Put in a higher deposit for PCP?
Discussion
Looking to buy my next car (ideally a 2018ish f80 m3) on pcp and I am tempted to put in around 7 or 8k as a deposit, I can afford it but is it a reasonable amount for a deposit? The car itself is a competition pack in yes marina blue with only 13k on the clock.
I have previously had a lease car a35 amg in which I put down 4k initial rental, I didn't think much of it but I know some people may think it's a bit too much for a lease.
Anyway just want to know if anyone had any advice on if it's a good idea to pay a high amount for a deposit or deal with higher monthly payments?
Let me know your thoughts!
I have previously had a lease car a35 amg in which I put down 4k initial rental, I didn't think much of it but I know some people may think it's a bit too much for a lease.
Anyway just want to know if anyone had any advice on if it's a good idea to pay a high amount for a deposit or deal with higher monthly payments?
Let me know your thoughts!
Standard advice is to put as little as possible down as a PCP deposit.
Can depend on interest rate (of agreement vs what you could get putting the cash to different use) whether it works out cheaper overall to borrow a bit less though.
Sometimes you can get a larger discount with a slightly bigger deposit.
Can depend on interest rate (of agreement vs what you could get putting the cash to different use) whether it works out cheaper overall to borrow a bit less though.
Sometimes you can get a larger discount with a slightly bigger deposit.
ncjones said:
Standard advice is to put as little as possible down as a PCP deposit.
Can depend on interest rate (of agreement vs what you could get putting the cash to different use) whether it works out cheaper overall to borrow a bit less though.
Sometimes you can get a larger discount with a slightly bigger deposit.
This, put the absolute minimum in.Can depend on interest rate (of agreement vs what you could get putting the cash to different use) whether it works out cheaper overall to borrow a bit less though.
Sometimes you can get a larger discount with a slightly bigger deposit.
barryrs said:
Unless you are intending to keep the car at the end of the term of course?
In which case the overall cost would be more important than just the deposit and monthlies.
The balloon payment / guaranteed future minimum value doesnt change whatever the deposit is or monthly payment are, though? In which case the overall cost would be more important than just the deposit and monthlies.
If you have a decent deposit a bank loan makes more sense. Certainly up to £30k, personal loans are available up to £50k but at a higher rate.
PCP on used cars usually comes with a high interest rate.
You can sort of do your own PCP with a loan - extend the term to hit the monthly payment you need. For example if you were looking at a PCP over 3 years you might end up taking a loan over 60-65 months. At 3 years you can sell the car and settle the loan, if you decide to keep it you've already got the finance sorted. You take on the depreciation risk, but GFV's on used PCP's are very conservative.
PCP on used cars usually comes with a high interest rate.
You can sort of do your own PCP with a loan - extend the term to hit the monthly payment you need. For example if you were looking at a PCP over 3 years you might end up taking a loan over 60-65 months. At 3 years you can sell the car and settle the loan, if you decide to keep it you've already got the finance sorted. You take on the depreciation risk, but GFV's on used PCP's are very conservative.
Honestly, unless you absolutely have to or have money to burn, at the moment I think it’s a bad idea to be getting into anything used which is expensive.
Values for everything are artificially inflated at the moment and as that works it’s way out of the market people are going to be taking a beating on depreciation.
That’s why GFVs seem conservative at the moment, the finance companies are pricing in the reduction in value as markets return to normal.
Values for everything are artificially inflated at the moment and as that works it’s way out of the market people are going to be taking a beating on depreciation.
That’s why GFVs seem conservative at the moment, the finance companies are pricing in the reduction in value as markets return to normal.
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