Discussion
My mrs. is after a car and fancies something like a fiesta, alfa mito, citroen ds3, vw polo etc.
She is looking at either new or nearly new and has been considering PCP deals etc.
I know the standard PH answer from people who don't live in the real world is don't get finance but for those who do live in the real world and understand the concept of if you can afford the payments then why does it matter, what would you suggest?
In terms of deposit she will be trading her old car in which I think in px she'd get around £700 and then she wants to pay around £200 a month.
any opinions on the cars I mentioned also would be good please, I am trying to steer her towards the fiesta or the DS3 myself.
Cheers.
She is looking at either new or nearly new and has been considering PCP deals etc.
I know the standard PH answer from people who don't live in the real world is don't get finance but for those who do live in the real world and understand the concept of if you can afford the payments then why does it matter, what would you suggest?
In terms of deposit she will be trading her old car in which I think in px she'd get around £700 and then she wants to pay around £200 a month.
any opinions on the cars I mentioned also would be good please, I am trying to steer her towards the fiesta or the DS3 myself.
Cheers.
Wife has a Fiesta 1.4 titanium, got to say very nice little car & she absolutely loves it. Loads of toys in it and good to drive. I like the look of the ds3 but having owned 2 C4 picasso family cars all i can say is one was good, bought a second - rubbish, lots of faults. They seem to be very hit or miss if you get a reliable one or not.
tyranical said:
Pumpkin how much a month you paying etc on that polo?
£275 a month but I added about £1000 worth of options, without the options I think it was £240. I didn't get the £1000 deposit contribution so it'd be even less with that included. I didn't put in any deposit myself either, mine is the 1.4 Match.tyranical said:
She is looking at either new or nearly new and has been considering PCP deals etc.
PCP works best on new cars as there's often support from the manufacturer in terms of deposit contribution and cheaper interest rates.Don't take any notice of the salesman saying the car will be worth loads more than the GFV at then end of the term - it's possible, but unlikely. If you are going to hand the car back at the end then bear in mind the mileage limits and you might be charged, possibly a lot, for any damage to the car (especially with VW). If you pay off the GFV and keep the car then neither of these things matter.
Edited by Deva Link on Sunday 20th May 16:47
PCP is a very expensive way to buy a car as opposed to HP as you tend to take out credit for a large amount (because the car is new) and carry most of that debt for the entire lifecycle of the pcp (hence full interest on a far, far larger amount than would be the case on an HP situation at the same APR).
However, there's often the possibility of a 0% finance deal on PCP on some new cars. Suddenly it makes a lot more sense.
This leaves only one problem: It is never cost effective to pay the balloon payment and keep the car - you'd have been much better getting HP and paying more off each month. It can be cost effective to use the equity you'll have between the value of the car and the balloon payment as a start towards a deposit for a new PCP, (or an HP) but where do you get the rest of your deposit from? You need to budget for that too.
However, there's often the possibility of a 0% finance deal on PCP on some new cars. Suddenly it makes a lot more sense.
This leaves only one problem: It is never cost effective to pay the balloon payment and keep the car - you'd have been much better getting HP and paying more off each month. It can be cost effective to use the equity you'll have between the value of the car and the balloon payment as a start towards a deposit for a new PCP, (or an HP) but where do you get the rest of your deposit from? You need to budget for that too.
My wife used to have a Fiesta Zetec S and then traded it in for a DS3. Both lovely cars and both 100% reliable over the time we owned them. The Fiesta was the better drive and the car I would choose, but my wife loves her DS3 and is her favourite of the two (it also gets lots of admiring glances from the ladies).
fozzymandeus said:
PCP is a very expensive way to buy a car as opposed to HP as you tend to take out credit for a large amount (because the car is new) and carry most of that debt for the entire lifecycle of the pcp (hence full interest on a far, far larger amount than would be the case on an HP situation at the same APR).
However, there's often the possibility of a 0% finance deal on PCP on some new cars. Suddenly it makes a lot more sense.
This leaves only one problem: It is never cost effective to pay the balloon payment and keep the car - you'd have been much better getting HP and paying more off each month. It can be cost effective to use the equity you'll have between the value of the car and the balloon payment as a start towards a deposit for a new PCP, (or an HP) but where do you get the rest of your deposit from? You need to budget for that too.
This man speaks a lot of sense.However, there's often the possibility of a 0% finance deal on PCP on some new cars. Suddenly it makes a lot more sense.
This leaves only one problem: It is never cost effective to pay the balloon payment and keep the car - you'd have been much better getting HP and paying more off each month. It can be cost effective to use the equity you'll have between the value of the car and the balloon payment as a start towards a deposit for a new PCP, (or an HP) but where do you get the rest of your deposit from? You need to budget for that too.
A recent bit of finance for a 1 series worked out at something £400pcm for 3 years on PCP and at the end I could give the car back.
Or, I could pay £500 for 3 years on a bank loan and at the end I would own the car.
(possible badly remembered, but you get the idea)
The PCP (or whatever it was) had a massive APR that was calculated at the start of the loan, whereas the bank loan had a low APR that was recalculated every time I paid off a months payment.
The PCP also had ‘initial transfer fee £300, final payment fee £300, guaranteed buyback valuation fee £200 etc’
There are some good deals around on new cars, but check the details.
You might save £1k in interest payments and then lose more than that in a couple of fees at the end of the PCP deal.
tyranical said:
My mrs. is after a car and fancies something like a fiesta, alfa mito, citroen ds3, vw polo etc.
She is looking at either new or nearly new and has been considering PCP deals etc.
Toyota are doing 0% at the moment (PCP) on alot of their range - IQ, Aygo, Yaris and Auris.She is looking at either new or nearly new and has been considering PCP deals etc.
The new Yaris is a great (girls) car imo, my mrs drives one as a low mile/usage company car.
Snowboy said:
A recent bit of finance for a 1 series worked out at something £400pcm for 3 years on PCP and at the end I could give the car back.
Or, I could pay £500 for 3 years on a bank loan and at the end I would own the car.
(possible badly remembered, but you get the idea)
Well, yes, but the example doesn't really work if you give totally random figure - no way could £400 PCP be related to £500 HP. Unless it was a used car, and PCP doesn't really work for used.Or, I could pay £500 for 3 years on a bank loan and at the end I would own the car.
(possible badly remembered, but you get the idea)
Snowboy said:
The PCP (or whatever it was) had a massive APR that was calculated at the start of the loan, whereas the bank loan had a low APR that was recalculated every time I paid off a months payment.
The PCP also had ‘initial transfer fee £300, final payment fee £300, guaranteed buyback valuation fee £200 etc’
There are some good deals around on new cars, but check the details.
You might save £1k in interest payments and then lose more than that in a couple of fees at the end of the PCP deal.
Be careful there - PCP APR will always look higher due to the final value being outstanding for the whole term. The cost of the fees etc is included in the APR calculation.The PCP also had ‘initial transfer fee £300, final payment fee £300, guaranteed buyback valuation fee £200 etc’
There are some good deals around on new cars, but check the details.
You might save £1k in interest payments and then lose more than that in a couple of fees at the end of the PCP deal.
I find the best thing to do is to forget about the APR (even assuming you can get a straight answer on what the APR is) and add up all the numbers and compare the totals.
Deva Link said:
I find the best thing to do is to forget about the APR (even assuming you can get a straight answer on what the APR is) and add up all the numbers and compare the totals.
I agree. Really its a case of working out how much the monthly payments and deposit will cost you in total, against the cost of buying it outright and selling 3-years later.A good PCP deal will cost you less than buying it and selling over the same period.
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