Buying a car, Pay cash, or PCP,
Discussion
Hi all,
Wife is about to buy a new Tesla. model 3, £50,000
Delivery due in 3 - 4 weeks, as ordered about 9 months ago.
Her has the £50,000.
Her will be keeping her new car for 5 or 6 years, so will pay the final payment to buy the car.
I mentioned to her, that instead of dropping the full £50,000 on Mr Musk's desk, her could opt for a PCP
A PCP would want £6000 deposit, and £677 per month for 48 months.
10,000 miles is well within her annual usage.
Final payment £18,348
Her salary, could very easily pay the £677 a month.
Her could keep the £46,000 in her bank, keep it for a rainy day, or buy solar panels and battery, and have continual free electric fuel for around £20,000
I am not sure about the solar aspect, as to fill the battery off peak with Octopus, would cost as little as £6.10 from empty, giving her a weeks commuting. To me , solar doesn't seem to make financial sense.
Final payment missed out - sorry
Wife is about to buy a new Tesla. model 3, £50,000
Delivery due in 3 - 4 weeks, as ordered about 9 months ago.
Her has the £50,000.
Her will be keeping her new car for 5 or 6 years, so will pay the final payment to buy the car.
I mentioned to her, that instead of dropping the full £50,000 on Mr Musk's desk, her could opt for a PCP
A PCP would want £6000 deposit, and £677 per month for 48 months.
10,000 miles is well within her annual usage.
Final payment £18,348
= What's the biggest downside of the PCP I listed above ?=
Her salary, could very easily pay the £677 a month.
Her could keep the £46,000 in her bank, keep it for a rainy day, or buy solar panels and battery, and have continual free electric fuel for around £20,000
I am not sure about the solar aspect, as to fill the battery off peak with Octopus, would cost as little as £6.10 from empty, giving her a weeks commuting. To me , solar doesn't seem to make financial sense.
Final payment missed out - sorry
Edited by Register1 on Sunday 6th November 19:57
ka anything else is just lameandburg said:
I’ll go the other way here
EVs are advancing so quickly now that I’d not consider buying one to run for 5 years+
PCP if you can get a low rate over 2/3 years and then trade it in on the latest.
Which term to take ?EVs are advancing so quickly now that I’d not consider buying one to run for 5 years+
PCP if you can get a low rate over 2/3 years and then trade it in on the latest.
Tesla fixed rate interest 5,9% on all 3 plans.
24 month £1043 per month for 24 months +£22,316 final payment
36 months £800 per month for 36 months + £20,332 final payment
48 months £677 per month for 48 months + £18,348 final payment
Tesla fixed rate interest 5,9%
£6000 deposit
£677 per month for 48 months = £32,496
Final payment £18,348
Register1 said:
Hi all,
Wife is about to buy a new Tesla. £50,000
Her has the £50,000.
Her will be keeping her new car for 5 or 6 years, so will pay the final payment to buy the car.
I mentioned to her, that instead of dropping the full £50,000 on Mr Musk's desk, her could opt for a PCP
A PCP would want £6000 deposit, and £677 per month for 48 months.
10,000 miles is well within her annual usage.
[b]What's the biggest downside of the PCP I listed above ?[b/]
Her salary, could very easily pay the £677 a month.
Her could keep the £46,000 in her bank, keep it for a rainy day, or buy solar panels and battery, and have continual free electric fuel for around £20,000
I am not sure about the solar aspect, as to fill the battery off peak with Octopus, would cost as little as £6.10 from empty, giving her a weeks commuting. To me , solar doesn't seem to make financial sense.
The downside is the amount of interest payable on the balloon will be greater with PCP than with straight forward HP.Wife is about to buy a new Tesla. £50,000
Her has the £50,000.
Her will be keeping her new car for 5 or 6 years, so will pay the final payment to buy the car.
I mentioned to her, that instead of dropping the full £50,000 on Mr Musk's desk, her could opt for a PCP
A PCP would want £6000 deposit, and £677 per month for 48 months.
10,000 miles is well within her annual usage.
[b]What's the biggest downside of the PCP I listed above ?[b/]
Her salary, could very easily pay the £677 a month.
Her could keep the £46,000 in her bank, keep it for a rainy day, or buy solar panels and battery, and have continual free electric fuel for around £20,000
I am not sure about the solar aspect, as to fill the battery off peak with Octopus, would cost as little as £6.10 from empty, giving her a weeks commuting. To me , solar doesn't seem to make financial sense.
She could consider increasing the deposit amount to lower the amount borrowed (& thus interest payable), whilst still keeping a sizeable chunk of cash in the bank for a rainy day.
Also, the mileage allowances are irrelevant if you don't intend on returning the car to the finance company, and particularly if the plan is to complete the purchase at the end of the term.
Mandat said:
Register1 said:
Hi all,
Wife is about to buy a new Tesla. £50,000
Her has the £50,000.
Her will be keeping her new car for 5 or 6 years, so will pay the final payment to buy the car.
I mentioned to her, that instead of dropping the full £50,000 on Mr Musk's desk, her could opt for a PCP
A PCP would want £6000 deposit, and £677 per month for 48 months.
10,000 miles is well within her annual usage.
[b]What's the biggest downside of the PCP I listed above ?[b/]
Her salary, could very easily pay the £677 a month.
Her could keep the £46,000 in her bank, keep it for a rainy day, or buy solar panels and battery, and have continual free electric fuel for around £20,000
I am not sure about the solar aspect, as to fill the battery off peak with Octopus, would cost as little as £6.10 from empty, giving her a weeks commuting. To me , solar doesn't seem to make financial sense.
The downside is the amount of interest payable on the balloon will be greater with PCP than with straight forward HP.Wife is about to buy a new Tesla. £50,000
Her has the £50,000.
Her will be keeping her new car for 5 or 6 years, so will pay the final payment to buy the car.
I mentioned to her, that instead of dropping the full £50,000 on Mr Musk's desk, her could opt for a PCP
A PCP would want £6000 deposit, and £677 per month for 48 months.
10,000 miles is well within her annual usage.
[b]What's the biggest downside of the PCP I listed above ?[b/]
Her salary, could very easily pay the £677 a month.
Her could keep the £46,000 in her bank, keep it for a rainy day, or buy solar panels and battery, and have continual free electric fuel for around £20,000
I am not sure about the solar aspect, as to fill the battery off peak with Octopus, would cost as little as £6.10 from empty, giving her a weeks commuting. To me , solar doesn't seem to make financial sense.
She could consider increasing the deposit amount to lower the amount borrowed (& thus interest payable), whilst still keeping a sizeable chunk of cash in the bank for a rainy day.
Also, the mileage allowances are irrelevant if you don't intend on returning the car to the finance company, and particularly if the plan is to complete the purchase at the end of the term.
I take your point, I am still confused, so looking for folk like you to advise.
So if her put for example £10,000, or £15,000 or say £20,000 how far to go before it's back to paying £50,000 for outright purchase ?
Edit.
Tesla limit for deposit is £14,877
So if put £14,000 then the 48 monthly payments drop to £490 per month
Edited by Register1 on Sunday 6th November 19:55
Register1 said:
Hi Mandat,
I take your point, I am still confused, so looking for folk like you to advise.
So if her put for example £10,000, or £15,000 or say £20,000 how far to go before it's back to paying £50,000 for outright purchase ?
Edit.
Tesla limit for deposit is £14,877
So if put £14,000 then the 48 monthly payments drop to £490 per month
Think this is what I would do although as others have said, with the technology moving so quickly, maybe the better option would be to go for the 3 year option and then see how the land lies then.I take your point, I am still confused, so looking for folk like you to advise.
So if her put for example £10,000, or £15,000 or say £20,000 how far to go before it's back to paying £50,000 for outright purchase ?
Edit.
Tesla limit for deposit is £14,877
So if put £14,000 then the 48 monthly payments drop to £490 per month
Edited by Register1 on Sunday 6th November 19:55
If the car is worth more, then pay the final payment, if not, hand the car back with nothing more to pay.
ETA - you can always pay off some of the PCP, leaving the residual in place, once you have the car, to reduce the interest cost.
I have done that with several PCPs over the years -
Edited by Boringvolvodriver on Sunday 6th November 21:04
Ultimately it comes down to what else you can do with the money. If the answer to that is little else, then buy it outright and be done.
If the cash can usefully be rerouted to buy some more stock for your business perhaps, which over the next three years can be recycled three times then the amount of interest you pay on the PCP deal becomes almost irrelevant.
I'm not in ponzi schemes or investments. All my money is tied up in stock for my business which allows it to run debt free and be free of being answerable to a bank. If I tried to remove the cash from the business to buy "stuff" then I'm removing cashflow, stock funding, plus paying punitive amounts of tax to draw it as income.
So when I want a new toy, it gets financed.
So the only straight answer is, is the money going to be better employed somewhere else?
If the cash can usefully be rerouted to buy some more stock for your business perhaps, which over the next three years can be recycled three times then the amount of interest you pay on the PCP deal becomes almost irrelevant.
I'm not in ponzi schemes or investments. All my money is tied up in stock for my business which allows it to run debt free and be free of being answerable to a bank. If I tried to remove the cash from the business to buy "stuff" then I'm removing cashflow, stock funding, plus paying punitive amounts of tax to draw it as income.
So when I want a new toy, it gets financed.
So the only straight answer is, is the money going to be better employed somewhere else?
Thanks all for the suggestions.
We have decided to put £6000 deposit.
Take the PCP over 36 months
36 months £800 per month for 36 months + £20,332 final payment
£800 a month
Then pay the balloon payment at end and keep the car.
So the £44,000 cash that we haven't put to the car, can go back and try earn some money somewhere.
We have decided to put £6000 deposit.
Take the PCP over 36 months
36 months £800 per month for 36 months + £20,332 final payment
£800 a month
Then pay the balloon payment at end and keep the car.
So the £44,000 cash that we haven't put to the car, can go back and try earn some money somewhere.
Register1 said:
Thanks all for the suggestions.
We have decided to put £6000 deposit.
Take the PCP over 36 months
36 months £800 per month for 36 months + £20,332 final payment
£800 a month
Then pay the balloon payment at end and keep the car.
So the £44,000 cash that we haven't put to the car, can go back and try earn some money somewhere.
Given the interest rates available, unless you have another way of getting a good return, then I personally would pay down the PCP so as just leave the balloon - you may struggle to get a guaranteed return of more than 5.9%.We have decided to put £6000 deposit.
Take the PCP over 36 months
36 months £800 per month for 36 months + £20,332 final payment
£800 a month
Then pay the balloon payment at end and keep the car.
So the £44,000 cash that we haven't put to the car, can go back and try earn some money somewhere.
If you wait a month, then I think the finance company will allow you to do this if you ring them up.
That way you are reducing the interest you are paying but still have the guarantee of the final payment options in 3 years
Gassing Station | Business | Top of Page | What's New | My Stuff