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Post by moonraker on Mar 26, 2021 11:20:33 GMT
I'm thinking of buying a new car and gather that Personal Contract Payments are very popular. But ... Courtesy of Ratesetter returning my funds next week, I shall have enough money to pay cash and I can't think of any appealing alternative homes for it.
On the Web there are many sites about various ways of car finance, but very few comparing cash with PCP. A couple of these suggest that PCP would be not so great for me: in Normal Times I average fewer than 3,000 miles a year and expect to keep my next car for at least ten years. (It could be my last one.) And, being me, I'm quite likely to put two or three dings into the bodywork and wheels.
Thoughts, please.
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adrianc
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Post by adrianc on Mar 26, 2021 11:42:43 GMT
The major attraction of PCP for many people is that they can't afford to actually buy the car - but they can afford to rent it for three years, paying just the depreciation... And, as evry fule kno, paying on drip monthly isn't real money like actually buying something... A few hundred quid a month for a slice of aspirational bling? (Or, at least, a 116d... BUT IT'S A BRAND NEW BMW!)
If you PCP the car, then you do not own it. Just the same as if you lease or rent it.
The difference with PCP is that you CAN own it, when the deal expires and you exercise the option to buy it from the financier for the pre-agreed "balloon" (GMFV - guaranteed minimum future value). If the car's worth more than that, you can buy it and sell it again and benefit from the equity. Or you can buy it and keep it.
If you do pay the balloon, then the condition and mileage of the car at the end of the term is irrelevant - that's only an issue if you don't pay the balloon, and hand the car back.
Counterintuitively, it may well be better to go for a high annual mileage - you're ultimately paying the same purchase price to own the car, it's just a question of how rapidly you pay it via the monthlies, versus deferring repayment to the balloon. And, of course, the more you borrow for longer, the more interest you pay.
If you have the cash to hand, then the only reason to finance is that there may well be sweeteners that make finance a cheaper-overall route - you can, of course, then pay the finance settlement figure and buy the car in very short order. Remember, manufacturers and dealers don't make much off actually flogging cars - they make their money off flogging the finance...
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Post by Ace on Mar 26, 2021 12:00:02 GMT
When I looked into this a few years ago for my partner it was much cheaper to negotiate hard and pay cash if you have it available. The "Finance guys" at the garages will talk all sorts of convincing sounding nonsense to try to get their commission from a PCP deal, but cold analysis always favoured a cash deal.
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dave4
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Post by dave4 on Mar 26, 2021 12:13:07 GMT
ex demo for cash ? usually hi speck, all warranties ect honored. downside, Not brand new. Not the easiest thing to locate. maybe not the exact color/ speck u desire, maybe have to travel to collect.
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ptr120
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Post by ptr120 on Mar 26, 2021 12:26:08 GMT
With your low mileage I wouldn't personally consider a new car unless I wanted a very specific vehicle. Ex demo or 1 year old fleet car is where I'd look (and plenty of fleet cars have been handed back over the last year). You'll have a much shallower depreciation curve that way.
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adrianc
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Post by adrianc on Mar 26, 2021 13:35:59 GMT
With your low mileage I wouldn't personally consider a new car unless I wanted a very specific vehicle. Ex demo or 1 year old fleet car is where I'd look (and plenty of fleet cars have been handed back over the last year). You'll have a much shallower depreciation curve that way. Yes, the cost-per-mile over the first few years will be vicious... Over a decade, though... Not so bad. Probably. Depending on how expensive a new car we're talking about.
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michaelc
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Post by michaelc on Mar 26, 2021 13:40:13 GMT
When I looked into this a few years ago for my partner it was much cheaper to negotiate hard and pay cash if you have it available. The "Finance guys" at the garages will talk all sorts of convincing sounding nonsense to try to get their commission from a PCP deal, but cold analysis always favoured a cash deal. When I got my last car I wanted to pay cash but the best deal I could find was from a dealer who matched the deal I'd seen from an online car broker. On top of that he said if I took a pcp deal out instead of cash I'd get a further discount. I looked into it and was definitely allowed to repay in full without penalty after 1 month so that's exactly what I did.
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Post by Deleted on Mar 26, 2021 15:18:30 GMT
My last two cars were catalogue cars, that is those used by HQ to photo for the UK side image. Both Renault I found them on HQs website, no haggle and about 20% off list. Local garage didn't want to be involved, so I went to the nearest large dealer that would. The last one had 4 year's service included for that price.
It is worth estimating if you need to own a car, with MOT, insurance, fuel, maintenance etc and logical journeys (regular and irregular) I find a lot of people do better with taxis and the odd car hire. Plus you get another room to the house. One friend now has a sauna and the other a gym and cost savings.
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keitha
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Post by keitha on Mar 26, 2021 16:47:17 GMT
It is worth estimating if you need to own a car, with MOT, insurance, fuel, maintenance etc and logical journeys (regular and irregular) I find a lot of people do better with taxis and the odd car hire. Plus you get another room to the house. One friend now has a sauna and the other a gym and cost savings.
perhaps that works in a metropolitan area, unfortunately me and the likes of adrianc live where there is limited or no public transport for me to visit my partner ( who is 23 miles away by road ) via Bus is a change of bus at approximately half way, and again 3 miles from her house then a half mile walk at the end takes about 90 minutes if all connects up. by train well bus or taxi to the station 6 miles away, then a change of train and a bus at the far end again the shortest journey time wise is about 90 minutes. The car is 35 minutes, and is a sight more covid secure.
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michaelc
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Post by michaelc on Mar 26, 2021 16:54:44 GMT
If I got rid of my car, how would dispose of my [wine and beer] bottles at the bottle bank?
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Post by Deleted on Mar 26, 2021 17:35:48 GMT
sure you have to do the calculations, my friends live in a small town and both drive maybe 12 miles infrequently along routes where taxis move pretty often, both are fit and enjoy cycling 3 miles a day which certainly gets rid of the bottles to the bank. Moving partners into the house might be a solution if you want it. One has a partner half a country away and since they share who drives it still worked out cheaper to use a car service for half their monthly visits or use the trains It was a startling calculation. Some people like to hold onto a car "in case" for many reasons and I don't reject that emotional need as being valid. We were just surprised when we did honest comparison.
Obviously the public transport system has taken a real hammering this year but in 2019 I found flying to Cornwall and hiring a car was far cheaper than driving, plus I used a nicer car there.
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adrianc
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Post by adrianc on Mar 26, 2021 18:34:24 GMT
If I got rid of my car, how would dispose of my [wine and beer] bottles at the bottle bank? I put mine in the recycling bin, collected from the end of the drive fortnightly... FWIW, our sensible daily car is 16yo and cost two grand last year. It's booked in for a clutch in a fortnight. Our nearest bus stop is nearly a mile away - and has one bus a week (no, seriously) each way to the city 20 miles away. Great if you want to spend two hours there on a Wednesday lunchtime. Our next-nearest bus stops are five miles away. Our nearest station is in that city.
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Post by bracknellboy on Mar 26, 2021 18:35:58 GMT
If I got rid of my car, how would dispose of my [wine and beer] bottles at the bottle bank? you can fit them in a car ? Wow, I'm impressed......
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michaelc
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Post by michaelc on Mar 26, 2021 18:37:05 GMT
If I got rid of my car, how would dispose of my [wine and beer] bottles at the bottle bank? I put mine in the recycling bin, collected from the end of the drive fortnightly... FWIW, our sensible daily car is 16yo and cost two grand last year. It's booked in for a clutch in a fortnight.Our nearest bus stop is nearly a mile away - and has one bus a week (no, seriously) each way to the city 20 miles away. Great if you want to spend two hours there on a Wednesday lunchtime. Our next-nearest bus stops are five miles away. Our nearest station is in that city. Ahh - if only they collected them. And you mean you haven't checked out on youtube how to change your clutch? A lot easier than the old Haynes Manual method. No excuse these days....
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adrianc
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Post by adrianc on Mar 27, 2021 7:40:54 GMT
Oh, I know how to. I even have a two-post lift in my garage...
I just CBA, given it's the sensible daily. It's one of those things that, if it's straightforward, it won't be a huge bill - and if it turns into a PITA, I'm happy to pay.
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