Can anyone advise me about buying a car? Should we get a loan or do PCP?

[moneyworries8]

DH & I currently lease a car. We paid a deposit (around £1600) and pay £230 per month.

DH is in the Army and is due posting in a couple of years. We don't want to lease this time due to the fact that the charges are huge if you need to get out of the lease early. We could end up with an overseas posting so could have no choice but to cancel.

The car DH wants us to get is £14,000. It's a couple of years old with around 30,000 miles on the clock.

By the time we need to buy it, we'll have about £2,000 saved towards it. We can take a loan out for the remaining £12,000, pay off over 3.5 years at £300 per month. The only thing that worries me is that leaves us with £70 per month less than we currently have.

The other option is to pay a £1,400 deposit and have the car for £215 per month on PCP. I don't fully understand PCP but the lady I spoke to at the leasing company recommended it to me. She said that whenever we need to end the contract, people often come out of it with a little bit of money rather than having to pay a cancellation fee. Her company don't offer PCP so this wasn't a sales pitch from her.

I understand the PCP deal would work our way more expensive if we completed the contract because there's a final sum you pay at the end to own the car but it's highly unlikely we'd stick with that car until that point.

I'm massively attracted to paying less per month. That seems like it would be the best way for us to go but I just want to make sure I've got all the facts right 👍🏻

Can anyone help?

Thank you.

Ta1kinPeace - Never heard of Autoaid I will bear in mind on next year's renewal - thank you

YY to Autoaid. Costs less than £50 a year for exactly the same cover that AA/RAC charge at least double for.

I've also had PCP deals where it's cheaper to take finance than pay in cash or get a loan due to interest free, no discounts for other payment methods and free extras thrown in with the finance only such as servicing and breakdown cover.

Due to manufacturer incentives I believe, mine was financed by VW finance, which covers VW, Skoda and probably Audi and Seat too. I think it's because that company is so massive it has access to very very cheap money itself and wants to get as many of it's cars out there as possible.

It's probably only worth doing for very small cars as bigger ones cost quite a bit more. I had a Skoda Citigo for £130 pm for everything except fuel and insurance, and didn't even need to pay a deposit.

We have had 5 cars on pcp and it works for us. I would look into it more and make sure you understand it fully before you take a car out like this.

To be honest though I would go for a cheaper car. Presumably it's a biggish car you are going for at £14,000 second hand so why not go for something smaller/less mod cons?

Hi all,

I've decided to go with taking out a loan.

If I extend it to paying off over 4.5 years, it's only £237 a month, which is much more affordable for us than £300.

Then, when I start working, we'll have a huge amount more disposable income so I can make big overpayments on the loan to clear it quicker.

Just hoping I'm being sensible about this though 😬 I haven't always been the best with debt.

that sounds like a plan
make sure you get autoaid coverage for it :-)

As a previous Audi A4 owner I'd advise you strongly to google oil engine problems.

Ours needed a completely new engine at 40k miles. This was obviously hugely expensive, inconvenient and is a well known Audi problem.

They pay out in the US to fix it, but it's case by case in the UK.

Notice now many Audi A4s are smokey when accelerating....its a really big issue apparently

Depends where you go overseas as to whether you take the car with you. We've been abroad since 2006 both with HM Forces and post retirement still in the defence sphere, and I have had Brit cars for all that time. I find it easier. We just got the headlights changed over to European ones, and that was it. Yes, it had to pass a Belgian CT (MOT), but that was no issue either.