Car finance with a twist!

[GTIR]

I'm looking at replacing my aging Merc but I'm not in the normal situation than most.
I currently do 75k a year chauffeuring so these PCP are not really any good as they only do max 30kpa.

I'm in a good position where I have £10k for a deposit.

I am thinking I have a couple of options;
1) 1 year old car on PCP plus put money away each month for the extra mileage at 10kpa and pay it off at the end of the contract and hand car back.
2) 1 year old car and put down the deposit and buy the car outright over 3 years.
3) Do the same on a brand new one?

My current 2007 car has 430k and I bought it new on a PCP but ended up buying it anyway. Luckily it worked out and I now own it, so that will also be part ex but I'm not including that in my figures.

So what is the best way. Is it better to keep the money in the bank and use Merc finance?

Cheers.



(I've also got another new Merc but that was bought separately with a business partner and is driven by another driver. This is for my own use.)

[jontysafe]

If it was me I'd be option 2 on say a 2009 S class and then either rolling the car every two years or a possibly better option maxxing the mileage keeping on a private plate until maintenance becomes financially prohibitive. With the miles per annum you are doing there's not going to be a huge amount of equity left in a car after 2 years anyway.

[Some Gump]

Pcp deal, 10k per year use. Clock the hell out of it.
Seems to be the current trend, anyways..

[GTIR]

S class. Not efficient enough, MPG, tax, too big, servicing and those poxy gearboxes.

It's true that it won't be worth much at the end but it's my business and it would have made money in that time. It's not like it's a private car.

[jontysafe]

Same goes with any car though really. I've leased, pcp'd, hp'd etc personally and through business, have now come to the conclusion that by FAR the second hand market and straight boring old finance over a short a period as is comfortable is the way to go. In the prior 3 years doing anything differently cost me a packet.

[P-Jay]

I'd go option 2, PCP doesn't really work with high millages, never mind the sort of miles you do. In PCP terms after 3 years and 225k miles the car, however well looked after it is, is worthless to them and they'll hammer you for every single thing they can on top of the 20K+ they'll want for additional mileage.

Wouldn't it be more beneficial for you to find a slightly older car (3-4 years) with lower than average mileage? Would taking a 4 year old 30k mile car to a 7 year old 255k mile Car will be less costly than take a new car to a 3 year old 225k car?

[sumo69]

P-Jay said:

I'd go option 2, PCP doesn't really work with high millages, never mind the sort of miles you do. In PCP terms after 3 years and 225k miles the car, however well looked after it is, is worthless to them and they'll hammer you for every single thing they can on top of the 20K+ they'll want for additional mileage.

Wouldn't it be more beneficial for you to find a slightly older car (3-4 years) with lower than average mileage? Would taking a 4 year old 30k mile car to a 7 year old 255k mile Car will be less costly than take a new car to a 3 year old 225k car?

From an accountants point of view, I would concur.

David

[rfoster]

If you can't pay outright then straight HP every time. HP (generally) attracts a lower rate of interest to start with - plus with a PCP / lease purchase you are paying compounding interest on the balloon payment (as you are deferring a lump of capital until the end of the agreement.)

[GTIR]

P-Jay said:

Wouldn't it be more beneficial for you to find a slightly older car (3-4 years) with lower than average mileage? Would taking a 4 year old 30k mile car to a 7 year old 255k mile Car will be less costly than take a new car to a 3 year old 225k car?

I'm very wary of unusually low mileage older Mercs. As has been pointed out clocking is rampant with these cars and a 3/4 year old car will be out of warranty anyway so Merc don't care. I also don't know how it's been treated whereas a 3k 11/12 plate demonstrator is quite good history wise.
Also, a 4yo car will be the old shape and will look very dated in a couple of years time then I'll be back to square one.

To be honest. If I was getting a 3yo car, so a 09, I may as well keep mine as I'm 100% of the history.