PCP deal ends next year - what shall I do next?
Discussion
Hi All,
Hopefully I am fine posting this here as opposed to the finance forum.
My Fiesta ST PCP deal ends July 2020 and I am unsure what my next move should be. I am mid twenties and live at home, currently saving for my first place (I really do not want to touch my savings). I pay £250 a month for the car and earn just under £30k. I treat my car as a hobby as well as a means of commuting and I am quite happy to pay the £250 a month, however I am aware that PCP isn't the best decision financially. I am in no other debt and my other monthly outgoings are nominal.
At the moment I feel like my options are-
Get a loan for £5k or so and buy a Clio RS197/200
OR
Get a new PCP deal on a mk8 ST and continue paying the £250 a month for the next 3 years
Thanks in advance for any replies.
Hopefully I am fine posting this here as opposed to the finance forum.
My Fiesta ST PCP deal ends July 2020 and I am unsure what my next move should be. I am mid twenties and live at home, currently saving for my first place (I really do not want to touch my savings). I pay £250 a month for the car and earn just under £30k. I treat my car as a hobby as well as a means of commuting and I am quite happy to pay the £250 a month, however I am aware that PCP isn't the best decision financially. I am in no other debt and my other monthly outgoings are nominal.
At the moment I feel like my options are-
Get a loan for £5k or so and buy a Clio RS197/200
OR
Get a new PCP deal on a mk8 ST and continue paying the £250 a month for the next 3 years
Thanks in advance for any replies.
It does depend on your own priorities
If you are happy driving an older car then spend £5000 rather than £20000 or however much a new ST costs.
After 2 years or so at £250pm you'll own it outright and conservatively it will be worth £3-3500. You can then either keep it until the wheels fall off, or go and get another £5000 loan and go again with a new-to-you car.
If you are likely to go again with a new-to-you car then bear in mind that you will be paying £250pm for the foreseeable future for an old car whereas you are currently getting a new one for the same amount.
If you are happy driving an older car then spend £5000 rather than £20000 or however much a new ST costs.
After 2 years or so at £250pm you'll own it outright and conservatively it will be worth £3-3500. You can then either keep it until the wheels fall off, or go and get another £5000 loan and go again with a new-to-you car.
If you are likely to go again with a new-to-you car then bear in mind that you will be paying £250pm for the foreseeable future for an old car whereas you are currently getting a new one for the same amount.
Thales said:
Hi All,
Hopefully I am fine posting this here as opposed to the finance forum.
My Fiesta ST PCP deal ends July 2020 and I am unsure what my next move should be. I am mid twenties and live at home, currently saving for my first place (I really do not want to touch my savings). I pay £250 a month for the car and earn just under £30k. I treat my car as a hobby as well as a means of commuting and I am quite happy to pay the £250 a month, however I am aware that PCP isn't the best decision financially. I am in no other debt and my other monthly outgoings are nominal.
At the moment I feel like my options are-
Get a loan for £5k or so and buy a Clio RS197/200
OR
Get a new PCP deal on a mk8 ST and continue paying the £250 a month for the next 3 years
Thanks in advance for any replies.
Why not get a loan and keep the car you have?Hopefully I am fine posting this here as opposed to the finance forum.
My Fiesta ST PCP deal ends July 2020 and I am unsure what my next move should be. I am mid twenties and live at home, currently saving for my first place (I really do not want to touch my savings). I pay £250 a month for the car and earn just under £30k. I treat my car as a hobby as well as a means of commuting and I am quite happy to pay the £250 a month, however I am aware that PCP isn't the best decision financially. I am in no other debt and my other monthly outgoings are nominal.
At the moment I feel like my options are-
Get a loan for £5k or so and buy a Clio RS197/200
OR
Get a new PCP deal on a mk8 ST and continue paying the £250 a month for the next 3 years
Thanks in advance for any replies.
Whilst an old Clio 197 / 200 can be fun they can throw up unexpected bills as there are quite a few bespoke components, particularly in the suspension. Also gearboxes can give problems.
SWoll said:
What is the actual cost of a 3 year PCP on a Fiesta ST? £250 a month all in or is there a deposit you need to find also?
I am led to believe that the equity in my current car will cover the deposit of the mk 8. However I'm not entirely sure of the ins and outs of this, as this is my first PCP deal having previously owned my cars.If you're saving for a house the benefit of a PCP is that you know exactly how much you're paying every month and if you get a service plan thrown in, there's no sudden extra big bills. That way you know what you have left to put into savings. Downside is you never own the car unless you stump up for it at the end of the deal but most people just hand them in and replace with a new car. I'm on my first PCP now and doubt I'll ever go back to owning a car until I retire and just need a cheap run about. An older car could throw up big bills in the future.
PCP but get something else.
PCP isn't financially bad. You're renting a depreciating asset, you are paying monthly for the use of, buying a car outright that hasn't had the majority of its depreciation wiped out is a bad financial decision. That's my opinion anyway.
So you can either buy an older car with much older technology and at the risk of it breaking down/needing work, or you can rent a new car.
Or you can buy a few really old interesting cars and work on them yourself and maybe have at least 1 working when you need it.
PCP isn't financially bad. You're renting a depreciating asset, you are paying monthly for the use of, buying a car outright that hasn't had the majority of its depreciation wiped out is a bad financial decision. That's my opinion anyway.
So you can either buy an older car with much older technology and at the risk of it breaking down/needing work, or you can rent a new car.
Or you can buy a few really old interesting cars and work on them yourself and maybe have at least 1 working when you need it.
I'm in a similar scenario to yourself with regards to age, living at home whilst saving to move out and also paying for a car on PCP (I have an S3 8V costing me £300pm).
I personally am looking to cash in my Audi now and look to get something cheaper, partly due to only doing approx 4K miles a year and seeing moving out as more of a priority.
The way I see it, if you take a hit on owning a nice new car for 18 months or so, you could have saved a fair bit towards a deposit and also if you have actually moved out, be at the stage to reassess your finances and maybe get something else via lease/pcp
I personally am looking to cash in my Audi now and look to get something cheaper, partly due to only doing approx 4K miles a year and seeing moving out as more of a priority.
The way I see it, if you take a hit on owning a nice new car for 18 months or so, you could have saved a fair bit towards a deposit and also if you have actually moved out, be at the stage to reassess your finances and maybe get something else via lease/pcp
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