PCH Car Purchase

[Moley RUFC]

So I’m the proud owner of an Alfa 4C Spider on a PCH deal for 2 years.

Things must have changed recently I guess as when I collected the car yesterday I was told that toward the end of the deal I’d be contacted and offered a chance to refinance the car or buy it. I wasn’t aware you could purchase a PCH car in the name in which the deal was done originally ..

That aside it’s now got me thinking about the possibility of doing this against another PCH deal in the future.

I don’t have the capital to pay for the car outright (£40k ish I guess) but certainly have the equity in my current mortgage ( a £40k car would be around 15% of the value v owed amount) .

Is this a sensible way to go given we are currently overpaying our mortgage each month or would a traditional loan/ Alfa Romeo refinance make more sense.

As I say this is a bit of crystal ball gazing at this stage but would appreciate the PH thoughts.

[coljoh148]

I'd could never borrow against my home for a car but I know people who have.

I guess the arguments relevant for the lower rates etc but it wouldn't feel right to me. I'd rather just save up if I wanted it that much.

[rfoster]

That does sound a bit odd - contract hire specifically doesn't allow the end user to purchase the vehicle at the end of the term (though it would be quite easy for a third party to purchase on your behalf I guess!)

[2fast748]

rfoster said:

That does sound a bit odd - contract hire specifically doesn't allow the end user to purchase the vehicle at the end of the term (though it would be quite easy for a third party to purchase on your behalf I guess!)

It's common for the lease company to offer you the car towards the end of the lease (VWFS did it with my Skoda last year) but it does make a mockery of the "you will not own the car" statements you sign up for at the beginning of the lease.

I suspect it is because if you do buy the car it is just considered a normal sale as you having the lease has no bearing on the price or ties you into buying it at a certain price (like a PCP).

[Phateuk]

2fast748 said:

rfoster said:

That does sound a bit odd - contract hire specifically doesn't allow the end user to purchase the vehicle at the end of the term (though it would be quite easy for a third party to purchase on your behalf I guess!)

It's common for the lease company to offer you the car towards the end of the lease (VWFS did it with my Skoda last year) but it does make a mockery of the "you will not own the car" statements you sign up for at the beginning of the lease.

I suspect it is because if you do buy the car it is just considered a normal sale as you having the lease has no bearing on the price or ties you into buying it at a certain price (like a PCP).

My last lease car was offered to me to purchase, or extend for a further 12 months (at a higher rate). It seems fairly common from what I've seen.

[Moley RUFC]

coljoh148 said:

I'd could never borrow against my home for a car but I know people who have.

I guess the arguments relevant for the lower rates etc but it wouldn't feel right to me. I'd rather just save up if I wanted it that much.

I can understand that but to raise around £40k in 2 years would be a challenge. Whereas the ability to pay for the car combined in a current deal is achievable given I overpay my mortgage by £1000 a month?

Has anyone gone down this route and can offer insight?

[JayBM]

Moley RUFC said:

I can understand that but to raise around £40k in 2 years would be a challenge. Whereas the ability to pay for the car combined in a current deal is achievable given I overpay my mortgage by £1000 a month?

Has anyone gone down this route and can offer insight?

Surely the purchase price won't be 40k in 2yrs as it'll have had those years to depreciate? So you could put aside some of the £1000/mo overpayment and be able to purchase the car without having to finance it through a remortgage?

[Deesee]

4c is say 55-60k.

PCH, if you want it for 2 years, and hand it back this is for you.
PCP, if you want it with an option to buy/hand back at the end of the agreement with some equity (hopefully), this is for you, (theres also a 6k finance discount at present too).

Or buy it, the PCH must be circa £700 pcm, + the 1k pcm your paying in mortgage overpayments, a 36 month HP agreement won't be far off that, then its yours to do with as you please.

Nice wheels, a neighbour has one in red, real head turner. Good Luck

[PHuzzy]

If it's the same deal as last year it won't be near £700pcm, those deals were approx £400pcm averaged over the 2 years.

It was about £9k or so, if you can get the car at the end for £35-40k it's an amazing deal over outright purchase/PCP.

[Deesee]

PHuzzy said:

If it's the same deal as last year it won't be near £700pcm, those deals were approx £400pcm averaged over the 2 years.

It was about £9k or so, if you can get the car at the end for £35-40k it's an amazing deal over outright purchase/PCP.

My £700 was a rough estimate based on the estimated value/depreciation as listed above, but £400 a month?

[PHuzzy]

Yep, depending on mileage, I think they started at £290 per month on a 9+23 deal.

I'll have to have a look at my quote, unfortunately the missus vetoed it in favour of getting something more sensible.

[Deesee]

PHuzzy said:

Yep, depending on mileage, I think they started at £290 per month on a 9+23 deal.

I'll have to have a look at my quote, unfortunately the missus vetoed it in favour of getting something more sensible.

Jesus, thats cheap, Id be tempted at on that sort of deal, the lowest I've seen on PCH this morning (now looking but not too hard) is 7+35 at 1k pcm, that would end in divorce...