Should i buy my car with cash or PCP finance deal

35
Found 30th Aug 2017Edited by:"DoHS"
Please can someone explain PCP finance pros and cons.

I am in the process of buying my car, saw a good deal (i think) on brand new Skoda Fabia 1.2tsi SE L model solid colour, no extras, but its on PCP.

Duration: 36 months @ £150 per month,
my deposit of 2k + 2k from Skoda (total deposit £4,000)
optional payment at £5,638
retail cash price £14,208
optional final payment £5,638
opyion to purchase fee £10
total amount payable £14,881
total amount of credit £10,208
representative APR 2.9%
rate of interest 2.82%

Totally new to this concept as i have always been on car lease through the work (set amount per month, and that included fleet/corporate insurance and servicing) and after 3 years car goes back and I order new-one.

Am i just better off buying my own car (nearly new or pre-reg) and keep it until goes (funds available no need for credit/loan, or get a PCP, yes its nice to have a new car every 3yrs, but i am not that bothered to be hones.

Any advice would be greatly appreciated/received.

Many thanks in advance.
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Click bait, I was going to sing the virtues of angledust
kester761 m ago

Click bait, I was going to sing the virtues of angledust


???
Grab a car with a little manufacturers warranty that's already lost main value. Maybe 2015 model cars with low mileage. Take out a loan on the AA, which has a very low loan rate at around 3% on 5K plus. Skodas depreciate like crazy, why not pick up a low mileage polo?
Just buy a brand new Dacia Sandero for £5995 otr.
Channel 4's Dispatches recently covered PCP

I seriously recommend you spend 30 mins and watch it

channel4.com/pro…001
Is it a Fabia or Yeti? I would try to get a deal for cash if that's the way you want to go, you will be able to get cheaper than going pcp. I'm never going to buy new again, either lease and hand back or second hand.
philphil616 h, 32 m ago

Channel 4's Dispatches recently covered PCPI seriously recommend you spend …Channel 4's Dispatches recently covered PCPI seriously recommend you spend 30 mins and watch ithttp://www.channel4.com/programmes/dispatches/on-demand/66549-001



I haven't seen that but I've said a few times on this forum to watch out for pcp in the future. Something like 82% of all new car sales are pcp and when the deal is over people get a new car. Flooding the used car market with nearly new cars nobody can sell because they again stay on pcp getting a new car. It's only a matter of time before those future guaranteed values to plummet. Then your next car you have less equity and your monthly price goes up or you pay a bigger lump sum
MIDURIX5 h, 51 m ago

Is it a Fabia or Yeti? I would try to get a deal for cash if that's the …Is it a Fabia or Yeti? I would try to get a deal for cash if that's the way you want to go, you will be able to get cheaper than going pcp. I'm never going to buy new again, either lease and hand back or second hand.


Sorry it's Fabia. Forgot to put it in the description.
DoHS3 h, 14 m ago

Sorry it's Fabia. Forgot to put it in the description.


Do you know that the 1.2 litre petrol engine has been dropped? I would imagine for the future that that would really hurt the resale value because people will be looking for the newer better 1.0 litre for your model year.
Just went to drivethedeal.Com and with the exact dealer discount and % interest, same car and trim but with the newer 1.0tsi and got a price of 12,133.80, so almost £2k off your price.
I would also look at the special editions like the colour, month carlo, redline etc, you will probably get more stuff and for cheaper than the SE L trim.
MIDURIX52 m ago

Do you know that the 1.2 litre petrol engine has been dropped? I would …Do you know that the 1.2 litre petrol engine has been dropped? I would imagine for the future that that would really hurt the resale value because people will be looking for the newer better 1.0 litre for your model year.


i didn't know that at all, much appreciated. Went To Telford Skoda and was never told that, they had few of pre-reg Fabias 1.2tsi (registered in July) for £13,999 with 50miles on the clock.
DoHS7 m ago

i didn't know that at all, much appreciated. Went To Telford Skoda and was …i didn't know that at all, much appreciated. Went To Telford Skoda and was never told that, they had few of pre-reg Fabias 1.2tsi (registered in July) for £13,999 with 50miles on the clock.


£14k is very much a rip off. Skoda dealer near me does 0% finance also, don't know if that includes the deposit contribution tho. I would consider drivethedeal or similar and then they put you in touch with a dealer.
hairray13 h, 32 m ago

Grab a car with a little manufacturers warranty that's already lost main …Grab a car with a little manufacturers warranty that's already lost main value. Maybe 2015 model cars with low mileage. Take out a loan on the AA, which has a very low loan rate at around 3% on 5K plus. Skodas depreciate like crazy, why not pick up a low mileage polo?


I 2nd this. I just got a 2 year old Kia with 11k mileage and 5 years left on warranty for half the price of getting it new
the above details i have obtained via carwow, Skoda dealer from Gloucester and my apologies it was for a Fabia 1.0 TSI SEL model, not 1.2tsi. cash price was £13,280 tho.

i also fancy Hyundai i20 SE (5 yr warranty)
DoHS46 m ago

i also fancy Hyundai i20 SE (5 yr warranty)


They only have 3 gears you know and cant do over 30mph, or the ones I get stuck behind appear to.
123thisisme2 m ago

They only have 3 gears you know and cant do over 30mph, or the ones I get …They only have 3 gears you know and cant do over 30mph, or the ones I get stuck behind appear to.


Hahaha
Dannyrobbo6 h, 59 m ago

I haven't seen that but I've said a few times on this forum to watch out …I haven't seen that but I've said a few times on this forum to watch out for pcp in the future. Something like 82% of all new car sales are pcp and when the deal is over people get a new car. Flooding the used car market with nearly new cars nobody can sell because they again stay on pcp getting a new car. It's only a matter of time before those future guaranteed values to plummet. Then your next car you have less equity and your monthly price goes up or you pay a bigger lump sum


PCP according to this documentary is one of the worst ways to get a car on finance.

It's worth a watch just to update if you know most of the facts.
philphil611 h, 22 m ago

PCP according to this documentary is one of the worst ways to get a car on …PCP according to this documentary is one of the worst ways to get a car on finance.It's worth a watch just to update if you know most of the facts.



I will give it a watch, I decided to read up on pcp after a trip to "motor range" where they were pushing it saying all about this guaranteed value and a good deposit on a next car. They didn't have the answers when Asked about changes in value and negative equity just saying well you can give the car back and walk away. I stayed well away and got a loan
Watched the program last night. Quite shocked how much this PCP is pushed. I can see this becoming like PPI thing in the near future to be honest. I will stay away definitely now. Got funds available and there is no need for any financing.

I have seen just last night that few Fabias 15/16 plate 1.2tsi have became available probably the push for the new reg today and as the new engine 1.0tsi is now out so need to get rid of the old model. Read on Škoda forum that many people are not so keen on the new 1.0tsi engine for some reason.
Edited by: "DoHS" 1st Sep 2017
PCP is an excellent way to buy a car if the terms are right, i.e. 0%. The only loser is the manufacture when the term is up if the car has depreciated below the GMV and you decide not to buy. If you'd had bought the car in cash you would have had to take the hit of that additional depreciation.

There are plenty of 0% deals out there if you shop around. Although I would add now isn't the best time to be buying a car. You'd be better off waiting for the new reg demand to drop and try again in November/Decemeber when sales will have dried up and there will be more incentives pushed.
Edited by: "seabs" 1st Sep 2017
seabs1 h, 9 m ago

PCP is an excellent way to buy a car if the terms are right, i.e. 0%. The …PCP is an excellent way to buy a car if the terms are right, i.e. 0%. The only loser is the manufacture when the term is up if the car has depreciated below the GMV and you decide not to buy. If you'd had bought the car in cash you would have had to take the hit of that additional depreciation.There are plenty of 0% deals out there if you shop around. Although I would add now isn't the best time to be buying a car. You'd be better off waiting for the new reg demand to drop and try again in November/Decemeber when sales will have dried up and there will be more incentives pushed.


Just seams that I can't find any 0% on Škoda Fabia or Hyundai i20 SE at the moment. I am not in a rush to get the car to be honest. However I am concerned not to miss the deals with last year regs s they have suddenly poped up. But thinking about it there could be some more as people will be swapping their current cars for the new reg. So it might be some better deals in Nov/Dec as you have suggested.

Anyone else shares this views with regards to the best time of year to hunt down a good deal for a 2nd hand car like Fabia 1.2tsi SEL or I20 SE?
seabs3 h, 21 m ago

PCP is an excellent way to buy a car if the terms are right, i.e. 0%. The …PCP is an excellent way to buy a car if the terms are right, i.e. 0%. The only loser is the manufacture when the term is up if the car has depreciated below the GMV and you decide not to buy. If you'd had bought the car in cash you would have had to take the hit of that additional depreciation.There are plenty of 0% deals out there if you shop around. Although I would add now isn't the best time to be buying a car. You'd be better off waiting for the new reg demand to drop and try again in November/Decemeber when sales will have dried up and there will be more incentives pushed.



seabs3 h, 21 m ago

PCP is an excellent way to buy a car if the terms are right, i.e. 0%. The …PCP is an excellent way to buy a car if the terms are right, i.e. 0%. The only loser is the manufacture when the term is up if the car has depreciated below the GMV and you decide not to buy. If you'd had bought the car in cash you would have had to take the hit of that additional depreciation.There are plenty of 0% deals out there if you shop around. Although I would add now isn't the best time to be buying a car. You'd be better off waiting for the new reg demand to drop and try again in November/Decemeber when sales will have dried up and there will be more incentives pushed.



The difference is you have nothing for your money when you walk away, you've just paid somebody else's depreciation for 3 years. the next car is going to cost you more because the manufacturers are getting tougher on those GMV values for this reason. A few years ago it was a good idea but not so much now.
Dannyrobbo1 h, 8 m ago

The difference is you have nothing for your money when you walk away, …The difference is you have nothing for your money when you walk away, you've just paid somebody else's depreciation for 3 years. the next car is going to cost you more because the manufacturers are getting tougher on those GMV values for this reason. A few years ago it was a good idea but not so much now.


but if you had bought the car with cash and 3 years later it is worth less than the GFV value would have been through PCP then you have effectively 'lost' the difference as you cant 'walk away'.

it can work both ways.
But at the end of the 3 year deal if my car that I've bought is worth less than expected I don't need to walk away I still have an asset to get me to work.

If the upgrade on pcp is no longer attractive some may HAVE to walk away.
So if I can find a good PCP deal with low % as possible and then buy the car at the end. Would that be a good option then for me?
DoHS37 m ago

So if I can find a good PCP deal with low % as possible and then buy the …So if I can find a good PCP deal with low % as possible and then buy the car at the end. Would that be a good option then for me?


if you are dead set about buying it at the end, there is minimal risk/disadvantage to a PCP, the only caveat being you will want GAP insurance in the event it's written off before the 3 years is up. saying that, you wouldnt be financially worse off than if you bought with cash as you'll be the same amount of money down but the stress is worth avoiding and it protects your investment

if you can get 0% then i'd go for it and invest your cash for 3 years (although the return might be small with current interest rates).
Dannyrobbo54 m ago

But at the end of the 3 year deal if my car that I've bought is worth less …But at the end of the 3 year deal if my car that I've bought is worth less than expected I don't need to walk away I still have an asset to get me to work. If the upgrade on pcp is no longer attractive some may HAVE to walk away.


then you go buy a 3 year old car from elsewhere less than the GFV would have been on the first car, it's not rocket science
adamspencer9525 m ago

then you go buy a 3 year old car from elsewhere less than the GFV would …then you go buy a 3 year old car from elsewhere less than the GFV would have been on the first car, it's not rocket science



So you have paid your deposit, somebody else's depreciation for 3 years have the new car back and ended up in at best the same situation than just buying the car in the first place...yeah it's not rocket science just bad business in today's climate.
Edited by: "Dannyrobbo" 1st Sep 2017
Dannyrobbo7 m ago

So you have paid your deposit, somebody else's depreciation for 3 years …So you have paid your deposit, somebody else's depreciation for 3 years have the new car back and ended up in at best the same situation than just buying the car in the first place...yeah it's not rocket science just bad business in today's climate.


without having to front the cost of the car, yes

you can therefore invest the cash elsewhere and if using 0% finance, you can actually earn a bit of money than buying with cash
adamspencer951 h, 31 m ago

without having to front the cost of the car, yesyou can therefore invest …without having to front the cost of the car, yesyou can therefore invest the cash elsewhere and if using 0% finance, you can actually earn a bit of money than buying with cash



adamspencer951 h, 31 m ago

without having to front the cost of the car, yesyou can therefore invest …without having to front the cost of the car, yesyou can therefore invest the cash elsewhere and if using 0% finance, you can actually earn a bit of money than buying with cash



Given this is a deals site maybe you should post some, people would appreciate a car for 3 years then some free money back
I've never bought a car using PCP or any finance deal from a dealer - so not the best to give advice on the actual deal. This deal will cost £205/month taking into account the deposit.

I consider the cheapest way to own a reliable car is to buy nearly new and keep the car for most of the car's life! We currently have a 12 year old VW that I calculate has cost me £107/month depreciation and a 11 year old Honda that has cost £87/month . Both of these I actually bought new but would now buy nearly new to avoid the gross depreciation in the first couple of years. Have had to maintain them of course, as you would with a car on PCP - but have lived with the odd scratch and scrape which you would not be able to do if you had a PCP contract.

The Motorpoint website have several 66 plate 1.2 TSI Fabias with less than 10k miles at £9999. Over 3 years that is £278/month (at 0%) - so you could say for just £73/month for 3 years you would end up owning a 4 year old Fabia!
Van197332 m ago

I've never bought a car using PCP or any finance deal from a dealer - so …I've never bought a car using PCP or any finance deal from a dealer - so not the best to give advice on the actual deal. This deal will cost £205/month taking into account the deposit.I consider the cheapest way to own a reliable car is to buy nearly new and keep the car for most of the car's life! We currently have a 12 year old VW that I calculate has cost me £107/month depreciation and a 11 year old Honda that has cost £87/month . Both of these I actually bought new but would now buy nearly new to avoid the gross depreciation in the first couple of years. Have had to maintain them of course, as you would with a car on PCP - but have lived with the odd scratch and scrape which you would not be able to do if you had a PCP contract.The Motorpoint website have several 66 plate 1.2 TSI Fabias with less than 10k miles at £9999. Over 3 years that is £278/month (at 0%) - so you could say for just £73/month for 3 years you would end up owning a 4 year old Fabia!


thanks for this, i think that i will probably go down this route to be honest. just out of interest how is car depreciation calculated?, i could never understand that concept, you always hear people if you buy brand new car and take it around the bloc and being it back the next day you will loose £££.

i understood that nearly new is pre-reg or ex-demo car and everything else is a 2nd hand/owner. Considered the Motorpoint, but have heard some horror stories and well bad reviews which has put me right off that idea, i know the dealers are expensive, but i just feel that bit more secure, i know that many people would also probably say dont trust the dealer either, perhaps.
DoHS24 m ago

thanks for this, i think that i will probably go down this route to be …thanks for this, i think that i will probably go down this route to be honest. just out of interest how is car depreciation calculated?, i could never understand that concept, you always hear people if you buy brand new car and take it around the bloc and being it back the next day you will loose £££.i understood that nearly new is pre-reg or ex-demo car and everything else is a 2nd hand/owner. Considered the Motorpoint, but have heard some horror stories and well bad reviews which has put me right off that idea, i know the dealers are expensive, but i just feel that bit more secure, i know that many people would also probably say dont trust the dealer either, perhaps.


Depreciation - I've just done a simple straight line depreciation between what I paid and what it is worth now divided by the no. of months I owned the car. Could have done a Net Present Value (NPV) calculation to take into account difference in value between money now and 11/12 years ago but interest rates have been so low over most of that period it's hardly worth it.

Motorpoint -- my son bought a car from them in December. I was very happy with the service. Car was just 11 months old, an ex hire car (Eurocar) , 9000 miles, that had just been taxed for 6 months. So 25 months manufacturers warranty left at £8000 lower than the brand new 'screen' price! Car was in mint condition. Not had a problem since purchase. I would recommend them. I looked at main dealers as well - their equivalent aged cars where either ex mobility (some well used) and other also ex hire cars - so felt no difference to Motorpoint. As long as you're buying a car with some manufacturers warranty left I think you're relatively safe.

PCP - someone has to make money from this and I doubt very much that it is the customer!.

Skoda Fabia - good choice. Very pleased with my VW, never let me down, no major failures. Son and daughter also have VWs and likewise have had good experiences. Our next cars will be from the VAG group.
We were recently looking at a new car and found pcp a heavily pushed sales tac.

as a result I did a lot of research and found that pcp can be settled early and interest will only be payable up to the date you settle.
Thus it can be advantageous if you definitely want a new car and the dealer will put an additional contribution down on the car when you take out pcp.

We had several dealers tell us to take the pcp in order to get the dealer contribution. Then after the first months payment is made, call up the finance company and settle the pcp with the money you either have sat in the bank, or from a low rate personal loan.

This allows you to keep the dealer contribution and get the best load rate.

There may never a small admin charge to settle early, maybe £10 but in the case of the op that would be negligible compared to the dealers £2k contribution.

I was sceptical but looked into it and it's right. Its new FCA regulations that allow this as companies are not allowed to charge full interest on any finance that is settled early.
Edited by: "Suzannzan" 1st Sep 2017
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