New Car cash or PCP?
Discussion
bentley01 said:
I have ordered a new Defender. Do I pay cash for it and own it or should I get a PCP and move it on for a new one after three years. Not sure about PCP and it’s downfalls.
You could pay cash and still move it on for a new one after 3 years, and you could equally get a PCP and own it as well.The anwser to your question will depend on what you want to achieve with the purchase, and how much cash you want to put in, compared to how much cash you want to borrow on finance.
What kind of finance deal is avaialble, and is Land Rover offering any incentives for using their finance?
Aside from the possible further contribution by taking the PCP - what is the APR?
We may (will) have uncertain times ahead having lots of cash tied up in a vehicle when you really do need it might be worth the Apr.
Credit is not getting cheaper / likely to go up with BOE flagging inflation is getting out of hand. So a low PCP Apr rate could be a smart blend to your finance setup.
We may (will) have uncertain times ahead having lots of cash tied up in a vehicle when you really do need it might be worth the Apr.
Credit is not getting cheaper / likely to go up with BOE flagging inflation is getting out of hand. So a low PCP Apr rate could be a smart blend to your finance setup.
Thanks for the comments. I would imagine given the current shortage of vehicles Landrover won’t be giving any financial incentives but it’s worth checking.
PCP i guess hides the total costs quite well with just the monthly to worry about. Cash though avoids paying interest but as suggested could be utilised elsewhere.
I wonder how many people buy these vehicles on a PCP
PCP i guess hides the total costs quite well with just the monthly to worry about. Cash though avoids paying interest but as suggested could be utilised elsewhere.
I wonder how many people buy these vehicles on a PCP
brickwall said:
Only you can answer properly. Key questions to guide your decision:
1. What is the interest rate on the PCP? Is this higher or lower than your own personal cost of capital? If Land Rover want to charge you 6% but your alternative use for for the funds is paying down the mortgage at 1% clearly using your own money is cheaper)
“Deposit contributions” (I.e. discounts) linked to taking PCP are a red herring - if these are on offer but you don’t want to put the car on PCP then you should take the finance then clear it in full within 14 days.
The APR figure shows the cost of interest and any other compulsory charges (the interest figure doesn’t include the latter), but if there is any form of deposit contribution discount, the APR figure is completely meaningless, as this isn’t taken into account in the percentage figure.1. What is the interest rate on the PCP? Is this higher or lower than your own personal cost of capital? If Land Rover want to charge you 6% but your alternative use for for the funds is paying down the mortgage at 1% clearly using your own money is cheaper)
“Deposit contributions” (I.e. discounts) linked to taking PCP are a red herring - if these are on offer but you don’t want to put the car on PCP then you should take the finance then clear it in full within 14 days.
As a result, to assess the value of a PCP offer, it’s important to consider the APR alongside any deposit contribution discounts. In some cases 4.9% APR setups are cheaper than the 0% APR alternative (from the same manufacturer and on the same car), as there may be a deposit contribution with the 4.9% offer that more than outweighs the interest charged and no deposit contribution with the 0% option.
If in doubt, getting like-for-like finance quotes is the key thing; the same type of finance, deposit, contract length and mileage allowance etc. Do this and you should be able to make direct comparisons.
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