PCP, HP or owning your car outright

Adamki83

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I couldnt find an appropriate section for this thread!
What are peoples honest thoughts of finance?
With the growing pressure of getting a new car and having whats called "trouble free" motoring.
Ive always owned my cars outright (ive had 4) obviously not expensive but im still looking into the option of PCP!
Just wanted to get peoples opinions and thoughts!
 

A.J.

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It's only my own personal opinion but I would rather have a cheaper car that I could afford. My current MB is a 2012 but had only done 20,000 miles when I bought it nearly three years ago. :)

It has now done 31,000 miles and has been faultless apart from a speed sensor that was replaced at a cost of around £130. That is all it has cost me apart from the usual running costs. I am a bit too long in the tooth to get tied up in financial agreements so cash it is :)
 

malcolm E53 AMG

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Always an interesting topic!

My son had company cars for 5 years left that job and decided to buy privately as opposed to PCP for his next job, he bought at 2 year old W213 220d which he is delighted with but now he is into his second year of ownership he has to pay extended warranty of £70 pm as he covers >20k miles a year. I get the feeling that he will go back to not owning a car with a PCP at the next change which will be circa 60k miles, with depreciation and extended warranty costs I don’t think there is much in it if you do the miles if you don’t do the mileage and tend to keep a car buy private every time in my opinion
 

rorywquin

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I think it all depends on your personal circumstances. If you cannot afford to pay cash for the car you want then you have to finance the car somehow or lower your standards to where you can afford to pay cash.

With the terribly low interest rates on offer (for savings) these days it is probably better to pay cash (if you have it available) rather than make a finance house richer.

Go and get some financing quotes on the car you want, do the sums and see what it is going to cost you.
 

flowrider

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PCP deals are normally terrible on secondhand cars so if PCP is the only way you can afford to buy a car make sure it is a new one where the dealer will add incentives such as low interest rates, deposit contributions or free servicing.
 

EmilysDad

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I always let someone take the initial hit on depreciation and buy second hand even though I'll probably borrow some of the screen price to buy it. I can never get my head around paying £xxx a month for a car I never own though there are generally no other monthly costs of servicing etc
 

rorywquin

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I always let someone take the initial hit on depreciation and buy second hand even though I'll probably borrow some of the screen price to buy it. I can never get my head around paying £xxx a month for a car I never own though there are generally no other monthly costs of servicing etc

Ditto on never owning the car but I don't mind taking the hit on depreciation for a new car that will give me the exact spec I want especially, if I'm going to hang onto it for a while (well that is what I tell my wife).
 

rifiki

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For me cash is king, if you can't afford a particular car get a cheaper/older version.
Insurance backed guarantee, pay the money into a seperate account with overdraft facility, if nothing goes wrong you have the money.
 

EmilysDad

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Ditto on never owning the car but I don't mind taking the hit on depreciation for a new car that will give me the exact spec I want especially, if I'm going to hang onto it for a while (well that is what I tell my wife).

I just must be tight. Someone lost over £35k on my car over 4 or 5 yrs ..... that would bring me to tears! :D:D I could think of many things I could buy with that rather than help line MB's pockets
 

CJD

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I just must be tight. Someone lost over £35k on my car over 4 or 5 yrs ..... that would bring me to tears! :D:D I could think of many things I could buy with that rather than help line MB's pockets
I see where you are coming from, and fully understand your reasoning behind it.
But if nobody took the hit and bought new, you wouldn't have a nice supply of newish second hand cars on the market for you to buy.
So like most things its horses for courses, purchase what suits you, your wallet and circumstances.
Personally I always buy cash - but thats just me.
 

Blobcat

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I think the whole industry is changing and doing everything they can to get drivers away from outright ownership.

I've always bought outright and been very lucky with no expensive bills so far... Looking at newer cars with £1,200 headlights and £4,500 ad blue systems as well as a myriad other 3 and 4 figure repairs it makes one wonder how good a 2 or 3 year old car will be to buy.
 

keefysher

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To the OP, are you looking at a car that is tied in some way to your employment? ie you get a car allowance and a set of rules to comply with? Is that the pressure you feel you are being put under? That is where the PCP product has come from and makes it 'affordable' to meet the requirements of your employer, hence the rows and rows of the same car in the office car park. You may have little choice but to join the sheep. However will your employer guarantee employment for the term of the PCP, or leave you will a millstone at some point.

A new car has no guarantee to be reliable, any more than a well maintained and regularly used, used car.

Depreciation isn't truly an issue with a PCP on a new car. You are entering into a term at a rate that provides a car that you then hand back. It's basically a long term rental. With incentives offered, taking out the PCP at the right time you can have a highly specced car for a much lower 'price', see the recent list put up by JBell on the run out W222 S Klasse earlier. You are able to get a mega specced car at a known monthly cost that you know won't change. In a 'car allowance' scenario you will almost certainly p1ss off your peers and bosses if you rock up in a S Klasse due to you being more financially savvy than them. That scenario of a run out can work out as a good way to buy a car as a keeper. I did that on my 2nd W211, although it was paid for by travel expenses as was the 1st, and the W221 I had, also on a PCP. So not actual cost to me personally, but not everyone is in the position or takes the risk of going out on your own.

I'm unsure that putting cash into a car is the right thing to do in current times. None of my PCP cars has had any cash in them, do the right deal there is no cash needed. At a certain point you can hand it back and walk away if things change.

20-30 years ago, cash was king, not today. If you are intent of putting cash in and want a new car and to keep it, then take out a PCP, pay the 1st monthly payment then clear it as you will if done properly got a highly specced car at a 'lower' price with inducements to take the PCP that brings the overall 'price' down.

With the current uncertainty around fuel types, I'm probably going to pay off the PCP early on my current W166 that was a good low price with discount, dealer deposit contribution, matching carlow and with everything on it and use my killer diseasel to tow for a long time yet.

You may get lower finance ability, but the car industry is set for their product, PCP, so you may not get the incentives.

I don't get the comments about not able to afford a car, its down to individual circumstances. Lots of things in life are not affordable, apparently. Cars, houses, kids, but there are ways to do them.

Back in the day I bought cars for cash both new and second hand, also on manufacturers finance products when interest rates were 14% and finance was 3.4%, it was cheaper to use finance than use cash on deposit.
 

LostKiwi

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I've not financed a car for over 15 years.
MrsLK on the other hand has almost always had hers on finance (aside from w years ago when she bought the car at end of term then a year later used it to finance the deposit on the current one).
The only way I will have a vehicle on finance is through her 30% staff discount at her employer, sell it after 2 years and repeat. A Discovery Sport for c£200 a month is pretty tempting.
 

sonic

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I always let someone take the initial hit on depreciation and buy second hand even though I'll probably borrow some of the screen price to buy it. I can never get my head around paying £xxx a month for a car I never own though there are generally no other monthly costs of servicing etc
Same with me, I could afford a new car but don't like the idea of the loss of all that money. Our two current cars were bought cash 7 months old & 2 years old. They are now 8 & 9 years, but both being retired we are not doing the miles now. Both are very reliable so I cant see any reason to change.
 

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I've not financed a car for over 15 years.
MrsLK on the other hand has almost always had hers on finance (aside from w years ago when she bought the car at end of term then a year later used it to finance the deposit on the current one).
The only way I will have a vehicle on finance is through her 30% staff discount at her employer, sell it after 2 years and repeat. A Discovery Sport for c£200 a month is pretty tempting.
You want an Evoke Drop top you do :p
 

Blobcat

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Same with me, I could afford a new car but don't like the idea of the loss of all that money. Out two current cars were bought cash 7 months old & 2 years old. They are now 8 & 9 years, but both being retired we are not doing the miles now. Both are very reliable so I cant see any reason to change.
Killing the environment (economy) single-handedly :rolleyes:
Don't you understand the best thing you can do for the environment is to lease a new car every 2 years...:p:D
 

MalcQV

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I have three cars and own two outright. Those are old cars, though one is worth almost 2.5x what the CLA was new.
My CLA is in a PCP and it is the first ever car I have obtained that way. I can buy it at the end of the term but after 3 or 4 years I will be bored with it.
I paid for servicing for the term too so it is kind of easy to budget. That said the monthly payment would be nice in my pocket but then so would my morgage!

Not sure what I will do next time as I keep changing my mind.
 

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