Quite topical.
Currently looking at a new Alfa Giulia.
They offering up to £7.5k deposit contribution. (‘20 MY due out soon)
With interest rates around 2.8% and importantly 5yr warranty.
I could get a 9 month old one at a similar price as (new with contribution) but interest rate for a used car is 12% therefore monthly payments considerably more.
There is no straight answer, depends what age and type of car you want.
To me looks like used cars on a PCP are a no no.
My car allowance happily covers it, not sure I want a 27k personal bank loan.
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Depending on spec there are 200 Guilia's pre-reg from £24K with low interest rates than 12%
Autotrader see if there is a deal there
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Yes, I seen those.
Fancy the Nero Edition.
It also appears that no all dealers are not giving the full 5 year warranty. I can also get a 3 year service pack for £399 on a new one too.
To be honest my last few cars have had issues due to the previous keeper (admittedly I should have picked them up).
This is my last big car purchase - retirement planning takes over so want to buy new in the hope of keeping it for a good while.
Whether an Alfa is the car for that is another conversation altogether! :-)
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When I bought my last car, the Nissan Pulsar I was a cash buyer but was persuaded by the salesman to take out a PCP. It was stupid not to, there was a £3000 Nissan contribution to your deposit which was one of the factors that reduced the purchase price. Take out the PCP and you got 3 years service for £99 instead of £299 (but dealer did not charge the £99). He told me to cancel the PCP after I had collected the car, pay off the balance and pay only interest for the days it had been running with no fees.
So after all the discounts and contributions a car that was listed at over £19000 (including metallic and service plan) cost us £12000 OTR and was not a pre reg.
2 days after collection I rang RCI (Renault Bank) and got a settlement figure. The interest was about £12. Paid immediately and got a letter confirming that RCI had no interest in the car.
What is not to like about a PCP.
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PCP’s do make sense on a new car if there’s a strong manufacturer backed deal, especially if you play the wee game with them and settle the thing just after delivery. Hoover up the deal then pay it off via savings or a low rate loan. Just watch for small print in any agreement you sign however as firms are not best pleased by this wee loophole.
On cars that depreciate hard like the Alfa it makes sense to have a guaranteed future value and a certain exit from the car plus the bonus of a 5yr warranty is another big help again on a car with a history of reliability woe.
But it’s all dependent on the deal that’s available at the time. Does make a mockery of list prices if they’re giving £7.5k sweeteners though and it’ll hurt residuals. All the better for used buyers mind.
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Personally I would not touch PCP due to inflexibility - none of us know what the future holds in the next 3-5 years.
There is the occasional good deal - but this also true of outright purchase for different models at different times - upgrade coming, excess stock, model run out etc. It is mainly a way for the motor industry to sell more cars, not a way for you to get a new car cheaply!
It is better to pay for that which you can afford - what you need, not what you want. Cost per month seduces you into believing that it is affordable - but multiply by 12 and reflect on what else you could buy for £3-5000 a year.
Unless you are fortunate enough:
- to have a secure well paid job,
- to have lots of capital behind you,
- to be are at the start of a potentially well rewarded career (doctor, lawyer etc)
- to be close to retirement with good pension provision
I would not recommend it. In fact if you fit any of the above categories you don't need to borrow the money dressed up as a PCP deal anyway.
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PCP is a flexible as hire purchase.
You can get out at any time by paying off the balance.
Problem is a lot of PCP deals allow little or no deposit and as there is a balloon payment at the end your monthly payments cover mainly interest and little equity.
The chances are you will owe more than your car is worth and it can cost a lot to get out of it.
It’s PCH where you are tied.
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There is a deal to suit all circumstances. It all depends on your requirements. I have just leased for the last 3 years. It worked for me. The payments were less than the predicted depreciation. I had sensible mileage allowance and the benefit of a new car with full warranty etc. Plus at a certain point in the lease I could give it back virtually without penalty. However my circumstances have changed somewhat. So I have now just bought a vehicle and like my previous Skoda Superb will probably keep it until it no longer suits my purpose.( I need to tow) Money is cheap at present if you wish to borrow and 2.9 to 3.2% loans are out there. If you have cash then the brokers are good to visit and many dealers are making decent offers. Although I did walk out of several who seemed in cloud cuckoo land concerning the realities of car ownership. They really do think the public are stupid.(maybe quite a few are)But I feel really put out when they try to spin me a line about current sales and future values. I just laughed and walked out, couldn't be bothered to argue the toss, with some callow youth aka Sales Executive!!!
In short, do the deal that suits you and your circumstances, do the sums, and if you are happy at that point, then go ahead.
Cheers Concrete
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Unless you are fortunate enough:
- to have a secure well paid job,
- to have lots of capital behind you,
- to be are at the start of a potentially well rewarded career (doctor, lawyer etc)
- to be close to retirement with good pension provision
I would not recommend it. In fact if you fit any of the above categories you don't need to borrow the money dressed up as a PCP deal anyway.
I fit 2 of the above categories i.e
- Lots of capitol
- Retired with 2 (nearly 3) good pensions
But when I buy my next car if a PCP deal is available with a good manufacturer contribution I will take it and pay off within a few days.
Or better still a 0% deal with a contribution.
A PCP is no better or worse than any other method of buying. But like all borrowing methods it needs paying back, if you don't you are in deep guano.
I know for a fact that if I had never borrowed money to buy goods such as cars, washing mchines, Hi Fi etec etc I would never have been able to leave home. Trying to save is a very grand idea but in truth it never happens.
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When I bought my last car, the Nissan Pulsar
How do you find the Nissan Pulsar - only have a small city car Hyundai i10 at the moment but could do with a larger car and the Pulsar always gets poor reviews which mainly seem to be down to it's look and lack of a fancy badge - not of which bothers me so interested to know what it is like day to day.
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I was just about to ask the same question Alan. 2nd hand hand prices on these vehicles are very attractive and it might be an alternative to the VW/Fords I'm looking at for my next car.
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When I bought my last car, the Nissan Pulsar
How do you find the Nissan Pulsar - only have a small city car Hyundai i10 at the moment but could do with a larger car and the Pulsar always gets poor reviews which mainly seem to be down to it's look and lack of a fancy badge - not of which bothers me so interested to know what it is like day to day.
I bought the Pulsar to replace a 12 year old Focus TDCi which replaced a 10 year old Golf TDi. Retired thus mileage dropped and did not need another diesel but I did want a car that had a bit of go this time.
First thought was another Focus but the 1.6T was stupidly priced and rather bizarrly Ford had managed to meake rear seat space samller and the boot ting compared to the Mk2.
2nd thought was a Gold but wilst definitely better than the Focus the prices were stupid and you coujld only get a "quick" engine in the GTi which was even more stupid.
Dropped on the Pulsar after buying a What Car. They rated it as a 4 blob car and only really marked it down for being boring. Went for a look and I could see why, great space and kit but not inspring to look at, but neither were the Focus and Golf.
Did some research and the advice was the diesel was the best engine (did not want that), the 1.2 DIG-T was OK but did have reliabilty issues on some or the 1.6 DIG-T which was quick, slightly thirsty, reliable but not popular.
Local dealer had loads of 1.2's pre-reg but only new 1.6's. Drove one and liked it but did not like the price. But after about of week of him keep phoning me with a new price every day we got it for about the same price as a 1.2 pre reg, absolutely delighted.
2 years on I still feel the same. Been totally reliable, goes in for its 2nd service in 2 weeks but no extra works needs doing. Pleasure to do 400+ miles in the day. Economy not that bad, hs averaged about 34 mpg (ish).
Will not be keeping it for 12 years though. Plan to swap every 3 years now so it will be on its way this time next year at the latest. Problem is what do I buy?
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When I bought my last car, the Nissan Pulsar
How do you find the Nissan Pulsar - only have a small city car Hyundai i10 at the moment but could do with a larger car and the Pulsar always gets poor reviews which mainly seem to be down to it's look and lack of a fancy badge - not of which bothers me so interested to know what it is like day to day.
Will not be keeping it for 12 years though. Plan to swap every 3 years now so it will be on its way this time next year at the latest. Problem is what do I buy?
Thanks for the info - sounds like an ideal car - will be on the list when ready to replace.
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As a PCP virgin, could you please explain how this works? It's all news to me.
For example, if you buy on PCP, then cancel the deal shortly afterwards, do you only pay the initial deposit and the final payment? Is this how a 19k car only cost 12k OTR?
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“ As a PCP virgin, could you please explain how this works? It's all news to me.“
You defer repayment of a portion of the capital until the end of the deal. For example car costs £20,000 and the guaranteed future value is £7000 in 4yrs then you’re only repaying the £13,000 plus interest on the full amount over the 4yrs. At the end you typically own nothing and the car is returned to the dealer when you take on another never-ending PCP.
The monthly payment is lower but you end up owning nothing plus with used cars the interest rate is almost always higher except when buying a new car on a manufacturer subsidised rate. To compare like for like however you must compare a longer bank loan for example a 3yr PCP v a 5yr bank loan. At the end of both you owe money but with the bank loan it’s simpler to keep the car and you’ll have paid less interest.
“For example, if you buy on PCP, then cancel the deal shortly afterwards, do you only pay the initial deposit and the final payment? Is this how a 19k car only cost 12k OTR?”
You pay the full amount outstanding. Sometimes on a new car there’s a contribution from the manufacturer but that comes off the wholly unrealistic list price. You can hoover up this and then cancel and repay the PCP if your credit is strong enough to weather two large loans being taken out one after the other or you have the savings sitting.
Personally I don’t like PCP’s, they complicate things and introduce a deadline to ownership. They were designed to increase the frequency in which you change your car. To have a situation where you have a never-ending monthly payment. To me a standard low rate bank loan is the best way to buy unless there’s a substantial dealer/manufacturer sweetener which remember comes off the insane list prices. I’d buy used or nearly new at far more realistic prices when the trade have rightly hammered values down and I’d do so with a simple bank loan.
Edited by SLO76 on 13/02/2020 at 13:48
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To me a standard low rate bank loan is the best way to buy unless there’s a substantial dealer/manufacturer sweetener which remember comes off the insane list prices. I’d buy used or nearly new at far more realistic prices when the trade have rightly hammered values down and I’d do so with a simple bank loan.
I agree SLO, and i have made another post explaining the deal I got £4600 off £2500 kia and £2100 from the dealer.
It's not for everyone but it will be (HOPEFULLY) my last new car..
The other bit of news is that My MG dealer have offered me a better price for the car than in december, and want to buy it from me without me buying a car from me.
I have accepted and will be £375 better off too.
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As a PCP virgin, could you please explain how this works? It's all news to me.
For example, if you buy on PCP, then cancel the deal shortly afterwards, do you only pay the initial deposit and the final payment? Is this how a 19k car only cost 12k OTR?
No.
The car was listed at about £18500, add metallic and a 3 year service plan and it came to just over £19000.
Nissan contributed £3000 to the deposit required (think it was 30% max) and the dealer gave us just over £4000 discount which included the service plan.
Thus the amount financed was actually about £12000 less the money we had to cough up to make up the deposit, it was approx £1500.
Thus the total amount financed was approx £10500.
When I phoned up the finance company (RCI Bank) I was given a settlement figure of £? and was told that the figure was fixed for 28 days during and if I did not pay in that time I would have to ask for a new figure.
So the total I paid for the car was the approx £10500 settlement plus the approx £1500 deposit making up the £12000.
It was nothing to do with the final payment, that only applies if you let the PCP run its full term and you decide to keep the car.
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Sounds as though things went well here for thunderbird--but I have heard horror stories of folk who have tried to "pay back" shortly after taking out a PCP deal--everything went wrong-dealers taking a back seat, finance companies not answering e-mails, admin charges......
No thanks
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Sorry to hear of the woe with the MG. I’m no fan but I did believe they’d be reasonably robust being based largely on GM running gear but if yours is typical the firm won’t have a bright future. Depreciation and poor quality will continue to blight them until everyone who’s tried one will never have another.
Sounds as though the Chinese bought not only the name but also the old British Leyland ethos of making cars as cheaply and carelessly as possible. It saddened me to see a marque such as Rover producing one completely new faulty model mutation after another, each indistinguishable from the last apart from its badge, while a brands such as BMW and Peugeot evolved recognisably and successfully through the generations to what they are now.
As for PCPs, I cannot think of a more expensive and inflexible way of keeping a car.
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As for PCPs, I cannot think of a more expensive and inflexible way of keeping a car.
Compared to the mid 70's when I bought my first decent car the rates charged for PCP's (seem to be between 0% and 6%) are peanuts compared to what banks were charging, I paid about 14% I seem to remember. But that was peanuts compared to dealer finance, at the time that was about 30%.
Move on 10 years and since I was on a grade where I got a car allowance I also got low rate car loans, about 6% at the time. When I bought a Golf the dealer asked about finance and I declined telling him I got a low rate at work. A quick phone call and he offered 5.5% through Chartered Trust. A small saving but any saving is worth having.
I will continue to use PCP's when they re available with either a generous contribution or a 0% rate (preferably both). But since I have enough funds to pay cash I personally have no need to pay any interest.
But if I was a younger buyer with no capitol I would be doing my sums (not that difficult) before I said I would never have a PCP. If you are getting £3000 contribution as we did with the Pulsar it would more than cover the approx £2000 interest we would have paid over the 3 years. I accept that cheaper loans are available but not every buyer is able to access them.
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PCP makes the most sense when you can buy a vehicle for less than cash or pre reg
Also makes sense if you don’t want to own the car, keep it serviced, send it to a touch up paint shop the week before the PCP is due up and you’ve had a hassle free experience
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PCP makes the most sense when you can buy a vehicle for less than cash or pre reg
Also makes sense if you don’t want to own the car, keep it serviced, send it to a touch up paint shop the week before the PCP is due up and you’ve had a hassle free experience
Good friend just returned her 2016 Ford C-Max the other day at the end of her PCP, only to be presented with a bill for £1,000 for repairs. I did warn her fella not to fix the minor crash damage on the cheap but now it’ll cost them far more.
Don’t get me wrong, if they’d owned the car you’d still be paying via a lower part exchange valuation but it wouldn’t be £1,000 for some minor paint. I’d think carefully about taking on a lease or a PCP if you can’t keep the car in a safe place and you’re not that interested in looking after it. I am now trying to convince her not to have another new car on a PCP but to let me find a good used motor instead. Then she can dent and ding it to her hearts content.
Edited by SLO76 on 16/02/2020 at 00:55
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Hi SLO67
Your right, your friend would have likely had a bill far less than £1k
Well worth getting the car and any wheels touched up prior to returning it , ignore the fair wear and tear policy they want to be able to offer your car to auction or the trade in near showroom condition to get the best return.
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Hi SLO67
Your right, your friend would have likely had a bill far less than £1k
Well worth getting the car and any wheels touched up prior to returning it , ignore the fair wear and tear policy they want to be able to offer your car to auction or the trade in near showroom condition to get the best return.
She hit them with a sob story and they reduced it to £300, which is pretty much exactly what I told her it would cost to fix properly in the first place. They did ok by her but had she not been fit for them it may have been costly.
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I am in dispute with my lease company over my 60k mileage car that went back at the end of January.
The condition was very good. Not even a mark on the wheels or outside paint work.
There was a small scratch <2mm on the "B" pillar that you couldn't see with the door closed cause by the seat belt buckle. Cost nearly £200 to fix when a touch up tin from the dealer would be £15 and do the job.
The service book had 10k, 20k, 30k service intervals but the manufacturer / dealer set my car to long life service intervals and therefore the car was correctly serviced at 20k, 40k and 60k (actually 18k, 38k and 58k due to not doing so many miles in the first 12 months). The car's computer also counted down from 20k for each service.
The lease company wants £3k for missed services impacting the value of the car!
The dealer has confirmed that the required services are 12 months / 20k which have been complied with.
Edited by Zippy123 on 16/02/2020 at 19:49
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Can you name the lease company?
Some are clearly better than others.
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“ The dealer has confirmed that the required services are 12 months / 20k which have been complied with.”
12mths or 20k whichever comes soonest. So if you’ve waited until 18k and that took say two years then they’re correct and the schedule hasn’t been followed. I’d say £3k is a bit ott but it does mean the car can’t typically be sold to a main dealer as approved used which will hurt its value.
Edited by SLO76 on 17/02/2020 at 00:10
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“ The dealer has confirmed that the required services are 12 months / 20k which have been complied with.” 12mths or 20k whichever comes soonest. So if you’ve waited until 18k and that took say two years then they’re correct and the schedule hasn’t been followed. I’d say £3k is a bit ott but it does mean the car can’t typically be sold to a main dealer as approved used which will hurt its value.
First service at 12 months / 18k.
Second service at 24 months / 38k
Third service at 35 months / 58k
All done to schedule.
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