PCP, why are people so negative about it?
Discussion
Ive just got myself a M4 Competition Convertible, love it, and can only afford it via a PCP.
Some people have said to me,
"The only way I could afford one of them is on a PCP!"
In other words, they cant afford to buy one (Same as me) But look at PCP as a real negative option.
It seems to be the general feeling amongst people when chatting about getting a new car. It also seems that people are embarrassed to admit that they got their car on a PCP.
I know its not yours, and its leasing, but I dont see what is so wrong about it.
Anyone else noticed this?
Some people have said to me,
"The only way I could afford one of them is on a PCP!"
In other words, they cant afford to buy one (Same as me) But look at PCP as a real negative option.
It seems to be the general feeling amongst people when chatting about getting a new car. It also seems that people are embarrassed to admit that they got their car on a PCP.
I know its not yours, and its leasing, but I dont see what is so wrong about it.
Anyone else noticed this?
Funk said:
Do whatever works for you and makes you happy. Life's short.
Exactly this. It's snobbery. In the past you could only buy cars with cash or HP. Leasing was for businesses. As such if someone bought a Merc it was likely that they were wealthy enough to do so.
Fast forward to today and PCH/PCP/HP/Leasing/Subscription is available to everyone who can afford to pay the £x99 cost. So you get 18 year olds in A-Class Mercs etc. Moving forward, most cars(85%) are bought on some form of finance. This enrages those on PH as it means that someone on a low wage can have the same car as them.
I bought my first ever car on PCP in Jan 2020 as it was the cheapest way to long term ownership with the finance contribution and servicing plan. I couldn't give a monkeys who owns or drives what. That said, it irks me a little when I see a nice lease car (from the number plate advertising) a year later on LingLongDitchfinders.
I’ve always seen PCP, Leasing and HP as a totally unnecessary trap. Money is hard enough to earn, you pay loads of tax and then pay interest on a depreciating asset.
Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
Rob 131 Sport said:
I’ve always seen PCP, Leasing and HP as a totally unnecessary trap. Money is hard enough to earn, you pay loads of tax and then pay interest on a depreciating asset.
Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
But PCP is different from leasing.Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
You have the option to buy the car at the end should you wish. The money is not wasted, the only thing that is is any interest.
Because old "car people" see a bunch of people they consider to be "undesirables" getting fast cars whilst on what they consider to be a modest job (i.e I can't afford it so they MUST not be able to and living out of their means).
And the "built not bought" mentality, generally referring to the myth that you can't modify a car the slightest bit when on finance.
And the "built not bought" mentality, generally referring to the myth that you can't modify a car the slightest bit when on finance.
lb3nson said:
Rob 131 Sport said:
I’ve always seen PCP, Leasing and HP as a totally unnecessary trap. Money is hard enough to earn, you pay loads of tax and then pay interest on a depreciating asset.
Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
But PCP is different from leasing.Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
You have the option to buy the car at the end should you wish. The money is not wasted, the only thing that is is any interest.
I've a mix of outright owned cars, and 1 on PCP. Outright owned cars are a Pickup 67 Plate (side business,) my daughters Fiat 500 (15 Plate), and my wife Audi A1 (17 Plate) None of these were brand new cars when purchased.
My main car/family car is a X3 M40i on a 19 Plate. While I probably could have afforded to buy the car outright on finance - it's a depreciating asset. So I'd rather go down the route of fixed monthlies, with servicing covered. Than own something worse significantly less as soon as it rolled out of the the showroom.
If you take a step back - and look at cost of a new car (especially with Electric cars) why would you pay that amount, when most people are happy to effectively lease the car, which after 3-4 years they can hand back, and get the next latest with hopefully improved battery technology. T
My pickup, needs to be able to pull a 3.5t trailer - so doubt I'll be swapping that anytime soon for an electric replacement. My daughters car is ideal for her while she's @ university. My wife car, while I'd like to change it - she's not in the slightest interested, as long as she can get in it and go without having to unplug it I'd imagine.
Going forward - I'd suspect outright ownership of a car will decline significantly as more people migrate to the electric platform for the above reasons.
Most car companies these days are finance companies that happen to produce cars ...
As with any form of finance - as long as the correct due diligence/checks are in place- as sometimes people are their own worst enemy / make stupid decisions !!
My main car/family car is a X3 M40i on a 19 Plate. While I probably could have afforded to buy the car outright on finance - it's a depreciating asset. So I'd rather go down the route of fixed monthlies, with servicing covered. Than own something worse significantly less as soon as it rolled out of the the showroom.
If you take a step back - and look at cost of a new car (especially with Electric cars) why would you pay that amount, when most people are happy to effectively lease the car, which after 3-4 years they can hand back, and get the next latest with hopefully improved battery technology. T
My pickup, needs to be able to pull a 3.5t trailer - so doubt I'll be swapping that anytime soon for an electric replacement. My daughters car is ideal for her while she's @ university. My wife car, while I'd like to change it - she's not in the slightest interested, as long as she can get in it and go without having to unplug it I'd imagine.
Going forward - I'd suspect outright ownership of a car will decline significantly as more people migrate to the electric platform for the above reasons.
Most car companies these days are finance companies that happen to produce cars ...
As with any form of finance - as long as the correct due diligence/checks are in place- as sometimes people are their own worst enemy / make stupid decisions !!
rampageturke said:
Because old "car people" see a bunch of people they consider to be "undesirables" getting fast cars whilst on what they consider to be a modest job (i.e I can't afford it so they MUST not be able to and living out of their means).
And the "built not bought" mentality, generally referring to the myth that you can't modify a car the slightest bit when on finance.
I’m 49. Hardly old. All of this finance / PCP / Leasing thing has been around for decades. Nothing new, it’s just that I and many young are financially savvy. And the "built not bought" mentality, generally referring to the myth that you can't modify a car the slightest bit when on finance.
I had mates that bought cars on finance in 1991 as 18 year olds. Guess what, they still have their cars on finance.
Rob 131 Sport said:
I’ve always seen PCP, Leasing and HP as a totally unnecessary trap. Money is hard enough to earn, you pay loads of tax and then pay interest on a depreciating asset.
Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
PCP and HP aren't leasing.Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
With HP, you clear the loan and own the car, so your last sentence isn't correct.
PCP gives you the option to own the car, just more long term. It's basically a loan with an exit clause, wrapped up in different paper.
Leasing can be extremely financially savvy, if you can get the right deal. Ask those people who picked up BMW 8 series' on ridiculous rates a couple of years back (there's a thread)
Ultimately, like all means of financing a car, what works for one may not work for another. There is no one 'correct' way of doing it.
Muzzer79 said:
Rob 131 Sport said:
I’ve always seen PCP, Leasing and HP as a totally unnecessary trap. Money is hard enough to earn, you pay loads of tax and then pay interest on a depreciating asset.
Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
PCP and HP aren't leasing.Save up, buy the car you want (often discounted) and then put money aside / invest each month for its replacement. Over a lifetime you’ll save tens of thousands of pounds. You also get the joy of ‘Actual Ownership’. If I were to lease my BMW 530d M Sport it would cost circa £700 per month. What a total waste of money on something I’d never own.
Buy what you can afford and you’ll be happy.
With HP, you clear the loan and own the car, so your last sentence isn't correct.
PCP gives you the option to own the car, just more long term. It's basically a loan with an exit clause, wrapped up in different paper.
Leasing can be extremely financially savvy, if you can get the right deal. Ask those people who picked up BMW 8 series' on ridiculous rates a couple of years back (there's a thread)
Ultimately, like all means of financing a car, what works for one may not work for another. There is no one 'correct' way of doing it.
Rob 131 Sport said:
I’ve always seen PCP, Leasing and HP as a totally unnecessary trap. Money is hard enough to earn, you pay loads of tax and then pay interest on a depreciating asset.
I PCP my M4 I could have purchased it outright but I can use the capital elsewhere where it's possible to make more than the 2.9% that I'm being charged , buying outright is not always the most cost effective way to purchase a car .At any point should I change my mind I can settle the finance My UP I bought for cash as the PCP would have been 5.9% and thats harder to make up so there is no hard and fast rule or blanket solution to what's the best way , you need to look at how much it's costing in total and are you happy with that price.
Two main reasons for negativity that I can see.
1) It's more expensive, combined with the fact that many seem to think it's cheaper.
2) The way it's sold. We've had car salesmen (well, finance salesmen to be more accurate) on here insisting that the lower deposit the better because that's what they were told on their training course. Not realising that it's better for the finance company but worse for the customer. We even had one claiming there was no interest charged on the final payment.
Nothing wrong with it as an option, it's just that those of us who buy cars with cash are fed up with being told we are financially illiterate or that PCP would somehow protect us from depreciation.
1) It's more expensive, combined with the fact that many seem to think it's cheaper.
2) The way it's sold. We've had car salesmen (well, finance salesmen to be more accurate) on here insisting that the lower deposit the better because that's what they were told on their training course. Not realising that it's better for the finance company but worse for the customer. We even had one claiming there was no interest charged on the final payment.
Nothing wrong with it as an option, it's just that those of us who buy cars with cash are fed up with being told we are financially illiterate or that PCP would somehow protect us from depreciation.
When people talk about cars as “depreciating assets” , indicating it’s better the lease/finance than buy outright can someone explain the logic ?
If a £40k car is worth £20k after 4 years let’s say
Option 1: Buy outright
Cost £20k in depreciation,
Option 2: Finance / Lease
Cost £20k in lease payments / finance payments
+Interest probably ?
Interested as I’m in the market to splurge soon and I’ve been considering new for the first time. I’ve never had finance.
I guess the suggestion is the £40k (after deposits, £35k) should be invested and the gains will outweigh the finance interest somehow .
If a £40k car is worth £20k after 4 years let’s say
Option 1: Buy outright
Cost £20k in depreciation,
Option 2: Finance / Lease
Cost £20k in lease payments / finance payments
+Interest probably ?
Interested as I’m in the market to splurge soon and I’ve been considering new for the first time. I’ve never had finance.
I guess the suggestion is the £40k (after deposits, £35k) should be invested and the gains will outweigh the finance interest somehow .
Edited by joropug on Friday 10th June 09:33
joropug said:
When people talk about cars as “depreciating assets” , indicating it’s better the lease/finance than buy outright can someone explain the logic ?
If a £40k car is worth £20k after 4 years let’s say
Option 1: Buy outright
Cost £20k in depreciation,
Option 2: Finance / Lease
Cost £20k in lease payments / finance payments
+Interest probably ?
Interested as I’m in the market to splurge soon and I’ve been considering new for the first time. I’ve never had finance.
With finance/lease you know what the depreciation will be. If you buy outright or with HP you are at the mercy/unpredictability of the used car market when you come to dispose of it.If a £40k car is worth £20k after 4 years let’s say
Option 1: Buy outright
Cost £20k in depreciation,
Option 2: Finance / Lease
Cost £20k in lease payments / finance payments
+Interest probably ?
Interested as I’m in the market to splurge soon and I’ve been considering new for the first time. I’ve never had finance.
If you know that you only want the car for a specific period and not want to keep it (although with PCP it can be purchased at the end of the agreement) it makes sense to PCP/lease provided you can afford the monthlies and the arithmetic adds up.
I was once told by a complete knob in an old Nissan Qasqai that my car is on PCP and I can't afford it (BMW 240i). The irony of it was that I do actually own my car and it isn't on PCP.
I don't care less how people choose to buy or finance their cars but it did amuse me, I couldn't be bothered to stop and explain my finances to him though
I don't care less how people choose to buy or finance their cars but it did amuse me, I couldn't be bothered to stop and explain my finances to him though
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