first needed a lot of work but my family are mechanics. The second car has had very little issues a new tyre here and there and that's been it .

I would never pcp a car it feels like a waste of money .

Genevieva · 09/08/2019 22:30

We have only ever bought secondhand cars outright. Never done pcp. However, I think there are two advantages of pcp

  • you have a known fixed outgoing that covers everything including anything that goes wrong
  • cars are depreciating assets, so the advantages of owning a house don't really apply to cars.

I have been told that some companies like Mercedes over manufactured and there are now some very good deals around, so if I was looking to replace a car, I would look into that before buying secondhand.

Also, we have two cars, a walking great 4by4 and a tiny little granny car. I love the little one. It uses almost no fuel. The annual road tax is zip all. If it wasn't for carting around musical instruments and dogs, I would never drive the big one. I don't know what your needs are, but I bet you can buy something small and efficient for under £3K.

PooWillyBumBum · 10/08/2019 08:42

I don’t think PCP helps with depreciation at all. That’s exactly what you pay in a PCP. Then you’re offered to pay the residual value at the end of the term.

My stupid PCP expires soon and I’m going to take NameChanged’s advice and go to Saxon Bridge today!

Foreverlexicon · 10/08/2019 08:56

I’ve only ever bought cars outright.

Around £3000 for the first one which lasted me 5 years and only broke down once. I only sold it because I received an inheritance and it was a kind of now or never to buy my current car as I love it but don’t like the new model so if I waited then I would only be able to get higher milesge verskond.

So I bought that for 6.5k, change of job means I’ve put a lot of miles on it in the past 4 years. It’s now 14 years old, has clocked over 100,000 miles and sailed through its last MOT with only a broken brake light. I love it.

Applejack5 · 10/08/2019 09:03

Be careful calculating what your trade in value will be... It may well be less than your predicted £8k by April.

If you like the car and want to keep it, it might be worth taking out a low interest bank loan over a couple of years to cover the £6k. At least you know it's a decent, well looked after car as you've had it from new, and you'll own it outright after the loan is paid off.

NameChangedForTheDay · 11/08/2019 09:49

Did you go @PooWillyBumBum?

Towerofjoyless · 11/08/2019 10:11

OP I did something similar to what Applejack is suggesting. I owed £5k on my little Polo which I was keen to keep, so took out a bank loan over 3 years and been overpaying where I can, it should be paid off about 6 months early (April next year).

Original poster
AlwaysSunshine81 · 12/08/2019 20:39

I went to Suzuki today and went through my option. I can keep my car and they will re finance the £6000 balloon payment.
Or I can get an ignis for £190 or swift for £160. Tempted to keep it

OP posts:
Applejack5 · 12/08/2019 21:50

Check the interest rate they're offering for re-financing though... when I looked into this once near the end of a PCP the finance company were charging 8.9% to re-finance the balloon payment, whereas a personal loan through my bank would've been about 3.6% and more flexibility on the term.

domton · 12/08/2019 23:00

I don't understand this pcp thing. Does no-one do hp anymore? I had my car with 6000 miles on it and paid 190 a month over 5 years. Finished paying it off 2 years ago. It has 110,000 I the clock give or take, and I expect to get another 2 easy years out of it, as my annual millage has dropped a little. I paid 11,400 in total. Currently averaging at £135 a month, and hopefully if all is still well in two years art just over 100 a month. Had it from new, know the history, barely spent a penny on repairs (£200 after last mot).

I understand wanting to buy a car outright. Totally. I was always a little scared to do this, as I live in a rural area and drive a lot, always alone. I liked the (hopeful) security of a newer car. But pcp??? Pay a fortune to never own anything, and have to start the whole thing again? I don't understand that.

smartcarnotsosmartdriver · 12/08/2019 23:06

I was also coming to suggest HP. I got my first car last year on HP, payments slightly higher than PCP but not horrendous. Car was a year old, when it's paid off I'll own a 4 year old car outright to do as I please with.

TiddleTaddleTat · 13/08/2019 12:27

I've just signed up for HP on a 2.5 yo car. Funded half in cash and the rest spread over 2-3 years in affordable payments.
There are pros and cons to HP, PCP and buying outright. The vast majority of cars are bought on finance these days. But I totally understand wanting to own something and would have bought outright if I could afford it (always done this before).
If you are not totally reliant on the car day to day (as I am for work) I would probably buy outright with your budget. I have always done this in the past and put aside £100 a month for repairs and servicing which is inevitably more for an older car.

AnathemaPulsifer · 13/08/2019 12:34

We Buy Any Car (and similar) will reduce their online offer by loads when you actually take it in for them to see.

AnathemaPulsifer · 13/08/2019 12:35

Check out loan prices from elsewhere, likely to be cheaper than refinancing through the dealership.

SansaClegane · 13/08/2019 12:35

alwayssunshine rather than re-financing through the dealer, get a loan from your bank. It will most likely be cheaper and car dealers really rip you off on finance.
Agree that it's a good idea to buy the car you have, you probably won't get a decent reliable car suitable for 3 children on possibly £2K (also agree that the valuation might change a lot between now and April; and you never get as much as you think when selling).

PookieDo · 13/08/2019 12:40

I’m in this situation

I own my car outright, it’s 7, but I am going to lend it to my daughters for a couple of years as they will learn to drive then eventually sell/scrap it

It is only worth £800 at a push and I don’t have any savings. It’s old now and starting to cost more

A PCP deal I was looking at with Mercedes (smart car) was only 2% APR, set fee of £169pm and then just hand it back at the end and get a new deal. I am tempted to be honest. The problem with having an old car is that you are stuck with it (and all its flaws) and have to go through the rigmarole of getting a good price on it, scary services and MOT’s each year. Whereas even on finance the APR isn’t 2%!

PettyContractor · 13/08/2019 12:41

I think keeping the car you have and financing it is the best option, but see if you can borrow £6000 cheaper the financing option. (I'm assuming the finance APR is reasonable, will change my mind if not and you can't borrow elsewhere cheaper.)

Once it's paid off you hill have a car that should last you another several years, with no payments.

smartcarnotsosmartdriver · 13/08/2019 12:45

@PettyContractor I have a smart on HP and don't pay much more than that edited by MNHQ by OP's request

smartcarnotsosmartdriver · 13/08/2019 12:45

Sorry that should be @PettyContractor

PookieDo · 13/08/2019 12:47

Is that smartforfour?

PookieDo · 13/08/2019 12:49

I think my issue is that I have always been stuck with owned cars I hate. I hate my current car with a passion not because it’s old but it’s just a cheap crap car. Its got me from A go B with a backache and no air con. I hate it when I take them in and have to wait to see the verdict on the unknown state of their internal workings. The only car I ever loved was a Ford Focus and the head gasket went and I couldn’t afford to get it repaired