Why the PH hatred for PCP?

[Carrot]

Sten. said:

This is all that matters.

That's what makes the difference between a good deal and a bad one and it's the reason I currently lease (not quite the same as PCP but the principle is the same). The £5k I'm paying to 'rent' my car will be less than the depreciation owning one over the same period.

If that means that some bitter old men on a forum think I'm living beyond me means, fine.

And don't forget, you are about to lose your job, and start travelling 300% more all of a sudden. These all seem to be pre-contract conditions of anything but cash purchases

[jimPH]

Sten. said:

This is all that matters.

That's what makes the difference between a good deal and a bad one and it's the reason I currently lease (not quite the same as PCP but the principle is the same). The £5k I'm paying to 'rent' my car will be less than the depreciation owning one over the same period.

If that means that some bitter old men on a forum think I'm living beyond me means, fine.

And this is exactly the distortion of reality that forms man maths. Why would someone compare the cost with something they can't afford?

Would you normally buy a new car outright? No? Then compare with the cost and depreciation of the car you would normally have bought. It's not rocket science. And don't start talking about serious maintenance issues. A 3 year old, 20-30k mile run of the mill car will require nothing more than routine servicing.

[anonymous-user]

jimPH said:

Sten. said:

This is all that matters.

That's what makes the difference between a good deal and a bad one and it's the reason I currently lease (not quite the same as PCP but the principle is the same). The £5k I'm paying to 'rent' my car will be less than the depreciation owning one over the same period.

If that means that some bitter old men on a forum think I'm living beyond me means, fine.

And this is exactly the distortion of reality that forms man maths. Why would someone compare the cost with something they can't afford?

Would you normally buy a new car outright? No? Then compare with the cost and depreciation of the car you would normally have bought. It's not rocket science. And don't start talking about serious maintenance issues. A 3 year old, 20-30k mile run of the mill car will require nothing more than routine servicing.

Outright ownership capital outlay vs cost to run is not an apples with apples comparison Jim.

[SWoll]

jimPH said:

A 3 year old, 20-30k mile run of the mill car will require nothing more than routine servicing.

That's good to know. I've had 3 cars of exactly that vintage over the years that had I not bought with extended manufacturers warranty would have cost many £1000's of pounds to put right and GG is full of similar stories. The're the primary reason I now lease.

Funny how these often referred to "overly complicated modern cars" are suddenly paragons of reliability when the argument suits isn't it?

[Sten.]

jimPH said:

Sten. said:

This is all that matters.

That's what makes the difference between a good deal and a bad one and it's the reason I currently lease (not quite the same as PCP but the principle is the same). The £5k I'm paying to 'rent' my car will be less than the depreciation owning one over the same period.

If that means that some bitter old men on a forum think I'm living beyond me means, fine.

And this is exactly the distortion of reality that forms man maths. Why would someone compare the cost with something they can't afford?

Would you normally buy a new car outright? No? Then compare with the cost and depreciation of the car you would normally have bought. It's not rocket science. And don't start talking about serious maintenance issues. A 3 year old, 20-30k mile run of the mill car will require nothing more than routine servicing.

The new vs. used debate is for a different thread surely?

The fact that a used car is cheaper than a new one should come as no surprise to anyone.

I've had many used cars in the past, these days I want to choose the colour and options I like, I want it to be shiny and new, latest technology etc and I'm prepared to pay for it.. the cheapest way possible

[InitialDave]

jimPH said:

And this is exactly the distortion of reality that forms man maths. Why would someone compare the cost with something they can't afford?

How does it distort reality? How can they not afford it?

There's nothing wrong with choosing to buy a car on the basis of paying monthly effectively "for the use of it", all that matters is people know how much they're spending, and are doing so with full awareness of any restrictions that come with what they're choosing to do.

jimPH said:

A 3 year old, 20-30k mile run of the mill car will require nothing more than routine servicing.

Your choice to make that bet. It might cost you... well, you don't know how much, do you?

Other people are free to choose not to, and get a new car with factory warranty. They know what this is costing them.

[Mandat]

Gordon_Roslin said:

choice is yours.

Amen.

/End of thread

[jimPH]

InitialDave said:

jimPH said:

And this is exactly the distortion of reality that forms man maths. Why would someone compare the cost with something they can't afford?

How does it distort reality? How can they not afford it?

I just told you how. Look at how people base their latest new car.

"PCP works out cheaper than if I bought it cash"

"You have the cash to buy outright?"

"No, but if I did have the cash, PCP would be cheaper because of (insert hypothetical cost)"

"So what would you have bought if there was no PCP"

"A used car within my budget"

"Would PCP be cheaper than that?"

"No. But then I like to compare apples with apples I can't afford"

[Carrot]

jimPH said:

InitialDave said:

jimPH said:

And this is exactly the distortion of reality that forms man maths. Why would someone compare the cost with something they can't afford?

How does it distort reality? How can they not afford it?

I just told you how. Look at how people base their latest new car.

"PCP works out cheaper than if I bought it cash"

"You have the cash to buy outright?"

"No, but if I did have the cash, PCP would be cheaper because of (insert hypothetical cost)"

"So what would you have bought if there was no PCP"

"A used car within my budget"

"Would PCP be cheaper than that?"

"No. But then I like to compare apples with apples I can't afford"

It must be a fun place living inside your head.

[bad company]

Has anybody said ‘let someone else take the depreciation yet’?

PCP is cheap and convenient for very many people. It also reduces risk, just ask someone who paid cash for a new big diesel a year or 2 back.

[InitialDave]

jimPH said:

I just told you how.

No you didn't. You just blathered on based on your own silly ideas of how other people should manage their finances.

Reality is undistorted. There are finance products people can choose to use to have things they want without having the money to buy them outright. Why they want to is up to them. The decision to do so is up to them.

If you don't think a new car is worth taking out finance on when you only have used car money in cash, no-one's forcing you to.

[av185]

bad company said:

Has anybody said ‘let someone else take the depreciation yet’?

PCP is cheap and convenient for very many people. It also reduces risk, just ask someone who paid cash for a new big diesel a year or 2 back.

It can reduce risk but this is not a given.

Depending on the 'big new diesel', the majority of used modern diesels have actually increased in value relatively due to falling numbers of new diesel registrations and subsequent restricted supply of used vehicles which are still in great demand contrary to the widely held internet myth.

So to have paid cash for the majority of diesel models a few years back would have been more financially astute than pcping, all other things being equal.

Edited by av185 on Tuesday 22 January 10:50

[Deep Thought]

And round and round we go.....

[bad company]

av185 said:

bad company said:

Has anybody said ‘let someone else take the depreciation yet’?

PCP is cheap and convenient for very many people. It also reduces risk, just ask someone who paid cash for a new big diesel a year or 2 back.

It can reduce risk but this is not a given.

Depending on the 'big new diesel', the majority of used modern diesels have actually increased in value relatively due to falling numbers of new diesel registrations and subsequent restricted supply of used vehicles which are still in great demand contrary to the widely held internet myth.

So to have paid cash for the majority of diesel models a few years back would have been more financially astute than pcping, all other things being equal.

Edited by av185 on Tuesday 22 January 10:50

I did say reduce the risk. With pcp you have the option to return the vehicle to the finance company so it becomes their problem.

I’m not so sure about diesels increasing in value:-

https://www.am-online.com/news/used-cars/2019/01/1...

Life’s a risk. I just buy what I want on pcp and make the decision to sell or return at the end of the term which works for me. I also get the spec the car exactly how I want it which is important to me.

[K50 DEL]

jimPH said:

A 3 year old, 20-30k mile run of the mill car will require nothing more than routine servicing.

I'd say not just a 3 year old car either, and that's one of the reasons why I choose to buy my cars outright, financially a PCP type deal just makes no sense in my circumstances... I'm not saying that they're the wrong choice for everyone but for me it was a no-brainer to buy.

28 months ago I paid £11k for a 5yr old BMW X1 with 43k miles on the clock
It's now covered 89k miles and is probably worth around £8k

With the exception of servicing and tyres it has cost me nothing in that time.

This makes depreciation my only monthly cost at about £107 per.

I don't believe it is possible to PCP (or finance in any other way) a vehicle on a 20k mile a year contract for anything close to £107pcm
ergo cash purchase is the only way that makes sense. (for me)

[anonymous-user]

K50 DEL said:

jimPH said:

A 3 year old, 20-30k mile run of the mill car will require nothing more than routine servicing.

I'd say not just a 3 year old car either, and that's one of the reasons why I choose to buy my cars outright, financially a PCP type deal just makes no sense in my circumstances... I'm not saying that they're the wrong choice for everyone but for me it was a no-brainer to buy.

28 months ago I paid £11k for a 5yr old BMW X1 with 43k miles on the clock
It's now covered 89k miles and is probably worth around £8k

With the exception of servicing and tyres it has cost me nothing in that time.

This makes depreciation my only monthly cost at about £107 per.

I don't believe it is possible to PCP (or finance in any other way) a vehicle on a 20k mile a year contract for anything close to £107pcm
ergo cash purchase is the only way that makes sense. (for me)

And for you that works and seems to work well

It’s also a great example as to how everybody’s frame of reference is different

[jimPH]

InitialDave said:

jimPH said:

I just told you how.

No you didn't. You just blathered on based on your own silly ideas of how other people should manage their finances.

Reality is undistorted. There are finance products people can choose to use to have things they want without having the money to buy them outright. Why they want to is up to them. The decision to do so is up to them.

If you don't think a new car is worth taking out finance on when you only have used car money in cash, no-one's forcing you to.

Thanks Dave. But as usual, you've added another element that we aren't discussing. I'm not trying to tell people what to do, I'm pointing out the irony in their decision making, that is, it's cheaper than using a buying method they can't afford.

When you stack it up against the buying method they would have otherwise used, they're paying more. But then that's the beauty of man maths. They are fully welcome to it, in fact I applaud it; it won't stop me from pointing it out though.

[bad company]

jimPH said:

Thanks Dave. But as usual, you've added another element that we aren't discussing. I'm not trying to tell people what to do, I'm pointing out the irony in their decision making, that is, it's cheaper than using a buying method they can't afford.

When you stack it up against the buying method they would have otherwise used, they're paying more. But then that's the beauty of man maths. They are fully welcome to it, in fact I applaud it; it won't stop me from pointing it out though.

Many of us can afford to pay cash but prefer the flexibility of pcp .

[nickfrog]

jimPH said:

Thanks Dave. But as usual, you've added another element that we aren't discussing. I'm not trying to tell people what to do, I'm pointing out the irony in their decision making, that is, it's cheaper than using a buying method they can't afford.

When you stack it up against the buying method they would have otherwise used, they're paying more. But then that's the beauty of man maths. They are fully welcome to it, in fact I applaud it; it won't stop me from pointing it out though.

For as long as you refuse to understand that the choice is not binary, you'll carry on not accepting that IT DEPENDS.

Some cash deals are terrible, some lease/pcp deals are terrible.
Some cash deals are superb, some lease/pcp deals are superb

Drawing the conclusion that renting is more expensive than owning is as absurd as drawing the conclusion that it's cheaper. Again, IT DEPENDS.

Our current lease deals comfortably beat depreciation vs discounted new price. If I got the same cars today it wouldn't. Geddit ? Pricing is very fluid, it changes all the times based on basic yield management, market forces and where the support (discount) is placed.

I could buy those cars but I preferred to trigger 40% tax relief from HMRC and pay less. Is that man maths ?

[jimPH]

nickfrog said:

For as long as you refuse to understand that the choice is not binary, you'll carry on not accepting that IT DEPENDS.

Some cash deals are terrible, some lease/pcp deals are terrible.
Some cash deals are superb, some lease/pcp deals are superb

Drawing the conclusion that renting is more expensive than owning is as absurd as drawing the conclusion that it's cheaper. Again, IT DEPENDS.

Our current lease deals comfortably beat depreciation vs discounted new price. If I got the same cars today it wouldn't. Geddit ? Pricing is very fluid, it changes all the times based on basic yield management, market forces and where the support (discount) is placed.

I could buy those cars but I preferred to trigger 40% tax relief from HMRC and pay less. Is that man maths ?

Oh lordy. Here I am talking about the seats and your talking about the whole car. Please stick to the specific element I am discussing.

Will you agree that the majority of people cannot afford to buy outright. I agree that SOME people can. But MOST cannot. In the real world that is. Not PH fantasy Dreamland.

Would you agree that anyone justifying their buying decision against a payment method they are unable to use (but not everyone), are not being honest with their decision. Moreover it demonstrates the effectiveness of the sales patter they've believed. Because the new car buying scenario crops up so often if fed up of hearing it. The fact is, you are only saving money if it costs you less than you were paying before. Not against what you might have paid. It's a good sales tactic though, I'll give them that.