Is pcp for me?

[Andyhb]

Hello folks!

I'm considering getting an octavia vrs on pcp, £3000 deposit followed by 48x£220.

This leaves a gfv of approx £7000.

£200 represents just under 10% of my monthly take home pay

I like to hold onto cars for a long time and see this as a good opportunity to get a new car on 0% for four years, then pay off the balance and keep it for years.

Can anyone suggest a better way of doing it, saving £23,000 as a normal person is of course a ridiculous idea.

Thanks, Andy.

[Blue Oval84]

0% Finance you say? It sounds a great way to get into a decent car that you'll keep for a long time.

Only things to remember are-

1) What is the full price of the car? If they're charging full list, and you have a change of circumstances, then you may end up owing more to clear the finance than if you just took normal 60 month finance on a well discounted list price (because if you clear it early you'd save interest, whereas with 0% deals there is no interest to save so you can end up owing more)

2) Unless you manage to save up £7000 on the side over four years, you're going to need to factor in an additional loan at the end, which WILL incur interest.

Only you can decide if you want to spend 10% of your net take home (plus a chunk of cash and another loan in four years - bringing your total time in debt to about 6 or 7 years) on a car, but to be honest if you're going to keep the car 10 years plus, and fancy starting from a brand new one, there'd be worse ways to do it.

Someone will come along shortly to point out that a £4-5K Mondeo will last a good five or six years with ease, then you can buy another one. After 10-12 years you'd have spent less than half what an Octavia would cost you and been in a car thats also highly rated, but wouldn't be new...

[CoolHands]

£282.50 a month for four years. Don't you need it for something else?

[Blue Oval84]

Actually, just noticed it was a VRS you were on about. I see it's not just a run about you're after

My advice all still stands though, although it seems I'm going to be the one that makes the whole used vs new point...

http://www2.autotrader.co.uk/classified/advert/201...

With your £3K down, and £286 per month over 48 months with a Sainsburys loan you'd own it outright, or £232 over 60 months, rather than getting to the end and having to pull out £7K. I'm not sure that's a *massively* better situation though, save a good few grand but you're not getting a new one...

Up to you really, your plan sounds good if it has to be new though

[Andyhb]

CoolHands said:

£282.50 a month for four years. Don't you need it for something else?

No, not really, living in NI living costs are lower, no big commute, relatively cheap houses.

My thinking is I'd have a good few years warranty, I'd know the history, know servicing was done etc, hopefully avoid the pitfalls if buying used.

[Andyhb]

Blue Oval84 said:

Actually, just noticed it was a VRS you were on about. I see it's not just a run about you're after

My advice all still stands though, although it seems I'm going to be the one that makes the whole used vs new point...

http://www2.autotrader.co.uk/classified/advert/201...

With your £3K down, and £286 per month over 48 months with a Sainsburys loan you'd own it outright, or £232 over 60 months, rather than getting to the end and having to pull out £7K. I'm not sure that's a *massively* better situation though, save a good few grand but you're not getting a new one...and

Up to you really, your plan sounds good if it has to be new though

You make a good point, thanks for everyone's input

[Flooble]

No big commute?

So ... do you really need that brand spanker new car? Rather than something older and fun?

Just a thought.

[steve-5snwi]

If it's 0% and you can still get a big discount then go for it. I don't think it matters if it's pcp. Personally I'd increase the mileage to lower the balloon if your intention is to keep it. Then you will have a smaller balloon to settle.

[LocoBlade]

The sale price is what you need to watch out for as others have said. Looking on coast2coastcars.co.uk you can get over £4k off a base spec vRS petrol, so if the 0% finance deal means there's no discount from RRP then it's not really 0% finance bcause you're paying £4k over the odds to start with.

Your figures suggest there is some discount in there though as long as the GFV is correct, as your deposit plus monthly payments and the GFV add up to just over £20k, about the price of a discounted vRS?

Edited by LocoBlade on Monday 23 January 21:51

[MuscleSaloon]

PCP often gets bad press but they're not always bad. This one looks pretty reasonable - sensible up front deposit, affordable monthly payments and a pretty low final settlement figure.

As ever there's always numerous other ways of doing things, but if you want a brand new car it looks fair.

[spettifer]

Also PCP has the option that you can hand the car back early (a voluntary termination) if you have a change of circumstances for instance, provided you have paid at least half the total amount payable. May or may not be useful for you given your plan, but it's something that can be handy. I'm a couple of months off doing just that as I'm fed up with paying almost 500/month for a car (I got a bit starry eyed at the thought I could finally spec myself a nice new Bimmer - eventually you realise that you probably didn't spec anything that special anyway and if you end up doing more miles than the deal allows it can get painful). It does not affect your credit rating either provided you have not missed payments etc.

[Rick101]

Any reason you are not considering leasing?
I think the payments would probably be cheaper.

If you are looking at a car to run long term what is the benefit of buying new? May as well make an initial saving and buy used and save yourself what, 13 grand?

[Andyhb]

Surely the benefit of buying new is what I originally stated? Ie, it'd new, it's warrantied, il know the entire history, maintenance etc and avoid pitfalls of buying used.

[Rick101]

Aye but warranty will be out in three years. If you want a car always under warranty leasing is a option.

Just seems an expensive way to buy a keeper car. Pcp and lease is great for having newer cars and replacing regularly.

[Andyhb]

Rick101 said:

Aye but warranty will be out in three years. If you want a car always under warranty leasing is a option.

Just seems an expensive way to buy a keeper car. Pcp and lease is great for having newer cars and replacing regularly.

Warranty offered is 4 year with additional for £129. How else would you suggest? What be cheaper than 0% for the majority of the payments for a new keeper.

[Granfondo]

Andyhb said:

Warranty offered is 4 year with additional for £129. How else would you suggest? What be cheaper than 0% for the majority of the payments for a new keeper.

Going by your figures it is very cheap because it adds up to only £17860.

[Rick101]

Don't forget the 7K. Will you be paying interest on that?
I'd guess at a similar level to your previous payments that would be another 3 or 4 years.
I wouldn't want to be paying monthlies on 7 or 8 year old high mileage car. Can't see the appeal.
Each to their own, do whatever suits you best.

Just for your consideration
Save £1500 and have similar payments. After 3 years do it again and get a 2020 model car with full warranty. If you then want an older one use the £3000 you saved in PCP deposit, get a lower £3K loan (not 7K, 4K +interest saving there) and buy a used Vrs for £6k, which is easily achievable.
https://www.contracthireandleasing.com/car-leasing...

Edited by Rick101 on Tuesday 24th January 22:38

[Rick101]

Granfondo said:

Going by your figures it is very cheap because it adds up to only £17860.

+3000 not 300.

Still that comes out at £20560 which I'd guess is a reasonably discounted price.