Why WOULDN'T you buy on PCP?
Discussion
It's a genuine question from someone who has never done it.. I've always paid for my cars in cash or HP with a large deposit.
As far as I can see the reasons for it are:
A) You get to keep large sums of capital in the bank and not tied up in a hard to shift asset
B) Plenty of low APR offers out there with loads of free stuff thrown in if you take the finance option
C) No hassle of selling the car privately when you're finished with it
D) You get a new car that comes with a warranty, no risk of large service bills
So why wouldn't you? There is a large % of PH which is against it but I don't understand why??
As far as I can see the reasons for it are:
A) You get to keep large sums of capital in the bank and not tied up in a hard to shift asset
B) Plenty of low APR offers out there with loads of free stuff thrown in if you take the finance option
C) No hassle of selling the car privately when you're finished with it
D) You get a new car that comes with a warranty, no risk of large service bills
So why wouldn't you? There is a large % of PH which is against it but I don't understand why??
I know what I can afford now, I don't want 35 payments hanging over the future. I don't have a desire for new shiny shiny every three years. The cars I would want are rarely available at sensible rates or shorter than three year contracts.
Whilst I could lease/PCP a new E class for approx £13k over three years, I'd prefer to stick low 20ks into a one or two year old, current model. Over the short term, probably not much difference in cost, however over 6 years I'm quids in, plus I can change at will rather than trying to get out of a finance agreement should circumstances change.
Also don't have to fuss over any damage, excess miles, etc..
Probably not much in it if you really want or need to change within 5 years, or just love a main dealer. I use good indies and wouldn't touch a stealer for anything beyond absolute basics, last three cars I've had for 11, 5 and 7 years so not really a leasor's target market.
Whilst I could lease/PCP a new E class for approx £13k over three years, I'd prefer to stick low 20ks into a one or two year old, current model. Over the short term, probably not much difference in cost, however over 6 years I'm quids in, plus I can change at will rather than trying to get out of a finance agreement should circumstances change.
Also don't have to fuss over any damage, excess miles, etc..
Probably not much in it if you really want or need to change within 5 years, or just love a main dealer. I use good indies and wouldn't touch a stealer for anything beyond absolute basics, last three cars I've had for 11, 5 and 7 years so not really a leasor's target market.
I’ve never been in debt and don’t have a regularly paid job so just assumed I won’t qualify for the best rates. Credit rating etc?
It does look attractive though. Would probably try and negotiate some large deposit, £1 a month deal if the other perks looked attractive enough.
It does look attractive though. Would probably try and negotiate some large deposit, £1 a month deal if the other perks looked attractive enough.
Edited by Oldcars61 on Saturday 18th August 12:40
928 said:
I know what I can afford now, I don't want 35 payments hanging over the future.
Same for me - once it's bought I can forget about it. It also means there no time pressure to change it. Having said that, last car we took the PCP to get the deposit contribution, but then Withdrew after delivery. Previous one had a 0% 2yr deal so I let that run, then paid the final payment.
Why wouldn't I pcp a car!?
Hmmmm, Value for money and freedom I'd say.
Relatively speaking I can choose a car I want suitable to me and keep it for 6 or 7 years instead of just 3 years. It'll cost me a hell of a lot less over that extended term because I know I don't need a new car every 36 months or whenever the dealer decided to drop me a call with their newest best deal ever.
The worst bit about buying on pcp if you intend to purchase the car after the term which seldom happens is you pay interest in the full amount borrowed from day 1. Then the amount left at the end balloon payment then has to be refinanced and interest paid on it again. So ok you get a low monthly payment but you are paying double interest for the pleasure.
I'm not tied to a contract. If I need to free up some money I just sell the car. Because I've chose well using part or all equity (not one payment) I'll never be in negative with it. With a pcp you'll likely always be in negative with it until very close to the end of term.
I want to be in control, not the dealers/financiers.
Hmmmm, Value for money and freedom I'd say.
Relatively speaking I can choose a car I want suitable to me and keep it for 6 or 7 years instead of just 3 years. It'll cost me a hell of a lot less over that extended term because I know I don't need a new car every 36 months or whenever the dealer decided to drop me a call with their newest best deal ever.
The worst bit about buying on pcp if you intend to purchase the car after the term which seldom happens is you pay interest in the full amount borrowed from day 1. Then the amount left at the end balloon payment then has to be refinanced and interest paid on it again. So ok you get a low monthly payment but you are paying double interest for the pleasure.
I'm not tied to a contract. If I need to free up some money I just sell the car. Because I've chose well using part or all equity (not one payment) I'll never be in negative with it. With a pcp you'll likely always be in negative with it until very close to the end of term.
I want to be in control, not the dealers/financiers.
Edited by Edible Roadkill on Saturday 18th August 14:44
928 said:
I know what I can afford now, I don't want 35 payments hanging over the future. I don't have a desire for new shiny shiny every three years. The cars I would want are rarely available at sensible rates or shorter than three year contracts.
Whilst I could lease/PCP a new E class for approx £13k over three years, I'd prefer to stick low 20ks into a one or two year old, current model. Over the short term, probably not much difference in cost, however over 6 years I'm quids in, plus I can change at will rather than trying to get out of a finance agreement should circumstances change.
Also don't have to fuss over any damage, excess miles, etc..
Probably not much in it if you really want or need to change within 5 years, or just love a main dealer. I use good indies and wouldn't touch a stealer for anything beyond absolute basics, last three cars I've had for 11, 5 and 7 years so not really a leasor's target market.
The thread title said ‘buy on PCP’ not ‘hire on PCP and repeat every 3-5 years’Whilst I could lease/PCP a new E class for approx £13k over three years, I'd prefer to stick low 20ks into a one or two year old, current model. Over the short term, probably not much difference in cost, however over 6 years I'm quids in, plus I can change at will rather than trying to get out of a finance agreement should circumstances change.
Also don't have to fuss over any damage, excess miles, etc..
Probably not much in it if you really want or need to change within 5 years, or just love a main dealer. I use good indies and wouldn't touch a stealer for anything beyond absolute basics, last three cars I've had for 11, 5 and 7 years so not really a leasor's target market.
Few reasons for me personally.
1. The novelty of having a new (to me) motor wears off on me around 3-4 months and being tied down to something for 2-3 years would annoy the hell out of me.
2. Servicing all needs to be taken to a main stealer or approved, stories of dealers demanding to replace brake pads when half worn, or air cons needing a re gas etc.... just some of the many blags used by dealers. By not getting this work done, i would be concerned how it would effect the warranty and my PCP contract.
3. I would also be concerned once the vehicle has been returned what other hidden costs would they add, such as stone chips, scratches, curbed alloys etc.
4. Job security, being tied down to a debt over a bloody car for 2-3 years if out of work for whatever reason. I presume the finance company will still expect the agreement to be honoured if made redundant and if you cant keep up with repayments wreak havoc with your credit file. Then there is missed payment fees, repossession fees, CCJS etc.
I cannot justify the rewards of PCP at all. If i feel a massive urge to drive a brand new say Mercedes S class then i will hire one for a weekend not for 3 years.
1. The novelty of having a new (to me) motor wears off on me around 3-4 months and being tied down to something for 2-3 years would annoy the hell out of me.
2. Servicing all needs to be taken to a main stealer or approved, stories of dealers demanding to replace brake pads when half worn, or air cons needing a re gas etc.... just some of the many blags used by dealers. By not getting this work done, i would be concerned how it would effect the warranty and my PCP contract.
3. I would also be concerned once the vehicle has been returned what other hidden costs would they add, such as stone chips, scratches, curbed alloys etc.
4. Job security, being tied down to a debt over a bloody car for 2-3 years if out of work for whatever reason. I presume the finance company will still expect the agreement to be honoured if made redundant and if you cant keep up with repayments wreak havoc with your credit file. Then there is missed payment fees, repossession fees, CCJS etc.
I cannot justify the rewards of PCP at all. If i feel a massive urge to drive a brand new say Mercedes S class then i will hire one for a weekend not for 3 years.
1. Because I like owning my cars.
2. You also get more choice when shopping with cash if you don’t mind something a few years old and you can choose who services it.
3.The thought of renting somebody else’s 4 wheeled washing machine and having nothing to show for it at the end of 3 years is pretty depressing.
I would add I’ve just paid £1500 for a major service and a few repairs to my 15 year old Saab. About the same as the value of the car which may not sound logical but I live in hope it won’t take me to the cleaners this time next year. It probably will!
2. You also get more choice when shopping with cash if you don’t mind something a few years old and you can choose who services it.
3.The thought of renting somebody else’s 4 wheeled washing machine and having nothing to show for it at the end of 3 years is pretty depressing.
I would add I’ve just paid £1500 for a major service and a few repairs to my 15 year old Saab. About the same as the value of the car which may not sound logical but I live in hope it won’t take me to the cleaners this time next year. It probably will!
Edited by anonymous-user on Saturday 18th August 15:07
I'm an advocate of using PCP but I can see reasons why it doesn't suit everyone:
- If I was only going to keep a car for a short time
- If I planned to keep the car for a very long time
- If I couldn't get credit
- If the car that I wanted to buy was quite old
- If I was doing a very high mileage then I might be better doing 5 years HP and VT'ing it.
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