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Purely down to cost. Compare the cost of spending £300 a month to drive a new car with what you can buy for £300 a month on hire purchase.

On HP £300 for 36 months is £10,800 including interest of what 10 - 20%. So your probably looking at a second hand car costing what £9k. What will that buy you in comparison to a shiny new car.

OK so at the end of the term the new car will be handed back, you can rinse and repeat. The second hand car will be three years older, will have higher maintenance costs, and will have depreciated as well. 

 

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32 minutes ago, sleepwello'nights said:

Purely down to cost. Compare the cost of spending £300 a month to drive a new car with what you can buy for £300 a month on hire purchase.

On HP £300 for 36 months is £10,800 including interest of what 10 - 20%. So your probably looking at a second hand car costing what £9k. What will that buy you in comparison to a shiny new car.

OK so at the end of the term the new car will be handed back, you can rinse and repeat. The second hand car will be three years older, will have higher maintenance costs, and will have depreciated as well. 

 

Good point so I could flog my car for cash and basically hire one .this would never cross my mind normally .but I’m not living in normal times well not for me .

34 minutes ago, dgul said:

If you don't spunk all that money on a new car people will think you're poor.

I’m impoverished I’m on social 

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45 minutes ago, sleepwello'nights said:

Purely down to cost. Compare the cost of spending £300 a month to drive a new car with what you can buy for £300 a month on hire purchase.

Yes, under HP you are paying the full price of the car but under PCP you are only paying the full price less the residual value.

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4 minutes ago, dgul said:

Console yourself with the fact that truly wealthy folk drive around in battered Volvos.

Seen a few I went to get permission off a guy that has about 150,000 acres  he drove a fucked up volvo and his hobby was driving the combined harvester apparently very badly so said one of the game keepers yep that’s right he had a few 

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An American ranch owner was on holiday in the UK. One night he went to a pub in Cornwall and was chatting with the locals. He started asking about local farming and boasted about the size of his ranch in Texas

"You know," said the Texan, "back home I'd get in my car before sun up and I could drive all day, and when the sun set,  I'd only be halfway across my land!"

"Oh, arrr," said the Cornish farmer, "I used to have a car like that."

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I always think if you must have a new car, then PCP is a better way of doing it versus cash. The monthly costs are roughly the same as the depreciation anyway, but with the added benefit of not tying up loads of cash.

The thing that pisses me off is that a lot of them still charge 6.9% APR when interest rates are at record lows. For that reason I only ever really opt for 0%- 2.9% APR. Might not sound much but saves £80 quid a month odd.

You could look into leasing which is similar.

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10 hours ago, Panther said:

Yes, under HP you are paying the full price of the car but under PCP you are only paying the full price less the residual value.

This isn't strictly true, under PCP you are still paying the full price for the car according to the paperwork. And if the car's quoted value is £20k then you'll have a £20k debt registered against you.

It's just that 99% of people terminate or switch to a newer deal and never actually pay it off. If interest rates go up, then there's going to be a problem.

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