There are only two ways of paying for the use of a car. Buying it outright, or renting it. A huge industry has grown up around the latter method to confuse and fleece the Private Car Purchaser. Indeed, I once read of Porsche being described as a highly profitable financial services company with a small sideline in car manufacture. Actually, there is only one way...

Dealer: How are you going to pay for it, sir?

PCP: Through the nose, as usual.

I don't care how people buy cars. Any car salesman will be able to tell you tales of how financially illiterate many of the car buying public are. Couple this with the fact buying a car is stressful for most buyers and you can see why buyers sign on the dotted line not having a clue how much the car is actually costing them. PCPs are the worst for this due to the number of variables. Deposit, monthly cost, APR, flat rate, GFV, trade in can all be manipulated to give the buyer what they think is a good deal. However some will always believe £200 a month for 5 years is cheaper than £300 a month for 24 months.

You're absolutely right many people have know idea about money and can't see the bigger picture thats how all this PPI scandal happend.

It can be bamboozleing for many people when they walk in to a car showroom and see all that shiny metal and the salesman is pushing this great deal at them. I've never gone in the showroom unless I know what i want but that's me and I appreciate others will buy on impulse and beleve every word the salesman is saying.

But if the individual can afford their monthly repayments then who are we to judge?

If it were me I would decide what car I wanted/needed and then look for the best deal. Second hand up to 3 years old. If the 10k was enough to purchase outright then I would do what I did earlier up in this thread if I got a better deal taking the finance an pay it off in in one go or put down a large depisit with low monthly instalments over a short period of time. I cant ever see myself taking out a pcp contract. But thats just me.

Marketing is, at the end of day, the satisfying of needs and any half decent salesperson will tell you that they are selling the perceived emotional "need" primarily and the product itself in second place. Once someone has their heart set on a particular car, or any other product, the route to buying it (ie finance option) is the very last consideration.
Quick straw poll - what would other backroomers in urgent need of a car do if they had an unexpected windfall of, say, 10 Grand and no other pressing needs? New or s/h? Cash, finance or a bit of both? Bank loan, PCP, Dealer finance?

I’ve been in that situation, except the windfall was personal savings. I needed a car as the old one failed it’s MOT and was to be scrapped. All this talk about a car depreciating 40% or whatever in three years is in my experience nonsense. Whenever I look around for a new car, buying new always seems the best option. If I buy used, dealers charge a fortune for a 1-3 year old used car. I’m talking about a VW Polo or similar car. I’ve always found it better to buy new using a broker, or a good deal, as you get the three year warranty, new tyres, brakes etc, more time before a new cam belt etc, and I know that the car has not been driven badly. In short you get a longer life for not so much more money. Thus far, touch wood, my car engines have lasted well, with never a worn clutch despite exceeding 100k miles in several cars, as I have the car maintained and I drive it in a sympathetic manner. Obviously I could buy a used car privately, but that comes with risk unless you know how to assess a car, and I don’t. Oh, and to answer the question I always pay cash or equivalent. For my last car the dealer told me to take out PCP and pay it off ASAP in order to get a £500 discount on the car. So that is what I did. Some consider that immoral, but VW Finance is a big organisation, they know what they are doing, and they charge a lot of people 6% interest, which is much higher than a bank loan. So I don’t loose any sleep.