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

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

Probably a bad example currently when all bets are off but in normal circumstances I’d expect to be making 15%+ from my stocks and shares ISA. Point being is that if you can finance a car at 0% then you can make the capital work for you.

@Shoppingwithmother

“ 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.

Doable with an equity ISA, under normal financial market circumstances.

Haven't read the whole thread, but just thinking about another lockdown/being unable to work and therefore it will be a large amount of money to find each month, just to keep your car. Owning outright is way safer.

Look for an ex motability car, they are usually 3 years old, low mileage & well maintained. I have a Hyundai Tucson, top of the range, 18 months old. Due to me being ill & Covid, mine has only done 1100 miles, has every extra you could ever dream of, to buy it would have been nearly £30k, in 18 months time it will be on the forecourt for £17k.

I honestly don't understand how all this car finance works...

I'm happy to trawl the car dealerships and pick out a secondhand car. I drive it 100,000 miles (or write it off, in the case of one!) and then get a "new" one!
I've never owned a new car. Just not that bothered. If it's reliable and gets me from A to B reasonably comfortably, that's all I care about. Current car, bought in late 2013, cost me about 5.5K and was 2 years old. Currently about 70k miles on the clock. Touch wood it'll do me for another couple of years, but I am now actively saving for the next one!

£0 old cars owned outright.

PCP is great for people who are going to spend the equivalent on cars anyway and can easily afford. It’s not so great for people tempted into cars that they cannot afford because it seems easy and affordable. Who suddenly cannot afford the monthly payments and cannot afford to be without a car. I would be tempted by an electric car.

DH has PCP on a Toyota Auris estate for £140 a month it was 2 years old when we got it but we extended the manufacturers warranty to 5 years of our ownership for a few hundred quid which has covered everything except the base servicing and MOT costs which are competitively priced at our dealership. Still feels like a good deal even after furlough and redundancy, we'll decide what to do with the balloon payment when the time comes.
I bought my car outright and the dealership were barely interested and horrible to deal with because they weren't making as much commission without a finance deal. They called me a stupid cheapskate on the phone for expecting the car to have all the features advertised and it was my fault for accepting the car at the key handover (in the dark and rain and no other way to leave the dealership).

@VinylDetective

At the end of pcp you have a balloon payment - how a deposit?????

You trade it in for a new one and it pays the deposit!!!!!

How do you manage to have a deposit to put down on the next one?

Ive managed to break even & not owe anything once! On the other 3 cars Ive been in negative equity effectively and owed them money to pay off the last one & additionally needed to put down money for the next one - and that was staying with the same dealer!!

I always over estimate my mileage. Every car I return is well under the contracted mileage. I return them in show room condition. And I’ve remained loyal to the same branch of the dealership for the duration of four contracts now so I’m a valued customer. The only deposit I’ve ever paid was for the first contract and most of that was covered by trade in.

I couldn't keep a car in showroom condition. Too stressful. I prefer buying and driving old bangers.

@Janevaljane

I couldn't keep a car in showroom condition. Too stressful. I prefer buying and driving old bangers.

Me too - less worry about all the "it's only a car" types who pop up if anyone mentions their car got scratched by supermarket trolley or a kid's bike.

@Babysharksmom

Higher purchase is a better option than pcp At the end of pcp there's a balloon payment At the end of higher purchase you own it

Its hire. Hire purchase. Cos you're hiring it until you've paid it off at which point you've purchased it.

£115 a month on a 4 year contract for a VW Up, was 3 years old when I bought it and only 10,000 miles. £100 deposit.

Couldn't afford to get a car any other way and needed one immediately for work

Wow I’m surprised at how much some people spend on their monthly car payments. Interesting thread.

£156 Fiat 500.
I have PCP but when the balloon payment came up I just refinanced. I'd rather have low outgoings than own it quickly.

Mine has a massive scratch down the side and is usually covered in mud. I only mention this because I was interested in pcp but don't think it's for me!

We got a brand new Hyundai Tucson about 3 months ago, love that car. It’s £249 every 4 weeks on motability so slightly different to HCP or PCP. Lovely car though 😂💕💕

@sophoa

We do leases. Not bothered about not owning a car. We pay a small deposit and then currently paying £285 for a Volvo XC40. That goes back next year and I’ll put down another deposit and find another car for a similar amount; I’ll never buy a car outright again

Do you mind sharing which company you lease from? Currently looking to lease a XC40 and this seems a good monthly payment. Was your initial payment high?

I've got a 5 series BMW M Sport Diesel auto including maintenance
It's £410 my dh is getting a new series 2 for £340 incl main

Sorry mines lease

@VinylDetective

At the end of pcp you have a balloon payment - how a deposit?????

You trade it in for a new one and it pays the deposit!!!!!

Not if they deem the car to be in negative equity, which is happening more often due to drop in sales.

They also tell you you can give the car back at any time , also not true.

OP go into it with your eyes open. It is in effect a route to leasing a car you otherwise can't afford.

[quote swishswashy]**@sophoa

We do leases. Not bothered about not owning a car. We pay a small deposit and then currently paying £285 for a Volvo XC40. That goes back next year and I’ll put down another deposit and find another car for a similar amount; I’ll never buy a car outright again

Do you mind sharing which company you lease from? Currently looking to lease a XC40 and this seems a good monthly payment. Was your initial payment high?[/quote]
Leases are generally 3 or 6 months upfront, which include your first month's payment. So if you go for a 3+35, the deposit is 2 months payment and a commitment to 36 months of payments if that makes sense?

I've done it for years. Minimal initial outlay, cheap monthly payments, then hand the car back or extend the lease.

Not if they deem the car to be in negative equity, which is happening more often due to drop in sales.

Then of course you can just hand it back

They also tell you you can give the car back at any time , also not true.

Partially true, once you have paid 50% of the total amount outstanding you can VT it. You can also get out at any point by selling or part exchanging and dealing with positive/negative equity then.

Leasing is much harder to get out of, you’ll find yourself paying something like 90% of all outstanding payments to terminate a lease.

@VinylDetective

If the balloon payment is £15k , taking out another PCP deal doesn’t equal a deposit of £15k off the next car ( yep, I actually thought that! )

It would be easy to think that but I know it’s not the case! I’ve been happily driving new cars for about eight years at 0% interest and with no deposit. I don’t take any depreciation hit and never need to MOT. It’s worry free so it suits me.

You take the full depreciation hit with PCP, that’s how it works. The monthly payments cover the depreciation, and then the remaining value of the car at the end of the term belongs to the finance company.

Also why do people concentrate only on the monthly cost? You need to look at the full picture - deposit, balloon payment and length of the agreement as well as the monthly payments. For example £120 a month for 5 years with no deposit works out cheaper in total than £100 a month for 5 years with a £2000 deposit.

Each to their own, but paying a continual car payment for ever more doesn’t appeal to me.