Not bike related - finance PCP etc help needed

Discussion in 'Lounge' started by martinowen, Dec 16, 2016.

  1. martinowen

    martinowen Moderator
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    Ok probably going to sound really thick here but honestly no idea what I'm doing.

    I'm looking into purchasing a new car and I'm offered all these wonderful ways to pay PCP, HP and so on.

    I haven't really ever financed anything before (just my mortgage) and have no clue the of the best way to purchase the car.

    Can someone who does this regularly dumb this down for me?
     
  2. T.C

    T.C Senior Member

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    It was a few years ago (2009) but when I purchased my Jag I looked at all the options and went down the PCP route.

    It actually worked out cheaper to buy brand new than secondhand in that the interest rate on the new car was lower than secondhand.

    I entered into a 4 year deal which was comfortably affordable for me. I paid a deposit which if I remember was about £2.5K and I then just paid my finance every month.

    At the end of the term, I had the option of handing the car back and walking away with the residual value in my pocket

    Using it as a deposit against a new car

    Or paying the balance and keeping the car.

    I opted to pay the balance of around £4K and keep the car as the replacement for mine was still some time away.

    On the downside, I had to declare at the commencement of the contract how many miles I was likely to do each year which I was actually under, and I did not include a service pack which would have increased the montly cost.

    But that said, I was very happy with the deal and it made a new car with a prestige badge available to me for less than buying a Ford or something like that, and I still have the car as it has been super reliable uber comfortable and owes me bugger all.

    I have been considering getting myself a new Jag XE, and I would happily go down the same route again.

    What I cannot tell you is how using PCP compares with say HP or a bank loan, but the PCP was very easy a nd hassle free.

    Just my experience for what its worth
     
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  3. thefirebloke

    thefirebloke Elite Member

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    Martin, if you get in touch with Repsolwill he's the Principal at Evans Halshaw Ford dealership in Blackpool. Not suggesting Ford is necessarily for you but he knows his stuff inside out! :):)
     
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  4. And7rp2

    And7rp2 Elite Member

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    My 10p worth , for what it's worth !

    If new car costs £10k
    Usual way get a loan. £10k over 3 yrs 6% ish is £300 p/m about £900 in interest. Car is yours but it's lost half its value, so it's cost you £6k @ £300 p/m

    HP is much the same but some dealers can get lower % rates , but the car belongs to them until it's paid for and it has to be insured fully comp ( I know most do now but ! )

    PCP you put a deposit down ( smallest is best ) the garage will give you minimum value of the car ( which in most cases is 50% some cars can be as low as 60% ) and you finance what's left
    ie £10k car minus the GMV 50% so £5k at about 6% costs you about £165 p/m
    The dealer will tell you that your car will be worth more than the GMV but that might only be what they would offer you off the price of a new car, so don't bank on getting more , but you usually get enough for a deposit on your next car.
    The down side is you have to have the car dealer serviced ( some vat registered independent garages that have access to the dealer service network can be a bit cheaper ) that's why some dealers do a service deal which is worth taking btw
    And of course the BIGGGG bit the mileage charges , and the repair costs to wheels and body work above usual wear n tear if you hand the car back to the manufacturer, however if you go back to the dealer to buy another new car then unless you have done stupid miles over what you stated, then it's not important ,but it must be in good nick so he can sell it on.
    Most give you 5000 miles but it's not a great deal more a month to increase to a more realistic figure.

    Gone on a bit more than I wanted ,but in my head its if you go PCP treat it as renting a car that you have to look after as if it's your pride n joy after three years give it to the dealer get another new car for 3 years etc etc etc
    To me it's just another monthly cost that I can control , ie most new cars have a 2-3 warranty I only do 8000 miles a year so don't need to buy tyres or brakes etc and I don't have to MOT it
    Ok I have to service it but that is broken down monthly cost too.
     
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  5. T.C

    T.C Senior Member

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    Jaguar never made the stipulation about being dealer serviced.

    That said, I did have it dealer serviced for the 2 or 3, then went independent, and then had it dealer serviced just before the warranty was about to expire to get a few problems sorted. It was not an issue.

    But then of course, manufacturers are no longer able to force owners to pay main dealer costs and provided the vehicle has been serviced by someone witha reasonable level of competence and used genuine parts, they still have to honour the warranty.
     

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