[HighlandPete]

Originally Posted by Gordon4499

There is no ‘one shoe fits all’ when buying a car but there is plenty of choice out there. As HighlandPete mentioned, just make sure you go in with your eyes open and make sure you understand what you are paying. It’s amazing how many don’t!

Exactly, and why good research for getting a car "without smoke and mirrors" can get users into a new car with less costs over 3/4-years, than having HP on a similar used car.

I remember my son going off to get a used family vehicle, came home having done a deal on a new Zafira. The deal was a genuine package, good discount, 0% interest over the term, excellent trade in and 3-years with no additional running costs. No used car deal for a similar vehicle could match the costs over 3-years.

[Gordon4499]

Originally Posted by HighlandPete

I'm with you on the 'blur' of a trade in. What folks forget, the 'deposit' from a trade in, is only going to work once.

Work it out correctly, knowing you must also be saving/allowing for the next deposit, makes for the true cost. In the 520d example with a £5,999 deposit, that's an additional £167 a month on a 3-year PCP.

The real cost of the car, to repeat the 3-year PCP deal, is £436 + £167 = £603 each month. Man maths can't hide that fact.

HP is much more expensive per month, at £927 over the same period, but you should get about £13,000 back, leaving £6,000 as a deposit, after the 3-years. But it has cost you an extra £324 per month over the real cost of a PCP (£603), to have the same car.

Most folks on a PCP don't have the extra cash to put away, or buy a different way at higher monthlies. A PCP does allow them to have the more expensive car, by paying the interest on the balloon value.

For me, owning the car at the end of some finance deal, is not critical unless we really have some emotional attachment to the car. What it costs to finance depreciation, (leased or purchased) is the major cost of running a car. Owning the car doesn't really change that monthly cost, unless we keep it much longer than the finance term.

But then we are into additional running costs, particularly if we run with a warranty and have added maintenance costs, MOTs, etc.

Yes that's the catch most forget about and the true cost of running a new car is higher than we make ourselves believe!

My mate buys sheds and runs them into the ground which I am sure is the sensible way to go

[HighlandPete]

Originally Posted by Gordon4499

My mate buys sheds and runs them into the ground which I am sure is the sensible way to go

Problem is, we like our new or nearly new metal.

I remember having a discussion with friends and family on what value they put on having a new car, as opposed to a nearly new one.

Answers were quite revealing. Most would pay more, one would not hesitate to pay another £5,000 simply to be the first user, even if the used car only had a few miles on it.

I have known a few who run sheds, amazing how low the costs can be if they have the right car. On the other hand I've witnessed users paying good money after bad, costing them heavy to run a shed. Some never to do it again.

[Gordon4499]

The mate in question takes it to a whole different level.. His brother has a garage and gives him customers old tyres that still have tread on them!

I jokingly asked him what he thought his car was worth and he said "depends on how much petrol is in it"!!

Ohhh and this guy is a higher rate tax payer 😀

[balfron100]

And there we have it folks, some here are trying to explain away or justify a rip off. Fact is PCP's are rip off, simple.

The End.

[robbiep]

Originally Posted by balfron100

And there we have it folks, some here are trying to explain away or justify a rip off. Fact is PCP's are rip off, simple.

The End.

That, or you just don't understand the first thing about loans or finance in any way, shape or form.

Lets face it, most cars are bought or leased on finance these days - whether it's a £10k Ford, or a £150k Ferrari.
Your argument seems to be that all forms of finance should be banned as they are 'rip-offs'. Which would stop virtually anybody from buying a new car, unless they had the full amount sitting in the bank.

You might as well say that mortgages are a rip-off, as they put people into houses they otherwise wouldn't be able to afford. Same for credit cards or ANY form of loan.

Going by your (limited) logic, you'd not be allowed to buy a house unless you had the entire amount for it. Which would be an utterly stupid argument - but that's the argument you are making.

If Mr X has a good-paying job, and wants to buy a £20k car, but only has £5k as a deposit (and thus wants to finance the rest of it), are you really saying he's being ripped off ? Or are you saying that No, he shouldn't be allowed to buy a £20k car, and should be FORCED to buy a £5k car instead ?

Utter stupidity.

[Gordon4499]

Originally Posted by balfron100

And there we have it folks, some here are trying to explain away or justify a rip off. Fact is PCP's are rip off, simple.

The End.

To be honest Balfron, this repeated comment isn't contributing anything to the debate. If you have eveidence/experience to back up your "rip off" claim then please feel free to share. I would genuinely be interested to read it.

[JOHNBMWM5]

My mate is about to change his "A" class for a CLA, he payed £3K down and £300 / month for three years on the "A" class but 5K miles only.
He likes the idea for just walking away.
He now has to find £3.6K deposit and £350/Month for his new car next month.
Same miles.

[balfron100]

It seems the majority of opinion here can clearly see the issues that exist with PCP's fact is its not the great deal its painted when you visit the dealer showrooms.
Salesmen are there to go out and sell it hard, not everyone buys it and this thread clearly shows that.

If on the other hand you like this sort deal then go for it and I expect the dealers will love you for it.

[robbiep]

Originally Posted by balfron100

It seems the majority of opinion here can clearly see the issues that exist with PCP's fact is its not the great deal its painted when you visit the dealer showrooms.
Salesmen are there to go out and sell it hard, not everyone buys it and this thread clearly shows that.

If on the other hand you like this sort deal then go for it and I expect the dealers will love you for it.

Go on then.
You can 'clearly see' (your own words) the issues that exist with these. You've described them as a rip-off.

Back up those statements. Show how, exactly, they 'have issues'. Show WHY they are a rip-off.
Because without some facts to back up your wild, sweeping statements, they mean absolutely nothing. They are pointless.
I might as well say that all people in Glasgow are idiots for living in Glasgow. I don't need any proof for it, I'll just say it.

Doing so would be stupid. As stupid as your pronouncements.

[babaikram]

Sell or get a cashback for your old car when starting a new PCP deal and use the money as part of your balloon payment if you like the car. If you don't like the car but the car is worth more than the balloon payment, still settle the ballon payment and sell it in an open market.

If the car is problematic during the PCP period I would return it no matter the situation.

If the car is worth less than the balloon payment at the end of PCP but I like it, I would either return the car or keep it (emotional attachment)

[babaikram]

Originally Posted by balfron100

It seems the majority of opinion here can clearly see the issues that exist with PCP's fact is its not the great deal its painted when you visit the dealer showrooms.
Salesmen are there to go out and sell it hard, not everyone buys it and this thread clearly shows that.

If on the other hand you like this sort deal then go for it and I expect the dealers will love you for it.

Starting off the purchase of a car could land you a very good deal that you would end up paying less than the amount you start the credit on, if you have the ability to pay the balloon payment.

As mentioned before, no deposit, take the minimum mileage allowance (knowing fully well you would exceed it) to pay the minimum per month. Calculate how much per month times no of months of the PCP deal. Add it to the Guaranteed future value (GFV) of the car you agreed on. You would be surprised at times that the sum of your total PCP payment and GFV might be less than the amount of credit you started out with. That is negative interest rate, better than 0% APR

This usually works for main stream vehicles like BMW 5 series, 3 series etc that depreciate in value a lot

You are very unlikely to get negative interest rates on Hire Purchase. 0% APR hire purchases usually require hefty deposits like 30% to 50% on a depreciating asset.

[HighlandPete]

Originally Posted by balfron100

It seems the majority of opinion here can clearly see the issues that exist with PCP's fact is its not the great deal its painted when you visit the dealer showrooms.
Salesmen are there to go out and sell it hard, not everyone buys it and this thread clearly shows that.

If on the other hand you like this sort deal then go for it and I expect the dealers will love you for it.

You can get a bad deal at garages without it being associated with a PCP. Same as you can get a good deal on a PCP from another garage.

It isn't the PCP that is necessarily the issue, it is when 'sales' use smoke and mirrors, but that can be for any type of deal.

Plus a PCP can be the choice, to suit the buyer's need. Can be the best method to fund a car, in some financial climates. I did it back in 2006, when my own assets were best left making money. Buying for cash would have cost me earning power. The PCP deal allowed my own finances to sit intact, the profits funded the car for 3-years, without costing me anything. A well sourced PCP type deal was a cheap way to finance my car at that time, had a decent trade in to keep monthlies reasonable. Bought for cash this time, as that suited where I was with my own assets.