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Battenberg

PCP for New Cars

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I'm looking for input. On TOS PCP was only ever mentioned in a negative manner. 

I've spent 5 years paying off a car, finished in October then used the amount we were paying to go towards the mortgage. I was looking forward to at least a year of no finance payments before having to consider another car but the car has failed catastrophically and is practically worthless now. 

Having spent a miserable 2 days looking at cars I am rather swayed by the idea of having something newer on PCP. 

Thoughts on a postcard please. 

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Example I saw the other day on the telly, read the small print.

Basically you can drive this car for 199/month PCH over 4 years (4 years is unusual) with 1999 up front.

So thats 1999+(48x199) = 11551 then you hand it back in perfect condition having done less than 6000 miles per year to avoid extra charges.

At the end of the 4 years you have no skin in the game.

Rinse & Repeat

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Obviously look around but I hear from my uncle who used to be a small time motor trader on the side that the PCP deals are so good that he intends getting one next time.

I think they actually represent a saving for people who buy new cars and chop them in at the three year point; two people I knew that did this both went PCP with their last two cars.

Obviously it's going to be more expensive than bangernomics or buy and keep for a decade like me or @One percent but if you want a newish car and like changing them every three years then PCP can be the cheapest route. 

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There is nothing wrong with PCP at all so long as the monthly repayment is as inconsequential as say a mobile phone contract. Treat it as a service not an asset. 

My recent (66 plate) PCP costs me £118 a month for 42 months followed by a balloon of ~£3,500. I am contracted to do 5,000 miles per annum but on target to break 18,000. If I were to return the car the excess mileage penalty would be  £3,000 alone, as it stands I'm not in the PCP trap as I'll be able to pay the balloon if only to sell immediately after. My neighbour had a C class on PCP and come renewal found that he'd have a £5,000 mileage excess penalty to pay but dealership did him a deal and sold him an old shape 65 plate E class for the same price we paid for our new 'new' shape *66 plate E class.  He was no position to negotiate and they took him for all they could.

My philosophy after having moved away from leasing (3% down and 1% of the cars RRP monthly) to PCP is purchase the vehicle suitable for 90% of tasks (mundanely for me school runs, shopping and childrens party merry go round) and rent a bigger car where required.

*that's mrsLTS and costs £325 a month using part of her work car allowance of £730 gross.

Edited by longtomsilver

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Nothing wrong with it, if you go into having done your research.  Do your sums and make sure you can afford it.  Consider how your circumstances might change, and make sure the deal isn't too prohibitive.

If you're not fussed about the car you want there's are usually good deals on different cars at different times according to manufacturer over supply.

There's a decent thread on Pistonheads that's regularly updated.  

Watch out for a few scam companies that offer very low deals in order to scam deposits out of people.  They're few and far between and try and operate in a different way that reputable places, but look out for them.

 

 

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56 minutes ago, Frank Hovis said:

Obviously look around but I hear from my uncle who used to be a small time motor trader on the side that the PCP deals are so good that he intends getting one next time.

I think they actually represent a saving for people who buy new cars and chop them in at the three year point; two people I knew that did this both went PCP with their last two cars.

Obviously it's going to be more expensive than bangernomics or buy and keep for a decade like me or @One percent but if you want a newish car and like changing them every three years then PCP can be the cheapest route. 

My car is starting to cost unfortunately. It's not that old, 58 plate and 70 k miles. 

In the last few months, water pump, air con. Now the brakes. Nowt wrong with them but it has one of those warning systems that squarks every time I start the thing.

Eyeing up some 12 month old ones.  Cash only though.  

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25 minutes ago, MrPin said:

Well cars need to be maintained, even PCP ones.

I have had it incredibly cheap with my car.  Came with the remainder of a five year free service plan.  Topped that up for a furthe three years for somewhere around the 300 mark, so essentially seven years free motoring. 

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4 minutes ago, One percent said:

I have had it incredibly cheap with my car.  Came with the remainder of a five year free service plan.  Topped that up for a furthe three years for somewhere around the 300 mark, so essentially seven years free motoring. 

It's a bit pot luck. Current one is running well, and hasn't cost much at all so is a keeper until it falls apart. Last one was fine for five years, until it blew a cylinder head, and I couldn't find a replacement Cadillac engine at the breakers.

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I think the problem with PCP is that it seduces you into spending (much) more money:

  • First you're taking out a loan at £200 a month to buy a basic newish car.
  • Next you realise that you can buy exactly the same car at £100 a month...  Now, there's a balloon payment at the end, but I'll save up for that as I go along.
  • You can get it new for £150 a month!  Fantastic.  Balloon payment is a bit more -- but smell the newness!!  (that it is 60 month term not 36 month is irrelevant).
  • But you were happy to pay £200 a month, so why not spoil yourself. You deserve it.  You can worry about the balloon payment later.
  • You don't pay the balloon payment, that's just for mugs with old cars.  Just pay the £200 a month and you've got a new car all the time.
  • You know, you can get the super GTi fancy marque car at the same £200 a month.  Okay, the balloon payment is £20k not £5k, but you don't pay that anyway.
  • £250 a month is only a little more than £200 a month, and you get a really fancy car that the neighbours will be so jealous of.

See, you've gone from £200 a month, own the car after 3 years, to £250 a month and you'll be paying it forever as you'll never be able to afford the balloon payment, and you'll die before facing up to the neighbours driving a cheap car -- they'll think you've taken up drugs or become unemployed or something.  I think that is the problem with PCP.

Edited by dgul

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9 minutes ago, dgul said:

I think the problem with PCP is that it seduces you into spending (much) more money:

  • First you're taking out a loan at £200 a month to buy a basic newish car.
  • Next you realise that you can buy exactly the same car at £100 a month...  Now, there's a balloon payment at the end, but I'll save up for that as I go along.
  • You can get it new for £150 a month!  Fantastic.  Balloon payment is a bit more -- but smell the newness!!  (that it is 60 month term not 36 month is irrelevant).
  • But you were happy to pay £200 a month, so why not spoil yourself. You deserve it.  You can worry about the balloon payment later.
  • You don't pay the balloon payment, that's just for mugs with old cars.  Just pay the £200 a month and you've got a new car all the time.
  • You know, you can get the super GTi fancy marque car at the same £200 a month.  Okay, the balloon payment is £20k not £5k, but you don't pay that anyway.
  • £250 a month is only a little more than £200 a month, and you get a really fancy car that the neighbours will be so jealous of.

See, you've gone from £200 a month, own the car after 3 years, to £250 a month and you'll be paying it forever as you'll never be able to afford the balloon payment, and you'll die before facing up to the neighbours driving a cheap car -- they'll think you've taken up drugs or become unemployed or something.  I think that is the problem with PCP.

Is this about Angel Dust?

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5 minutes ago, SNACR said:

Is this about Angel Dust?

It is kind of similar, but with that you don't get to roll-over the balloon payment on the loan -- if you don't pay up at the end of the term the vendor breaks your kneecaps and takes your daughter into prostitution.

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I thought the most common way to buy a car these days was when you mortgage is up for renewal just bang on another 40k for a nice new range rover, as your equity will have rocketed, after all the payments on the new mortgage will be less than you were paying before.

Win win win, Thank the genius Gimp Carney.

Edited by Green Devil

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I just do a straight lease. Two years, no  final payment. Start again. Allows me 20,000 miles each year. That's slightly tight for me, but I'll be underneath that. If the monthly payments are not an issue, it's hassle free motoring. I've done my time coaxing cars through tests etc etc. Life's too short. There are obviously cheaper options, and I could save money, but I already save too much. 

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16 minutes ago, dgul said:

I think the problem with PCP is that it seduces you into spending (much) more money:

That's basically the snag. The thing to realise is that a car costs. Some of the threads on Piston Heads are on the lines of "I bought a car for £x ran it for several months, sold/p.ex'd it for £x-y and I lost £xxx's." Well you didn't actually lose anything, that was the cost for the use of the car for your period of ownership.

If you know your budget and can afford to buy a car you want then why not spend it. I've had a new car periodically since 1989. Most I've not kept for more than three years, they've still been running reliably and there was no reason why I couldn't have run them for many more years. But hey I could afford to buy another car that seduced me so I did.  Looking at the prices advertised on carandclassic.co.uk I wish I'd kept most of cars I've owned since I started driving: Lotus Cortina, Escort Mexico, Alfa 1600 GTV, Cortina 1600E, even the £15 Ford Anglia and the banger Minis would have been worth keeping if I'd had somewhere to store them. Cunning Plan's Alfa looks appealing.

My current car is a few months old, its the most expensive car I've ever owned and I've driven fewer miles since I bought it than any other car I've ever had.  It doesn't make any sense on a cost per mile basis, but I enjoy owning it.

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1 hour ago, dgul said:

and you'll die before facing up to the neighbours driving a cheap car -- they'll think you've taken up drugs or become unemployed or something. 

In a nutshell. You're trapped.

The moment you trade down is the peak of your life......! You'll lose all those Facebook friends, those twitter followers and Instagrams too.

I would make a bet on cosmetic surgery if I could too  (they must be booming now, like Tattoos, Nails, Online fashion) - image is everything.

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16 minutes ago, One percent said:

My problem is that whenever I buy a new (to me) car, I drive it around thinking, this isn't as nice as the car I've just got rid of. xD

That's because the old car is your car.

And every day that you drive it, it becomes more your car.  And you want to keep it.

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