Car finance (PCP)
Discussion
My better half is wanting a new car. Dealers are offering 12%+ APR on PCP.
Car value circa £20-25k, with a 25-35% deposit.
Car is to be electric (if that makes any difference).
She has immaculate credit history, never missed any payments on anything, has a joint mortgage and a well paid job which she has been in for 10 years.
Anyone have any recommendations for nearer 8%? My bank is offering it me at 8.4%.
Car value circa £20-25k, with a 25-35% deposit.
Car is to be electric (if that makes any difference).
She has immaculate credit history, never missed any payments on anything, has a joint mortgage and a well paid job which she has been in for 10 years.
Anyone have any recommendations for nearer 8%? My bank is offering it me at 8.4%.
Thanks for the replies.
She is wanting a particular car so leasing won't work for us (also it seems the value in leasing is slowly diminishing as per the most recent couple of pages in that thread).
It seems banks and companies are advertising rates at 6-8% and then once the forms are filled in, its 12% and over! I appreciate this is based on the individual applying, however I see no obvious reason why it is almost double the initial advertised rate.
Is it the case that the 6.5% advertised by Barclays for 1 man they sold that rate to 10 years ago and he secured a million pound property against a £2,000 loan and so now they are allowed to advertise that
I will drop you a message to the first chap who replied.
She is wanting a particular car so leasing won't work for us (also it seems the value in leasing is slowly diminishing as per the most recent couple of pages in that thread).
It seems banks and companies are advertising rates at 6-8% and then once the forms are filled in, its 12% and over! I appreciate this is based on the individual applying, however I see no obvious reason why it is almost double the initial advertised rate.
Is it the case that the 6.5% advertised by Barclays for 1 man they sold that rate to 10 years ago and he secured a million pound property against a £2,000 loan and so now they are allowed to advertise that
I will drop you a message to the first chap who replied.
Abc321 said:
Thanks for the replies.
She is wanting a particular car so leasing won't work for us (also it seems the value in leasing is slowly diminishing as per the most recent couple of pages in that thread).
It seems banks and companies are advertising rates at 6-8% and then once the forms are filled in, its 12% and over! I appreciate this is based on the individual applying, however I see no obvious reason why it is almost double the initial advertised rate.
Is it the case that the 6.5% advertised by Barclays for 1 man they sold that rate to 10 years ago and he secured a million pound property against a £2,000 loan and so now they are allowed to advertise that
I will drop you a message to the first chap who replied.
I just did a sample loan with Barclays, £18k over 4 years and they offered it to me at 6.2% so if you have a good credit record it should be similar.She is wanting a particular car so leasing won't work for us (also it seems the value in leasing is slowly diminishing as per the most recent couple of pages in that thread).
It seems banks and companies are advertising rates at 6-8% and then once the forms are filled in, its 12% and over! I appreciate this is based on the individual applying, however I see no obvious reason why it is almost double the initial advertised rate.
Is it the case that the 6.5% advertised by Barclays for 1 man they sold that rate to 10 years ago and he secured a million pound property against a £2,000 loan and so now they are allowed to advertise that
I will drop you a message to the first chap who replied.
Good luck
66HFM said:
Abc321 said:
Thanks for the replies.
She is wanting a particular car so leasing won't work for us (also it seems the value in leasing is slowly diminishing as per the most recent couple of pages in that thread).
It seems banks and companies are advertising rates at 6-8% and then once the forms are filled in, its 12% and over! I appreciate this is based on the individual applying, however I see no obvious reason why it is almost double the initial advertised rate.
Is it the case that the 6.5% advertised by Barclays for 1 man they sold that rate to 10 years ago and he secured a million pound property against a £2,000 loan and so now they are allowed to advertise that
I will drop you a message to the first chap who replied.
I just did a sample loan with Barclays, £18k over 4 years and they offered it to me at 6.2% so if you have a good credit record it should be similar.She is wanting a particular car so leasing won't work for us (also it seems the value in leasing is slowly diminishing as per the most recent couple of pages in that thread).
It seems banks and companies are advertising rates at 6-8% and then once the forms are filled in, its 12% and over! I appreciate this is based on the individual applying, however I see no obvious reason why it is almost double the initial advertised rate.
Is it the case that the 6.5% advertised by Barclays for 1 man they sold that rate to 10 years ago and he secured a million pound property against a £2,000 loan and so now they are allowed to advertise that
I will drop you a message to the first chap who replied.
Good luck
She has never had a credit card which we are always taught is a bad thing despite reality probably being the opposite.
Thanks for your input though, nonetheless.
PCP and getting a loan to buy a car are two completely different animals.
You can't compare one deal with another just on the APR if there are other factors in play.
Fundamentally, do you want to buy it or PCP it?
What do you want to do at the end of the finance period, and how committed do you want to be?
Equally, do you want be committed between now and the end of the finance period?
Do you care about fixing your costs or are you happy to take a punt on the depreciation?
You can't compare one deal with another just on the APR if there are other factors in play.
Fundamentally, do you want to buy it or PCP it?
What do you want to do at the end of the finance period, and how committed do you want to be?
Equally, do you want be committed between now and the end of the finance period?
Do you care about fixing your costs or are you happy to take a punt on the depreciation?
Johnson897210 said:
PCP will usually be more expensive due to paying interest on the balloon over the term, look at the absolute amount of interest paid vs a loan.
It's the absolute total cost that matters, not the interest.But if you want to keep the car, the balloon payment may be more or less than what you'd pay on the forecourt for the same car
If you want to change the car at the end of the term, you're then comparing the balloon payment with the trade-in value. Which is different!
You know the balloon payment before you commit. You don't know the trade-in or retail price. Neither do you know what deals will be around at the time.
Choosing PCP changes your exposure to depreciation and risk.
I personally just buy what I can afford for cash. But I've known people get pretty good deals with PCP, and leasing, if you look at the total cost of changing your car for a new one every n years. I've seen fully costed examples of higher APR PCP being cheaper in actual £££ payments.
There's a value to knowing your car is sorted for the next n years, and exactly what it's costing you, there's a value to knowing you are free to change.
So a deal which is a little bit higher payment might be better value for some people.
OutInTheShed said:
It's the absolute total cost that matters, not the interest.
I've seen fully costed examples of higher APR PCP being cheaper in actual £££ payments.
Main Cost will be depreciation + interest. Interest therefore a key component.I've seen fully costed examples of higher APR PCP being cheaper in actual £££ payments.
Yes monthly payments may be lower with pcp BUT total cost likely to be higher due to the interest accruing on the balloon which is payable over the term.
Abc321 said:
My better half is wanting a new car. Dealers are offering 12%+ APR on PCP.
Car value circa £20-25k, with a 25-35% deposit.
Car is to be electric (if that makes any difference).
She has immaculate credit history, never missed any payments on anything, has a joint mortgage and a well paid job which she has been in for 10 years.
Anyone have any recommendations for nearer 8%? My bank is offering it me at 8.4%.
5.9% should be possible on a straight loan (better that over a longer time period than a high interest PCP).Car value circa £20-25k, with a 25-35% deposit.
Car is to be electric (if that makes any difference).
She has immaculate credit history, never missed any payments on anything, has a joint mortgage and a well paid job which she has been in for 10 years.
Anyone have any recommendations for nearer 8%? My bank is offering it me at 8.4%.
Check on MSE for details.
https://www.moneysavingexpert.com/loans/personal-c...
Theres also a loans eligibility checker that doesnt do a full credit check but will give a strong indication of likely best rate for her circumstances and eligibility
https://www.moneysavingexpert.com/eligibility/loan...
Johnson897210 said:
Main Cost will be depreciation + interest. Interest therefore a key component.
Yes monthly payments may be lower with pcp BUT total cost likely to be higher due to the interest accruing on the balloon which is payable over the term.
Interest is indeed a key component, but crystallizing the depreciation can be the killer.Yes monthly payments may be lower with pcp BUT total cost likely to be higher due to the interest accruing on the balloon which is payable over the term.
Look at what Motorway and WBAC are offering for 3 year old cars.
Borrowing against the fictitious balloon payment, which is often way more than the car's trade-in or private sale value, can be a better bet than actually paying it. It's all smoke and mirrors.
Of course if you buy the car with a loan and keep it for longer, you can avoid the realisation of your car's true value.
The big cost that people are in denial of is not really 'depreciation' it's the trade's bid/offer spread.
The motorway offer for a 3 year old car can be around 2/3 of its forecourt sticker price.
The 'value' of a used car is very different according to whether you're buying or selling.
I've not looked into the headline price but some companies are offering 0% apr on used EVs.
https://www.carsupermarket.com/electric-cars/elect...
https://www.carsupermarket.com/electric-cars/elect...
TheDrownedApe said:
I've not looked into the headline price but some companies are offering 0% apr on used EVs.
https://www.carsupermarket.com/electric-cars/elect...
What you save in interest on EVs will be offset in depreciation…https://www.carsupermarket.com/electric-cars/elect...
https://www.telegraph.co.uk/business/2025/05/29/el...
TheDrownedApe said:
I've not looked into the headline price but some companies are offering 0% apr on used EVs.
https://www.carsupermarket.com/electric-cars/elect...
Always worth checking the prices of used cars that have a 0% finance offer. The dealer will be funding that 0% offer themselves and its usually by upping the price of the car in the first place.https://www.carsupermarket.com/electric-cars/elect...
For example - this was the first one i checked - this Corsa
£13,497, 26K miles, Elite Nav with '0% finance'
https://www.carsupermarket.com/used-cars/vauxhall-...
Same car, 12K miles from another dealer - £9,990
https://www.autotrader.co.uk/car-details/202504010...
Edited by Deep Thought on Thursday 29th May 10:10
Abc321 said:
I do notice loans are sub-8%, however we would be going down PCP route so a bit of a different kettle.
The APR on PCPs will look higher due to paying interest on the final payment for the whole period.What's the car being looked at? Some new deals might be not far off with discounts, subsidised deposits and interest rates.
fridaypassion said:
With an EV would a lease not be cheaper? You are focusing on APR which will be dwarfed by depreciation. You don't want to end up owing the thing. I would guess a new one on low APR from a manufacturer could well be the cheapest way into an EV.
Some people are happy to end up owning the car, and will happily keep it until it becomes a shed.Other people will be happy to change it after a few years.
No point telling other people to want to own the thing or not, people have different ideas.
But if you are fairly sure whether you'll want to keep it or not, or for how long, you are better placed to make a decision on finance/buy/lease/pcp/HP or whatever.
Gassing Station | Car Buying | Top of Page | What's New | My Stuff