Do you have a PCP or PCH on a car? Or have you bought a car outright?

[Helen812]

Hi, Just looking some advice. I have £4000 saved up and was planning to use it toward a car. I don't think I will be able to get a great car for that money so will prob need to get something more expensive.
What should I do, should I borrow a couple extra thousand from my bank or should I just put the £4000 deposit down on a car and pay the rest off monthly with the dealer?
Can I ask do you lease your car or own your car?
Really not sure which route to go down as my ex was always the one that dealt with that side of things but now I have to do it myself. Thanks

I bought outright

I've done a bit of everything, none of the methods seem to be too different in terms of best value for money. (Outside of buying a brand new one, that's a terrible idea in terms of depreciation.) Depends how much you want to borrow, but if it's a couple of grand then I'd say probably best to get a bank loan and, set your budget accordingly and then keep an eye on auto trader for what you want. Auto trader gives you a rough idea of whether a price is realistic which helps.

I have done both OP and it does depend what kind of car you want.

Last year we paid £5400 for a three-year-old Toyota Aygo - v basic model but it's great for what I need (commute to work). We have three DC but very rarely drive them all anywhere now as they are all adults. So if a small car would do, I would (personally) buy one outright with £4k.

OTOH if you need something bigger then PCP is good too - we did this as we got a really good scrappage deal on our old car and 0% on the new car. we paid it off at the end tho so now we own the car - the thing is with PCP that you pay out but never get the asset. OTOH you don't have to worry about repairs or MoT so it's an easier life.

I lease, after a long time of very cheap cars. New cars loose value so quickly I don't see the point in buying personally. I also like having a more reliable car and knowing what my monthly bills will be with more certainty.

I bought my nearly new Golf outright. I hate buying on lease/owing money.

We ended up going for a brand new car on a lease deal for 3 years. The money we will spend in the 3 years is probably less than a brand new car would depreciate in the same time and having a new car gives us some peace of mind. Our last car was paid for outright but was old and became unpredictable with costs for repairs and maintenance costing a fortune. Search for videos on YouTube comparing pcp/pch/lease deals for some good insights.

We lease.
Sick of spending money on car repairs when buying couple year old cars.
We aren't bothered about owning outright tbh and they all devalue so quick.

As pp we got a brand new car and the total we're paying is less than buying a brand new one out right.

We have maintenance included in our monthly so have nothing to worry about in terms of services/repairs.

We've done both. Our last cats were bought outright, total cost about £10,000 for the 2 of them, one was £8000 (family car) and was about 5 years old when we got it. The other was £2000 and was 8 years old when we got it. Both were great for about 3 years, but the the clutch went on the bigger car. Would cost £2,500 to fix, car wasn't really worth that much by that point (4 years later). Other car needed work, wasn't worth doing.
So we now have 2 much newer cars on PCP. One was 2 years old, the other 3 when we got them. But we pay £500 a month for both. We prefer this because we can get newer cars that are likely to need a lot less work over the next few years(until we exchange), but we're in a position at the moment that we can afford the repayments. It would take us years to save up an amount that would allow us to buy something even half as good

So I think it depends on your expendable income and whether you can easily afford the repayments. If not, I would buy outright.

Both cars bought outright.

I’m on my 3rd pcp car - I keep planning to pay it off and keep it but circumstances change and I end up with a new one (that’s how they get you!)

My kids are young so I need pram and car seat space and reliability.

We have done fairly well on deals, using a scrapping scheme to get a chunk off and now 2nd hand car prices are high our last pcp car was part exd for 4k more than than final payment would have been.

I buy outright at about 18 months old then keep it until it's about 10 years old then trade in for another car, I prefer to own a car or I would have to worry if it got scratched, I don't particularly need a brand new car, I don't do many miles and never had a car go badly wrong. The Fiesta I bought 4 years ago doesn't seem to have lost much value at all.

Don’t do pcp. If you miss one payment, the car could get taken from you. You own nothing until the final payment.

If you have a credit union or bank loan, and you fall on hard times, at least you own part of the car and can sell it. All is not lost.

We have 4x4 on contract hire. You can only do that on brand new vehicles tho.

It's really cost effective for monthly payments - we looked into all the financing options and it was almost half the price.

We change the car every 3/4 years so I guess it means we are effectively renting our car. It lets us drive about in a very expensive and fairly new car all the time tho!

Helps if you can claim back the VAT through work too.

We decided not to PCP as it worked out the monthly repayments for a bank loan over 4 years would be the same as the PCP but that we'd own it all at the end. There would have been a balloon payment as well as all the monthly payments with the PCP. If we'd decided to sell halfway through we would have been able to pay off the loan with the sale of the car. Even taking into account service and MOT which sometimes comes with a lease we were much better off in the long run.

I bought outright.

I had a car on a lease in the past and it was one hassle and argument after another. PCP just looked like a supremely expensive version of the same thing.

I bought my last car outright with a £2000 scrappage discount meaning my brand new Kia only cost me £6000. I did have the cash but they also offered finance.

My car cost 4.5k in 2018, it was 8 years old.

Its now worth about 3k I reckon and I think I will have another good 7 years out of it. We buy for reliability, nothing fancy

We only buy outright and second hand and then drive it till the wheels come off. The annual cost of the car is just MOT, insurance, the odd maintenance issue and petrol.

We live in London and use it only occasionally, mostly on weekends.

Buy outright and always have it's the only way I know.
Buy privately and get some great bargains. Have 2 cars and just pay insurance on both monthly and car tax on one as one is tax free.
Repairs pretty cheap as know a local self employed mechanic

Thanks so much everyone, you've been so helpful and have given me lots of info that I didn't know about

I like to lease, new car every three years service included. Suits me. X

We bought outright.

We wanted a nice little runaround and plan to keep it 12 years +

If you can get a 0%interest or low interest credit card I’d buy outright and pop it on the card

Dealer finance is usually more expensive than a personal loan.

How much to spend and hence borrow depends on how far you drive and whether it's mostly just you or you have kids, dogs, equipment etc.

I WFH and don't drive very far so I bought a 2 YO Citigo that I intend to keep for a long time. But we also have DPs larger but older car that can be used for longer runs and holidays etc. He also generally drives more for work. Both owned outright. Be aware that prices of second hand cars have increased a lot recently.

I paid just over £8k for my car about 6 months back from a car supermarket and now the same money will only buy a 5-6 YO car or a similar one will cost nearly £2k more from the same place.

We’re really anti debt so I don’t personally intend to ever borrow money for a car.

I’m interested that you say you won’t get a good car for £4K.

We paid £2k cash for a 7yo car 5 years ago. 3 out of 5 years it’s passed its MOT with no work required, the other years it’s not been too expensive to fix (this year was £300 to replace hand brake cable and some other fixes). Every year the mechanic tells us what a great car it is! Yes it’s a bit dented in places 😂 but it gets us from A to B in comfort.

The amount we’ve saved in interest by only buying what we can afford to buy in cash must have been a lot and it’s also given us flexibility in our budget by having no monthly payment (after we got it I became a SAHM for a bit, for example, which was affordable by not having high debt repayments).

Hoping to get another year or two out of the car and we have started to save for replaying it with a cash purchases again.