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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

AIBU to get this car on PCP?

114 replies

Yummyy · 18/11/2021 12:58

It costs £17000… we have a deposit of around £5000 and pcp payments would be around £200 per month for 4 years. Then £5000 to pay if we want to keep it. We are very likely to be in a better financial position in 4 years time (due to not having to pay childcare anymore and potential pay rises) and will probably just go for a different car.

What are the pros and cons of PCP?

OP posts:
noworklifebalance · 18/11/2021 21:58

@oknowimscared

I’ve always been sceptical about PCP, but have done it with my new car. Because I love it and am confident I’ll still love it at the end of the 0% finance deal. (I’m hoping to pay it off early, which is fine, because 0%, but have set up a monthly transfer to a savings account to cover the end payment, to make sure) (one of the things I don’t like about PCP is it encourages us to change cars every 2-3 years. Which is really bad for the environment. So I won’t be a part of that)
You don’t have to buy a new car, you could buy second hand and someone can buy yours, which will obviously be second-hand, too, so not necessarily detrimental to the environment. Clearly, if you are happy with your car then there is no need.
3luckystars · 18/11/2021 21:59

Sorry I posted too soon, I should have said pcp is a trap if your income is in any way shaky. You will be left with nothing.

SusieBob · 18/11/2021 22:07

Just to illustrate how mad used car prices are at the moment, I've had my current car 2 years, and paid just under 10k for it. 2 years later with 25k miles done, I have a quote from a dealer for 8.8k as I'm considering moving to an electric car.

To only lose 1k on a car over that period of time is utterly crazy. The problem is, of course, that lead times on new cars can be anything up to a year and so demand for used cars has increased massively.

oknowimscared · 18/11/2021 22:11

I’ve always bought second hand before this car. And never thought I’d go near PCP. But it’s working out really well for me. Obviously it depends on individual circumstances, like most things in life. If you can get a 0% deal and save the balloon payment up, I see no problem with it.

oknowimscared · 18/11/2021 22:13

@oknowimscared

I’ve always bought second hand before this car. And never thought I’d go near PCP. But it’s working out really well for me. Obviously it depends on individual circumstances, like most things in life. If you can get a 0% deal and save the balloon payment up, I see no problem with it.
That was meant to be a reply to @noworklifebalance (I’m hopeless at this!)
StillPerplexed · 18/11/2021 22:15

People saying second hand car prices are crazy are overblowing it. I've just been on auto trader now and there are plenty of cars for less than £1k that would run fine. Just do your research and pick a reliable model. Why pay thousands (with interest!) for no reason?

Everything now is payment plans, debts and subscriptions and it's just a way of bleeding yourselves by a thousand cuts. Better to own outright than sign up for future financial insecurity.

SusieBob · 18/11/2021 22:16

@StillPerplexed

People saying second hand car prices are crazy are overblowing it. I've just been on auto trader now and there are plenty of cars for less than £1k that would run fine. Just do your research and pick a reliable model. Why pay thousands (with interest!) for no reason?

Everything now is payment plans, debts and subscriptions and it's just a way of bleeding yourselves by a thousand cuts. Better to own outright than sign up for future financial insecurity.

There is a huge difference for most people between a car which "runs fine" and something they can happily rely on. 1k round here buys you an absolute shitheap.
StillPerplexed · 18/11/2021 22:21

@SusieBob Sure, I can see the argument for paying more for something reliable definitely, but I don't see the argument for getting into debt over it.

ulez · 18/11/2021 22:26

This reply has been deleted

This has been deleted by MNHQ for breaking our Talk Guidelines.

TotallySuper · 18/11/2021 22:26

@StillPerplexed

People saying second hand car prices are crazy are overblowing it. I've just been on auto trader now and there are plenty of cars for less than £1k that would run fine. Just do your research and pick a reliable model. Why pay thousands (with interest!) for no reason?

Everything now is payment plans, debts and subscriptions and it's just a way of bleeding yourselves by a thousand cuts. Better to own outright than sign up for future financial insecurity.

I'd love to see an example of what you've found for 1k 🤣
noworklifebalance · 18/11/2021 22:29

@oknowimscared - I think we see agreeing with each other! I am just saying that PCP can be used to buy second-hand so it’s not necessarily bad for the environment if you switch cars after 3 years.

addictedtotheflats · 18/11/2021 22:33

I've had a number of cars on PCP. All brand new (apart from my current which was 18 months old). I view it as a lease, I don't plan to keep them at the end, ive never put a deposit down as it makes hardly any difference to payments and all been 0% interest. I don't have to worry about MOTs, services have all been with no advisories and I've got peace of mind. I've always had around 2K equity which I transfer to the next car, so kind of a deposit actually. You just need to be careful with damage to the car as if you did plan to hand it back once you have paid 50% of the loan you could be hit with repair charges.

noworklifebalance · 18/11/2021 22:36

What is the advantage of owning a car outright? Genuine question.

We can afford to pay the full price for a car but I’d rather keep the £25k in the bank for unexpected major expenses and hand over £300/month from our salary for 3 years.
I appreciate it’s different if you don’t have that security, in which case that is bad debt.

Welshiefluff · 18/11/2021 22:36

Wow. I am amazed so many people have answers for you. There is nowhere near enough information supplied in your post.

If you earn £50k a year, have few outgoings and drive 15k miles a year then it sounds fine.

If you earn £15k a year, have other expenses and drive the shops and back once a week, then probably not.

3luckystars · 18/11/2021 22:36

It’s an expensive lease though.

StillPerplexed · 18/11/2021 22:37

@TotallySuper okay sure, how about this old Honda Jazz with good mileage, £850:
www.autotrader.co.uk/car-details/202111159591323?advertising-location=at_cars&maximum-mileage=70000&price-to=1000&postcode=SO14%206SG&model=Jazz&page=1&make=Honda&include-delivery-option=on&sort=relevance

I've driven these before, perfectly fine car, deceptively large boot space. Not perfect for everyone's needs, but good for kicking around town in Grin

(I know I'm a terminal cheapskate, but there's probably a nice middle point between my stinginess and having to make repayments on an asset you don't even own.)

3luckystars · 18/11/2021 22:37

The advantage of owning a car is that it is an asset.

Original poster
Yummyy · 18/11/2021 22:38

Thanks for the advice/discussion! On reflection I’ve decided that a bank loan and a chunk from savings would be the best way forward. For £40 extra a month and £1000 extra from savings I will own the car outright at the end of the 4 years.

OP posts:
noworklifebalance · 18/11/2021 22:40

In what way? It will be worth less than you paid for it?

3luckystars · 18/11/2021 22:42

Yes but it is worth something and not nothing. Like paying a mortgage instead of rent.

Mymilk · 18/11/2021 22:42

Agree 100% with @StillPerplexed

The difference is whether you consider aesthetics a necessity. The fact is you CAN get a perfectly decent running car for under £2k. For me a car is a means to drive from a to b. I don't care if it has scratches, I don't care if it doesn't have built in sat nav - as long as it gets me where I need to go, great.

If you're someone who specifically wants a new car with the latest tech/spotless interior/exterior then yes you'll struggle to find something "cheap".

But the point is if all you need is a car that drives you can do it without taking out loans/finance/major debt.

itsanotherfineday · 18/11/2021 22:48

Crazy prices for second hand cars at the moment, in some cases considerably higher than new prices because of the long delay for delivery. Bonkers.
So if you can afford the repayments and can actually find a new car to buy on PCP just now, I would probably go for it.
Although leasing is another option that doesn't require the deposit so might be worth investigating.
No MOT, no danger of expensive breakdown as covered by warranty - very attractive to me

noworklifebalance · 18/11/2021 22:49

@3luckystars

Yes but it is worth something and not nothing. Like paying a mortgage instead of rent.
Ah, I see. I don’t think of it that way - I see it as something of finite lifespan, which will be worth less than I paid for and will eventually cost a huge amount to run. Not an investment for the future.
PandaP0p · 18/11/2021 22:51

If it flies, floats or depreciates in value - rent it.

If it appreciates in value, buy it

Therefore... pcp

OnTheBoardwalk · 18/11/2021 23:01

@SusieBob

Just to illustrate how mad used car prices are at the moment, I've had my current car 2 years, and paid just under 10k for it. 2 years later with 25k miles done, I have a quote from a dealer for 8.8k as I'm considering moving to an electric car.

To only lose 1k on a car over that period of time is utterly crazy. The problem is, of course, that lead times on new cars can be anything up to a year and so demand for used cars has increased massively.

This

Due to lockdown I’ve only done 8,000 miles on my fully serviced 2 year old car and im being offered only £500 less than I paid for it and that’s from webuyanycar.com

Add the dealers cut onto the price and 2nd cars are a fortune these days

If you can get and want a new car go for it