To ask how much you spend on car pcp p/math?

[Springiscoming20]

Need a new car (new to us) and for the first time we are tempted to buy a car on pcp rather than save and buy something outright. Just curious really what car you have and how much you pay.thank you

In my view PCP is only the best thing to do if you intend on changing your car every 3 years (or however long you take the term for)
If you prefer to change your can less frequently then HP a better option
And if you want to go for the lowest monthly cost, PCH (leasing) probably better but be wary that you will not own the car, and you (usually) cannot get out of the repayments early whereas with a PCP you can swap out half way through (eg if you lost your job or wanted to downgrade/upgrade for any reason)

PCP is like renting a home. You never own it and continue to pay quite a high rent despite never owning it. However, you never have to do maintenance and when you are tired of the house, or it's getting a bit scruffy, you can move easily to a new swish home. Buying a home on mortgage, means you eventually own that home but it needs maintenance, decorating, new kitchens and so on.

The only difference with a car is that a car, once you own it, depreciates in value and is eventually a piece of scrap metal.

If you can easily afford it PCP is stress free, lovely new car and no worries about having a big outlay to buy a new one once it becomes a pice of expensive scrap metal.

I went HP. 64 plate Sportage with average mileage I pay £180 a month.

I paid outright and negotiated £1000 off. Wouldn't ever do pcp, use hp if you need to borrow then you own the car

@VinylDetective

At the end of my 3 years hp I owned my car, it's still going strong 8 years later and only spent minimal on repairs (normal stuff like brakes and tyres plus an exhaust and clutch after 10 years)

I researched it and got an almost new Mazda cx3 instead. Loan via zopa.

When the term comes to an end, or you decide you want a change, you can go to another manufacturer if they have a car you like. I’ve been with four different makes and models.

To get the same car but keep replacing it with new models would cost at least double. Is it really worth it? It's just a car. No one is impressed by what you drive hmm.

It’s worth it for me, I’m impressed by the car I drive and that’s all that matters to me.

I wouldn't do it at all.

Pcp cars are rip offs. You're forced into a contract stating if you go over the mileage you're fined for it. You don't own your own car. Any services/fixes have to be done by the garage and they are extortionate/done wrong. Services at these garages are usually shite to be honest, you're lucky if you get an oil filter change.

I'd get a loan and buy a second hand car and actually get the option to choose what garage I want to use. I certainly wouldn't be letting cowboys like Arnold Clark fix my car.

PCP and hire purchase work well unless something goes wrong in your life and you can no longer afford the payments, it is not just a case of ‘handing the car’ back and finance companies will expect the outstanding payments, often thousands of pounds back

That’s true of leasing but not HP and PCP. You can sell the car and then you’re liable for the difference between that and the settlement figure. If you’re early in the agreement then you’ll likely be in negative equity but that decreases the further you get through the agreement. Once you have paid 50% of the total outstanding you can hand the car back with no negative impact to you or your credit rating, this is particularly useful with HP it’s called voluntary termination and is often encouraged by dealers.

Pcp cars are rip offs. You're forced into a contract stating if you go over the mileage you're fined for it.

The mileage only really comes into play if you’re handing the car back at the end. If you keep it or part ex it the excess mileage charge is irrelevant. I’d bet a lot of people trade in well before the end of their contract so it doesn’t apply.

If you buy a 3 month old/ used car from a dealer will still have 3 year warranty, and get a personal loan it will work out so much cheaper than any car finance option and it will be yours!

I bought a £28k car Worth 38k new only had 25 miles on the clock, 3 months old lots of bells and whistles, haggled loads of extras.
borrowed 20k deposit of 8k
Loan costs £359 pm for 5 years
Interest totals £1k interest rate 1.9%

I have a Hyundai i20, £214 per month for 4 years. That payment includes 3 services and the first MOT. It will go back at the end of the 4 years and we’ll start another one for the next car. I don’t do many miles so the mileage limit isn’t a problem for me.

I’ve always bought my cars this way and handed them back with the money going towards a new car. This year was different as our contract ended in the middle of lockdown and we didn’t want to pay the balloon payment to keep the car so the finance company had to come take the car away and we had to start from scratch for the new car once the dealerships reopened.

The mileage only really comes into play if you’re handing the car back at the end. If you keep it or part ex it the excess mileage charge is irrelevant. I’d bet a lot of people trade in well before the end of their contract so it doesn’t apply.

It still counts if you hand it back early to exchange. You've been tied to doing say 10k miles a year, if you've gone over that you're fined for it. If you want to buy it, you've got a deposit to pay at the end for it, which is OK if you have a couple of grand lying around, but a lot of people get these schemes because they don't have savings. The point of the scheme generally anyway is to stay on it and exchange your car for a new one every few years. But due to that they want a car at the end of it that they can sell off and doesn't have a lot of miles on it. If you want to up the mileage per year, you pay extra for that obviously.

you really need to get down with a calculator.
what do you need the car for?
if for work in any shape or form you need to consider that as that might make a lease more expensive.
do you really need a car?

our car finished earlier this year. was old and getting to the 'too expensive to repair' phase. we relinquished it to the council and decided to go car free for a while.
even renting a car once a month for a day and going on holiday by car for a week a year is cheaper than paying for a car/fuel/insurance/parking...

(we live in a city with great public transport and cycle network though, so I'm aware that this is not an option fof everyone)

Why do you think so many people can suddenly "afford" to be driving round in premium brand cars? We're not all suddenly well off, we've just been cleverly persuaded to part with a bigger share of our income on cars

I had always wondered this. I bought my car for 4k and I've had it for 4 years. It's just passed its MOT but as it's now done 110k miles I don't expect it will last much longer. Will have to investigate pcp/hp.

I've always leased rather then PCP. Much smaller deposit - I paid 3 months up front, one of which was the first month's payment, so the deposit is actually really small. My last one was an £18k car for about £175 a month. Loved the car, so renewed the lease at the end and the monthly price dropped. And again the following year. Then bought the car outright for way less than book price (probably £1500 cheaper). Very happy.

Previous lease cars have always been handed back, but I've negotiated hard on the monthly price and always had really good deals.

I've done PCP a few times. I was doing a lot of miles for work (pre Covid) and wanted to do them in a nice car.
A few things to consider...

You don't necessarily have to have servicing done at the dealership. I had mine done at Kwik Fit which VW were OK with.

Mileage shouldn't be an issue because you tell them how many miles you want, and they calculate accordingly. I do know of people who went for low mileage to keep the cost down, but that's just stupid because they were never going to stick to it. I always take my mileage from previous years and then add a few thousand to give me a buffer.

You're not guaranteed to have equity in the car at the end to use as a deposit on the next car. I have only had this once (of 4 PCP contracts). So don't assume you'll automatically have money to trade up at the end.

I think the dealers make their money on all the extras when you take the car out (service plan, dent insurance, gap insurance etc etc). They give you the hard sell on those, but they can hike your monthly fee up a lot!

I handed my car back in lockdown (I'd done more than 50% of the contract term), as we only need 1 car now. But I'd do PCP again if life ever gets back to normal.

It still counts if you hand it back early to exchange. You've been tied to doing say 10k miles a year, if you've gone over that you're fined for it

Not true at all. If you part ex it then you do just that. You technically pay for the higher mileage in a slightly lower part ex price but that’s no different to having owned the car outright.

If you buy a 3 month old/ used car from a dealer will still have 3 year warranty, and get a personal loan it will work out so much cheaper than any car finance option and it will be yours!

Not necessarily, my DW just bought a new £40k on a 0% PCP. That £40k can stay in an ISA where it will be worth approx £60k after 3 years. That’s the sensible choice.

A few years ago there were good deals out there, but currently everything seems really expensive. We had a (new) Renault Zoe for £129 a month no deposit back in 2015 for 2 y then handed back, then got a yeti for £159 a month no deposit (well formally it was deposit 159 plus 23 payments if 159) on pch, but as there were no decent deals in 2019 and we liked it we contacted bca directly and bought it off them for less than we could have bought same age/mileage/spec for second hand. Win-win.

Don’t necessarily rule out any of the pcp/hp/pch as all of them basically allow you to have a car for a deposit&monthly cost and choose whether or not to keep it at the end if the monthly payments - just shop round for the best deal on a car you like.

I would consider electric again, but the price is just way too high now.

Not true at all. If you part ex it then you do just that. You technically pay for the higher mileage in a slightly lower part ex price but that’s no different to having owned the car outright.

Think you can only do that if your current car is worth more than the amount left to pay. Either way, you've probably paid more already than it would have cost on a loan from a bank. And you get the added bonus of not having to use the dealer to fix your car.

You don’t have to use the dealer to fix the car. I wouldn’t touch the service department of the dealership that I bought my last car from and so took it elsewhere.

With my current car, it won’t cost me more than a bank loan as it’s 0% interest and there a lot of deals around at the moment.

There are so many variables here, most importantly what you can comfortable afford. But I just handed back an Audi a1 which was £250 pcm (both wfh and don't need 2 cars any more)

Where the fuck can you get an ISA that pays 50% interest over two years in this climate? Do tell!
Sorry, spectacularly missing point of thread I realise but I’m one of those who cannot understand constantly paying for something you will never own. So not helpful on here.

“ Not necessarily, my DW just bought a new £40k on a 0% PCP. That £40k can stay in an ISA where it will be worth approx £60k after 3 years. That’s the sensible choice.”

In a cash ISA, that £40k will be worth at best about £40,200 in 3 years. In a stocks and shares ISA you have no idea what it would be worth.

You are seriously deluded if you think you will make £20k profit on £40k in an ISA in 3 years.