Car PCP question- Please help

[Broombroom3]

Hi!

im about to leave university and start my graduate job. I’ll be earning a good salary so monthly payments won’t be a problem, however I don’t have enough saved up for the initial deposit for a car (I have savings but I need it for flat deposit and all other costs I’ve got with moving away and starting a new job)

I will absolutely need a car for my new job and unfortunately it’s not on a public transport route and is too much in a taxi, I really need a car to get to and from.

ideally I would save up for the deposit so I could get a car on finance but in order to save up I need to start my job and in order to start my job I need the car- bit of a catch 22!

i was thinking of getting a PCP as I can afford the monthly payments just not a massive deposit like I would need for financing a car. However my family recommended not to do PCP if I can avoid it as apparently it’s stressful keeping the car clean, in good condition and if you get the slightest scratch on it then you lose a lot of money and it’s stressful because it’s not really my car so I have to take extra care to look after it. But surely that’s the same with any car on finance until it’s fully paid off it’s not really your car?

basially just asking if anyone here has a car on PCP and could share their thought on it both good and bad. I’ve had a brief look and the monthly payments for PCP are very very similar to those on traditional HP finance just without the initial big deposit! I’m not a messy person either and won’t keep the car in a state but I don’t want to be stressing all the time about getting charged if there’s the slightest mark on it. I don’t have kids but we do have a family dog who is occasionally in the car (although always with seat covers etc)

TIA! x

I had my previous 4 cars on PCP. What I found was that the car company didn't care particularly about the state of the car as long as I entered a new deal after 3 years (I had gone massively over mileage and also scratched the cars)

This worked quite well for me and I got a brand new car every 3 years! The last car I had, I barely drove, so was a lot under the mileage. They really wanted the car back- as I think it was worth more money but I actually had enough money to pay off the remaining balance and now own the car.

So it really worked for me. I think however if you intend to give the car back after 3 years and not enter a new deal they will try and take more money off you.

What about leasing a car? We looked into this recently for Dh, we didn't want a PCP because we were unsure if we would buy the car at the end of it. We then looked into leasing a car instead. There are lots of helpful videos on youtube about leasing a car. Leaseloco seems to be recommended. I found the website helpful and it allows you to change the details so decrease the initial payment and see how that affects the monthly payments etc. Might be worth a look.

I’ve had PCP for years and never had any issues. But I never handed them back so there was never an issue with mileage or marks because the new dealer just paid off what it was worth, as long as your in positive equity your fine.I wouldn’t recommend getting a brand new car though, will be a long time before you’re in positive equity again.

I only lease now because it’s cheaper. I can’t afford the car I have now on PCP

Saddling yourself with a massive car debt when you’re fresh out of uni is probably not the best idea. Could you get approved for a five year loan and buy a second hand car for about £8000 that would hopefully last you longer than five years? If you’re going to be living at home you could start saving up for the next car while you’re paying the first car off.

Buy a shitter for £500 and save for a better car

This is honestly what I would do in your situation. If it's your first car then you will
Likely have a few bumps and scrapes which is not the end of the world in an old banger. You also need to factor in cost of insurance which will be cheeper in an older car. You can then save for a decent car and have some no claims bonus behind you too.

Why not just get a bank loan then no deposit is needed or an interest free credit card deal if you can find one
I paid 10k for last second hand car with 3k from savings and 7k loan which I cleared in under 3 years - car is still worth 7-8k and I owe nothing on it

A PCP will still require a deposit, and the amount you put down will affect the rest of the costs.

You could go for a loan instead to pay off and keep say £5-7k?

Last 3 cars and current are on pcp.

Ypu do have to have them serviced yearly but if you are savvy some companies will throw in the services for free.

If the engine blows it's not your problem, finance company have to replace the car, but if its a general wear and tear you are responsible.

Had an accident in one, not my fault, had to have repairs but this made no difference to pcp or value of the car.

You just have to be prepared to change the car after 3 years on a new pcp or pay the balloon payment otherwise the car depreciates in value more than what you have paid and the monthly payments so you effectively lose out.

What we have found is that every 3 years we have been able to get a better car without paying much more or the same on the pcp.

I like it as a concept and I don't feel worried about the odd scratch or mark on the seat but its not for everyone.