Why the PH hatred for PCP?

[Deep Thought]

Bustedmattress said:

nickfrog said:

I am not surprised.

I am with dmsims I don’t follow what you are saying now. Is it that you may buy sometimes as against take a lease and that this depends on the length of the warranty? If so isn’t that precisely the point being put to you?

Yes, i can see why it would be a problem for binary thinkers

I believe hes saying he does something called "looking objectively" at all the options based on what car he wants, how long he plans to keep it and what his own personal preferences / requirements are of said vehicle. He then decides on what the cheapest option is over that timeframe.

ie, he doesnt default to one particular method of funding, nor does he rule any out based on personal prejudices, a chip on his shoulder, etc, etc.

Crazy, i know.

What bemuses me is we're on a motoring forum here whereby motoring enthusiasts often chose cars based on emotional reasons, yet some people seem to be suggesting we all should buy the cars with the longest warranty? Lets all buy KIAs. TBH thats mumsnet thinking, not PH.

Edited by Deep Thought on Sunday 30th December 09:29

[Deep Thought]

I still dont get the "PCP is bad because a minority of people mis-use it or get themselves into financial difficulties by overstretching themselves", therefore i will get angry about other people using it mentality.

Surely that sort of logic could be used for pretty much any product?

• Credit cards are bad because some people rack up debt
• Mortgages are bad because some people took on mortgages on houses that then crashed in value and they lost their homes
• Cars themselves are bad because some people buy cars that are beyond their driving skills and crash them and kill themselves and / or others.

[Deep Thought]

Also the "oh oh if you use PCP for 30 years it costs you ££,£££ more". Uh huh. It might well do, but that doesnt make it a bad product for those of use who dip in and out of it and as when it suits them to do so.

I havent financed a car on PCP for around 8 years. I've never yet used PCH. I might in the future. I might not. That doesnt stop me being objective about it as a funding option though, even though i might well rule it out if its too expensive on any particular occasion.

[Monkeylegend]

Kermit power said:

Just to muddy the waters a bit further, I've been looking at 1-2 year old cars on Autotrader.

I kept to PHEVs, since I have one at the moment and like it, so the Merc C350e, Volvo XC90, X5 and so on...

How on earth do some people rack up such high mileages?!?!? They almost all seem to have done around 50k miles per annum!

I know my mileage is low at around 7k per annum, but 50k? How do people find the time to actually do any work when they stop driving???

Maybe their car is their workplace. Those types of cars will now be coming more popular with the taxi / chauffeur trade due to tightening legislation, so easy to clock up 90/100k mile pa.

[Deep Thought]

Oh and for all the hate for new car PCPs it creates a vast amount of choice in the used market at sensible prices if people want to buy a 2-3 year old car instead.

Surely its a win-win rather than something to be outraged about?

[nickfrog]

Bustedmattress said:

nickfrog said:

I am not surprised.

I am with dmsims I don’t follow what you are saying now. Is it that you may buy sometimes as against take a lease and that this depends on the length of the warranty? If so isn’t that precisely the point being put to you?

The point put to me was that I didn't research the warranty on the cars I wanted and on which the lease deals would be beating depreciation IMO (A4 and Karoq). This can be mitigated by buying and keeping longer than the 2/3 years term of course. But I did research and knew the warranty is 3 years on those cars and that extending the warranty would attract an additional cost that worked against me (amongst a raft of other parameters)

It's entirely different set of calculations and predictions on cars with a 5 or 7 warranty that may or may not result in the same outcome, depending on all other parameters. A friend just bought a year old Kia Ceed for his son and looked at leasing but the case for buying was obvious.

[Bustedmattress]

nickfrog said:

The point put to me was that I didn't research the warranty on the cars I wanted and on which the lease deals would be beating depreciation IMO (A4 and Karoq). This can be mitigated by buying and keeping longer than the 2/3 years term of course. But I did research and knew the warranty is 3 years on those cars and that extending the warranty would attract an additional cost that worked against me (amongst a raft of other parameters)

It's entirely different set of calculations and predictions on cars with a 5 or 7 warranty that may or may not result in the same outcome, depending on all other parameters. A friend just bought a year old Kia Ceed for his son and looked at leasing but the case for buying was obvious.

Good for you. So you may well take a lease is where that lands I think. Or you may not. It depends on the length of the warranty. I think I see where you are going. Possibly.

Really interesting discussion and thread. My cars are all old with the youngest at 10 years and the oldest at 53 years old. Really not into modern stuff so this is all of interest only. It is a great thread though. However, in my most relevant experience, the last car I bought brand new was in 2006 an Audi A6 Tdi. Paid cash - no finance. A very capable car with a boot the size of a skip and an average, in my 5 years of ownership, of 42 mpg. I can’t recall what the warranty was. Probably three years. I do recall that it only needed servicing every two years and didn’t go wrong - a parking sensor and a battery I think. Maybe two parking sensors. In the ‘70s I remember my Dad’s new cars just not starting in the damp. Or rusting within three years. Back then a long warranty would be needed for sure. I am sure my A6 went off to be a taxi somewhere. I had put 55k on it. It was good for many many more trouble free miles. That must be the norm now surely? Even with the ‘budget’ makes.

If there is merit in what I say (and I accept I am just dipping into the last experience I had of buying a new car) then doesn’t the whole length of warranty thing fade in significance when you are reckoning up the numbers? Somebody who posted four posts on the bounce above (and seemed very emotional about it all - hate is a strong word sir) said, understandably, actually it is not always a balance sheet style, finance decision. I get that all day long. All of my five cars are heart not head decisions. The exhaust system for the Forester was two and a half times its value. Couldn’t bring myself to scrap the car - it is just so lovely and boxy. Is that the better answer? Actually some times people just want a shiny new car they couldnt otherwise afford or finance and to hell with the cost.

BM

[Deep Thought]

Bustedmattress said:

If there is merit in what I say (and I accept I am just dipping into the last experience I had of buying a new car) then doesn’t the whole length of warranty thing fade in significance when you are reckoning up the numbers? Somebody who posted four posts on the bounce above (and seemed very emotional about it all - hate is a strong word sir) said, understandably, actually it is not always a balance sheet style, finance decision. I get that all day long. All of my five cars are heart not head decisions. The exhaust system for the Forester was two and a half times its value. Couldn’t bring myself to scrap the car - it is just so lovely and boxy. Is that the better answer? Actually some times people just want a shiny new car they couldnt otherwise afford or finance and to hell with the cost.

BM

Not emotional, bemused.

And the "hate" reference came from the title of the thread.

My next car is likely to be a sub £1,000 petrol Focus, as that what suits my likely future needs best - if i should need a car at all.

Presently i have no car at all as i dont need one.

[nickfrog]

Bustedmattress said:

nickfrog said:

The point put to me was that I didn't research the warranty on the cars I wanted and on which the lease deals would be beating depreciation IMO (A4 and Karoq). This can be mitigated by buying and keeping longer than the 2/3 years term of course. But I did research and knew the warranty is 3 years on those cars and that extending the warranty would attract an additional cost that worked against me (amongst a raft of other parameters)

It's entirely different set of calculations and predictions on cars with a 5 or 7 warranty that may or may not result in the same outcome, depending on all other parameters. A friend just bought a year old Kia Ceed for his son and looked at leasing but the case for buying was obvious.

Good for you. So you may well take a lease is where that lands I think. Or you may not. It depends on the length of the warranty. I think I see where you are going. Possibly.

Not sure you do, as I said, the warranty length or additional cost to extend is only one parameter amongst others.

Bustedmattress said:

Really interesting discussion and thread. My cars are all old with the youngest at 10 years and the oldest at 53 years old. Really not into modern stuff so this is all of interest only. It is a great thread though. However, in my most relevant experience, the last car I bought brand new was in 2006 an Audi A6 Tdi. Paid cash - no finance. A very capable car with a boot the size of a skip and an average, in my 5 years of ownership, of 42 mpg. I can’t recall what the warranty was. Probably three years. I do recall that it only needed servicing every two years and didn’t go wrong - a parking sensor and a battery I think. Maybe two parking sensors. In the ‘70s I remember my Dad’s new cars just not starting in the damp. Or rusting within three years. Back then a long warranty would be needed for sure. I am sure my A6 went off to be a taxi somewhere. I had put 55k on it. It was good for many many more trouble free miles. That must be the norm now surely? Even with the ‘budget’ makes.

If there is merit in what I say (and I accept I am just dipping into the last experience I had of buying a new car) then doesn’t the whole length of warranty thing fade in significance when you are reckoning up the numbers? Somebody who posted four posts on the bounce above (and seemed very emotional about it all - hate is a strong word sir) said, understandably, actually it is not always a balance sheet style, finance decision. I get that all day long. All of my five cars are heart not head decisions. The exhaust system for the Forester was two and a half times its value. Couldn’t bring myself to scrap the car - it is just so lovely and boxy. Is that the better answer? Actually some times people just want a shiny new car they couldnt otherwise afford or finance and to hell with the cost.
BM

Good for you on getting the most out of the A6! I am not sure a sample of 1 is a good indicator of reliability but still.

I don't like old cars but I have no issues with anyone getting the most out of them and would not draw any conclusion about what they can afford or not.

[Kiraanastasiax]

I’ve just managed to escape from PCP. I got a bad deal although didn’t realise it at the time. Spent £429 on servicing in 2 years and all they really did was change the oil a couple of filters nothing out of the ordinary! This was on an entry level seat Ibiza. I was never going to be in equity so would either have to pay £210 a month for the same model or put in a fairly big deposit.
A friend has an excellent deal on an Audi A4 s line lease that is 6 x 23 and £207 a month including a service at local Audi garage. I don’t know about the equity on Audi pcp but what a good deal that is.
I have decided to buy a second hand car for the time being but will look at short term leasing in the future. Pcp is overrated as interest rates are crazy on second hand!

[4Q]

I’ve lost around £20k in value plus spent around £6K in repairs (and another £10k plus in warranty work) in the four years that I’ve had my Disco which is now 8 years old.
We went to our local dealer on Saturday to look at another 3 year old Disco, and instead of forking out a lump of cash which was going to burn at a similar rate of depreciation etc we ended up PCP ing a brand new mid range Velar (240 SE R-Dynamic) with a few factory options at £528 a month over 4 years - a total of £27k incl the deposit - so about the same as the depreciation on a 3 year old car over the same period. Driving a new car under manufacturers warranty. Plus I can choose to buy it in 4 years for the same amount as I was going to spend on a similar aged car now. Yes I’m renting, but unless I’m going to buy a shed with no value, or an exclusive supercar which is rising in value, however I choose to fund my vehicle is going to cost me money.
As another example, I’ve just sent back an A45 AMG a couple of months ago which I had for 36 months, it cost a total of £13k in payments. Looking at the price of a three year old one now they are about £25-28k retail so I would’ve lost £20k in depreciation if I’d bought it new! Yes I could’ve just bought a £13k car in the first place but it wouldn’t have been an A45.

[dmsims]

4Q said:

I’ve lost around £20k in value plus spent around £6K in repairs (and another £10k plus in warranty work) in the four years that I’ve had my Disco which is now 8 years old.
We went to our local dealer on Saturday to look at another 3 year old Disco, and instead of forking out a lump of cash which was going to burn at a similar rate of depreciation etc we ended up PCP ing a brand new mid range Velar (240 SE R-Dynamic) with a few factory options at £528 a month over 4 years - a total of £27k incl the deposit - so about the same as the depreciation on a 3 year old car over the same period. Driving a new car under manufacturers warranty. Plus I can choose to buy it in 4 years for the same amount as I was going to spend on a similar aged car now. Yes I’m renting, but unless I’m going to buy a shed with no value, or an exclusive supercar which is rising in value, however I choose to fund my vehicle is going to cost me money.
As another example, I’ve just sent back an A45 AMG a couple of months ago which I had for 36 months, it cost a total of £13k in payments. Looking at the price of a three year old one now they are about £25-28k retail so I would’ve lost £20k in depreciation if I’d bought it new! Yes I could’ve just bought a £13k car in the first place but it wouldn’t have been an A45.

So you buy JLR and it's a shed - no surprise
Buy new and lose a load in depreciation - no surprise

[Deep Thought]

Kiraanastasiax said:

Pcp is overrated as interest rates are crazy on second hand!

Your mistake was using PCP for a second hand purchase without checking the APR and / or manufacturers incentives. Rates on used car PCP has been getting steadily worse for some time. Last time I checked BMW for example were looking 12.4%. That could amount to £10k of interest on a £30k car. Conversely they were offering 0% APR, massive discounts and from memory financial incentives to finance a new 3 series.

PCP is not a one size fits all solution.

[Monkeylegend]

4Q said:

I’ve lost around £20k in value plus spent around £6K in repairs (and another £10k plus in warranty work) in the four years that I’ve had my Disco which is now 8 years old.

And you want another one

[Welshbeef]

Monkeylegend said:

4Q said:

I’ve lost around £20k in value plus spent around £6K in repairs (and another £10k plus in warranty work) in the four years that I’ve had my Disco which is now 8 years old.

And you want another one

His previous one was the old shape the new model is stunning - I’ve been a passenger in the T8 that’s a car I’d love to own but couldn’t justify its high buy proce

[4Q]

Monkeylegend said:

And you want another one

Pick any large SUV and it’s going to be a similar story.

[4Q]

dmsims said:

So you buy JLR and it's a shed - no surprise
Buy new and lose a load in depreciation - no surprise

It was 4 years old when I bought it. A three year old Disco 4 is around £30k now and looking at older models will be worth less than 10 in 4 years time

Edited by 4Q on Tuesday 1st January 14:53

[syl]

LR surprisingly good for depreciation. J much less so!

[nickfrog]

dmsims said:

Buy new and lose a load in depreciation - no surprise

Yes most of the time although there are exceptions, we did really well on the M135i from new courtesy of huge discounts. Lost little selling after 18 months.

Initial depreciation on new is the key reason why keeping an open mind about how to finance it is key to mitigate it and exploiting the manufacturer's support (discounts) in whatever form they come.

[Kermit power]

Dr Jekyll said:

Kermit power said:

Just to muddy the waters a bit further, I've been looking at 1-2 year old cars on Autotrader.

I kept to PHEVs, since I have one at the moment and like it, so the Merc C350e, Volvo XC90, X5 and so on...

How on earth do some people rack up such high mileages?!?!? They almost all seem to have done around 50k miles per annum!

I know my mileage is low at around 7k per annum, but 50k? How do people find the time to actually do any work when they stop driving???

A hundred miles each way commute can be only 1 1/2 to 2 hours each way.

You say that like you think it's sane and normal!!!