How do you use PCP?
Discussion
:-)
Seriously though I see a lot of PCP talk on here and some folk seem to think they have the moral high ground by either running sheds, using a bank loan or buying for cash as opposed to PCP.
I find the fascination with how other people fund their cars utterly bizarre if i'm honest.
Seriously though I see a lot of PCP talk on here and some folk seem to think they have the moral high ground by either running sheds, using a bank loan or buying for cash as opposed to PCP.
I find the fascination with how other people fund their cars utterly bizarre if i'm honest.
There is a few angles for me;
- getting you into a newer/better car which should be more reliable and not need as much maintenance. As an example, I worked out how much the maintenance on a Alfa 147 was over the 2 years I had it which averaged out at £110 a month. That then begs the question, why bother with older cars?
- If you have the cash in the bank, could you make more money on it elsewhere than the interest charges of a PCP deal? If you are sinking 30k on a Golf R on a 3 year PCP I bet you could make a better return investing that 30k.
- Better deals are available on PCP compared to cash. My FIL tends to put down around 90% deposits on a car and has a tiny bit on finance to take advantage of any manufacturer offers and also the salesman is likely to be more flexible
There is no right or wrong way of purchasing/owning a vehicle, those who want to have the same car for longer than 3 years will be better off on a HP or outright cash deal. Those who like to swap often are better with PCP or PCH deals. The people who might have changing circumstances are best looking at cash or PCP with larger deposits incase they need to change/sell early.
- getting you into a newer/better car which should be more reliable and not need as much maintenance. As an example, I worked out how much the maintenance on a Alfa 147 was over the 2 years I had it which averaged out at £110 a month. That then begs the question, why bother with older cars?
- If you have the cash in the bank, could you make more money on it elsewhere than the interest charges of a PCP deal? If you are sinking 30k on a Golf R on a 3 year PCP I bet you could make a better return investing that 30k.
- Better deals are available on PCP compared to cash. My FIL tends to put down around 90% deposits on a car and has a tiny bit on finance to take advantage of any manufacturer offers and also the salesman is likely to be more flexible
There is no right or wrong way of purchasing/owning a vehicle, those who want to have the same car for longer than 3 years will be better off on a HP or outright cash deal. Those who like to swap often are better with PCP or PCH deals. The people who might have changing circumstances are best looking at cash or PCP with larger deposits incase they need to change/sell early.
petrolhead4 said:
Simple question.
a. Do you use PCP to finance a car that you wouldn't otherwise have the cash for in bank? (i.e finance a £25,000 car with £15,000 in bank)
b. Do you use PCP to finance a car that you could otherwise pay in cash but would rather keep that cash for other purposes (i.e. finance a £25,000 with £50,000 in bank)
Either / or. a. Do you use PCP to finance a car that you wouldn't otherwise have the cash for in bank? (i.e finance a £25,000 car with £15,000 in bank)
b. Do you use PCP to finance a car that you could otherwise pay in cash but would rather keep that cash for other purposes (i.e. finance a £25,000 with £50,000 in bank)
And affordability is a function of your income and outgoings, not the amount of cash you have in the bank. Large sums of money sat in the bank is a prime example of financial illiteracy.
I'm still struggling to understand how a PCP is attractive to anyone? To buy a c£22,500 car the total repayment could be c£30,000 with limited mileage - why would you write off £7,500 if you could afford the car in the first place? Or is it as stated only for people who can't afford the car?
Joe5y said:
I'm still struggling to understand how a PCP is attractive to anyone? To buy a c£22,500 car the total repayment could be c£30,000 with limited mileage - why would you write off £7,500 if you could afford the car in the first place? Or is it as stated only for people who can't afford the car?
"I'm still struggling to understand how a mortgage is attractive to anyone? To buy a c£400,000 house the total repayment could be c£500,000 - why would you write off £100,000 if you could afford the house in the first place? Or is it as stated only for people who can't afford the house?"Car-Matt said:
:-)
Seriously though I see a lot of PCP talk on here and some folk seem to think they have the moral high ground by either running sheds, using a bank loan or buying for cash as opposed to PCP.
I find the fascination with how other people fund their cars utterly bizarre if i'm honest.
This is a motoring forum, most of us spend more time than is healthy working out what car we'd like to acquire next and how we could scrape the cash together. So naturally we are as interested in comparing finance options as teenage boys are in how to unhook a bra.Seriously though I see a lot of PCP talk on here and some folk seem to think they have the moral high ground by either running sheds, using a bank loan or buying for cash as opposed to PCP.
I find the fascination with how other people fund their cars utterly bizarre if i'm honest.
Joe5y said:
I'm still struggling to understand how a PCP is attractive to anyone? To buy a c£22,500 car the total repayment could be c£30,000 with limited mileage - why would you write off £7,500 if you could afford the car in the first place? Or is it as stated only for people who can't afford the car?
For those with a little bit of financial and accounting knowledge understand why PCP is an attractive offer. Also, read more about the product before stating lines like 'limited mileage'.antnee said:
Joe5y said:
I'm still struggling to understand how a PCP is attractive to anyone? To buy a c£22,500 car the total repayment could be c£30,000 with limited mileage - why would you write off £7,500 if you could afford the car in the first place? Or is it as stated only for people who can't afford the car?
For those with a little bit of financial and accounting knowledge understand why PCP is an attractive offer. Also, read more about the product before stating lines like 'limited mileage'.Gassing Station | Car Buying | Top of Page | What's New | My Stuff