Anybody ever had PCP regret?
Discussion
My current car (57 plate leon fr) is a perfectly fine car but i yearn for a smaller hot hatch. I'm not loaded but i could afford a deposit of 3-4k and monthly payments of around £100-150. I've been looking at fiesta st's and peugeot 208 gti's for around 8-12k which means there'd still be a hefty chunk left to pay at the end of the deal or hand it back. The thought of spending half the value of the car only to return it with nothing to show isnt a nice one so im wondering if anybody has ever been in my position and can give me their views.
Cheers
Cheers
PCP’s are only worth pursuing on new cars as manufacturers typically offer deposit contributions (essentially a discount) which can negate the interest charged over the finance period. If you don’t intend to buy the car after the monthly payment period then leasing (PCH, personal contract hire) can work out a lot cheaper.
If you’re looking to buy a used car then avoid PCP as dealers offer high interest rates with no contribution (apart from their annual “used car events”). You’ll save a lot of money by getting a lower interest personal loan from a bank instead and purchashing with that.
If you’re looking to buy a used car then avoid PCP as dealers offer high interest rates with no contribution (apart from their annual “used car events”). You’ll save a lot of money by getting a lower interest personal loan from a bank instead and purchashing with that.
Thats interesting that you would advise against PCP on a used car, as you can probably tell I know next to nothing about PCP. Unfortunately lease monthly payments seem to be twice as high and out of my budget, I also wonder how much I would regret having nothing to show at the end of the lease when my current car is already brought and paid for.
Edited by Hatethisbit on Wednesday 2nd May 23:53
Hatethisbit said:
Thats interesting that you would advise against PCP on a used car, as you can probably tell I know next to nothing about PCP. Unfortunately lease monthly payments seem to be twice as high and out of my budget, I also wonder how much I would regret having nothing to show at the end of the lease when my current car is already brought and paid for.
A lot of people on such finance threads talk about having nothing to show for their payments at the end of the term, but they haven't really thought about what they are saying..Edited by Hatethisbit on Wednesday 2nd May 23:53
At the very least, you will have exclusive use of your chosen car for however long you decide to keep it.
If you think a bit deeper about it, you will realise that it is not a lot different from buying a car outright then selling it for a lower amount at some time down the line.
PCP on used cars is generally terrible due to the very high APR. It’s often a much cheaper deal to get a low APR loan from a bank over a longer term. The “balloon” at the end is still there in a way as you have to clear the loan at some point but the interest you pay will be far less.
Total cost of ownership.
For leasing, that's the deposit + monthlies + fees
purchasing it's "cost of car" - "depreciation" (I'm ignoring servicing, tyres, repairs - you get the idea!)
For a lot of cars, leasing gives a guaranteed cost. You know from the outset what it will cost to use that car for a prescribed period of time (usually 2/3/4 years). When buying, depreciation is unknown. The thing buying gives you over leasing is the opportunity to change cars earlier, or later.
If your budget really is tight and circumstances might change - leasing / PCP is a risky option, as you're tied to payments.
For leasing, that's the deposit + monthlies + fees
purchasing it's "cost of car" - "depreciation" (I'm ignoring servicing, tyres, repairs - you get the idea!)
For a lot of cars, leasing gives a guaranteed cost. You know from the outset what it will cost to use that car for a prescribed period of time (usually 2/3/4 years). When buying, depreciation is unknown. The thing buying gives you over leasing is the opportunity to change cars earlier, or later.
If your budget really is tight and circumstances might change - leasing / PCP is a risky option, as you're tied to payments.
Thanks for the replies all. I have always shunned the idea of a brand new car due to the depreciation but i tend to get bored of cars after a year or two so perhaps PCP on a new model that i could hand back is the way to go. I never considered that dealer contributions could offset the interest somewhat either (interest is all the other half moans about!).
5 year personal loan for 8k with First Direct is 144 quid a month at 3.3%apr.
That plus your deposit opens up a decent choice.
If you only wanted to keep the car 3 years at that point you'd only have a settlement figure of about 3200 on the loan.
The car should be worth a fair bit more than that at that point.
That plus your deposit opens up a decent choice.
If you only wanted to keep the car 3 years at that point you'd only have a settlement figure of about 3200 on the loan.
The car should be worth a fair bit more than that at that point.
This I an interesting thread; I'm in exactly the same position, albeit with higher monthly available but no existing vehicle.
I'm currently weighing up a bank loan for a used car (through something like Zopa at 3.2%) which is comparatively very low cost, or leasing. PCP looks to be an incredibly expensive way to get the vehicle, as most I've seen have you paying the majority of the cost of the vehicle and then an extra 10% or so as balloon.
Psychologically the bit I'm having troubles with is what happens if something goes wrong. For instance, if the car is damaged how much do they chaege!? Similarly or going over mileage, is it better to plan low and go slightly over, or plan high and end up under? The idea of being involved in a crash and ending up having to pay off a car I no longer have isn't appealing
I'm currently weighing up a bank loan for a used car (through something like Zopa at 3.2%) which is comparatively very low cost, or leasing. PCP looks to be an incredibly expensive way to get the vehicle, as most I've seen have you paying the majority of the cost of the vehicle and then an extra 10% or so as balloon.
Psychologically the bit I'm having troubles with is what happens if something goes wrong. For instance, if the car is damaged how much do they chaege!? Similarly or going over mileage, is it better to plan low and go slightly over, or plan high and end up under? The idea of being involved in a crash and ending up having to pay off a car I no longer have isn't appealing
Draculaw said:
This I an interesting thread; I'm in exactly the same position, albeit with higher monthly available but no existing vehicle.
I'm currently weighing up a bank loan for a used car (through something like Zopa at 3.2%) which is comparatively very low cost, or leasing. PCP looks to be an incredibly expensive way to get the vehicle, as most I've seen have you paying the majority of the cost of the vehicle and then an extra 10% or so as balloon.
Psychologically the bit I'm having troubles with is what happens if something goes wrong. For instance, if the car is damaged how much do they chaege!? Similarly or going over mileage, is it better to plan low and go slightly over, or plan high and end up under? The idea of being involved in a crash and ending up having to pay off a car I no longer have isn't appealing
Return to invoice GAP insurance would sort that.I'm currently weighing up a bank loan for a used car (through something like Zopa at 3.2%) which is comparatively very low cost, or leasing. PCP looks to be an incredibly expensive way to get the vehicle, as most I've seen have you paying the majority of the cost of the vehicle and then an extra 10% or so as balloon.
Psychologically the bit I'm having troubles with is what happens if something goes wrong. For instance, if the car is damaged how much do they chaege!? Similarly or going over mileage, is it better to plan low and go slightly over, or plan high and end up under? The idea of being involved in a crash and ending up having to pay off a car I no longer have isn't appealing
Hatethisbit said:
Recently when i went into a dealership to test an ST the guy was pretty pushy on GAP insurance, is this something it would be stupid not to take? It did seem to make sense at the time
I’d take it but not from the dealer- ALA at quarter of the pricehttps://www.ala.co.uk/?utm_expid=2991626-29.7aXIBU...
Hatethisbit said:
Recently when i went into a dealership to test an ST the guy was pretty pushy on GAP insurance, is this something it would be stupid not to take? It did seem to make sense at the time
Gap is very good but rarely competitive from the dealership , you can buy it afterwards Terzo123 said:
5 year personal loan for 8k with First Direct is 144 quid a month at 3.3%apr.
That plus your deposit opens up a decent choice.
If you only wanted to keep the car 3 years at that point you'd only have a settlement figure of about 3200 on the loan.
The car should be worth a fair bit more than that at that point.
Terzo's points are all perfectly valid.That plus your deposit opens up a decent choice.
If you only wanted to keep the car 3 years at that point you'd only have a settlement figure of about 3200 on the loan.
The car should be worth a fair bit more than that at that point.
In the interests of debate I'll poke a stick in and ask why it's better to have a unguaranteed settlement figure of £3200 with a personal loan, rather than a guaranteed one with a PCP. Do you agree that if you do that then you will still have burned some or all of your deposit in the same way as a PCP?
Naturally the decision about which is best depends on the overall costs of the PCP vs overall costs of the personal loan.
If the PCP is only a little more expensive then it may still be worth considering for the additional consumer protection afforded by a secured loan, and for the advantage that it leaves your unsecured credit line untouched.
I signed up for a used 320d on a 4 year PCP (I know, I was younger and just focused on the monthlies - stupid boy)
Anyway, I love the Car so i'm just riding it out and i'm going to pay off the baloon with a short bank loan at the end of the deal.
But yes, I do have regret. Not about the choice of car, just the way i've chosen to pay for it. I'm literally paying for that mistake now. No rolling of the neg egg for me, i'm playing the long game and learning from my error.
PCP on used Cars is bad, I can confirm! Monthlies = low, overall cost of the car = high!
Anyway, I love the Car so i'm just riding it out and i'm going to pay off the baloon with a short bank loan at the end of the deal.
But yes, I do have regret. Not about the choice of car, just the way i've chosen to pay for it. I'm literally paying for that mistake now. No rolling of the neg egg for me, i'm playing the long game and learning from my error.
PCP on used Cars is bad, I can confirm! Monthlies = low, overall cost of the car = high!
Hatethisbit said:
Thanks for the replies all. I have always shunned the idea of a brand new car due to the depreciation but i tend to get bored of cars after a year or two so perhaps PCP on a new model that i could hand back is the way to go. I never considered that dealer contributions could offset the interest somewhat either (interest is all the other half moans about!).
Thing about lease/PCP deals is not saying I want car x and going and buying it, it's about waiting for good deals and pouncing on one that ticks your boxes. I got a 5300 manufacturers deposit contribution and 0% APR on a two year deal on mine.
Also I would look to stick to shorter was rather than longer ones.
AllyBassman said:
I signed up for a used 320d on a 4 year PCP (I know, I was younger and just focused on the monthlies - stupid boy)
Anyway, I love the Car so i'm just riding it out and i'm going to pay off the baloon with a short bank loan at the end of the deal.
But yes, I do have regret. Not about the choice of car, just the way i've chosen to pay for it. I'm literally paying for that mistake now. No rolling of the neg egg for me, i'm playing the long game and learning from my error.
PCP on used Cars is bad, I can confirm! Monthlies = low, overall cost of the car = high!
What would you do differently, shorter term with higher monthly payments?Anyway, I love the Car so i'm just riding it out and i'm going to pay off the baloon with a short bank loan at the end of the deal.
But yes, I do have regret. Not about the choice of car, just the way i've chosen to pay for it. I'm literally paying for that mistake now. No rolling of the neg egg for me, i'm playing the long game and learning from my error.
PCP on used Cars is bad, I can confirm! Monthlies = low, overall cost of the car = high!
Integroo said:
Thing about lease/PCP deals is not saying I want car x and going and buying it, it's about waiting for good deals and pouncing on one that ticks your boxes.
I got a 5300 manufacturers deposit contribution and 0% APR on a two year deal on mine.
Also I would look to stick to shorter was rather than longer ones.
I see, best to keep an eye on the various threads on here then.I got a 5300 manufacturers deposit contribution and 0% APR on a two year deal on mine.
Also I would look to stick to shorter was rather than longer ones.
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