Thanks. I am definitely doing the maths though paying off with my own funds isn't going to be possible and I guess that's the reason do PCP's/leases in the first place right - so you pay a lower amount to be a newer car more regularly on the understanding that you'll never own it?

I have always bought cars outright and my logic is that whichever way you do it then you lose out. It's just a case of minimising that loss.

Edited by daveyjp on 25/02/2020 at 10:40

With a PCP I am not sure where you are getting your maths from as the cost is £400 x 36 = £14400 (Audi put the deposit in) which equates to £4800/year cost to me ignoring tax and servicing etc.

I have owned my car for 1 year (bought it a year old) and it's now worth £4800 less than when I bought it. That depreciation may slow down over the ensuing 2 years of potential ownership but the 'losses' as opposed to the 'expenses' over the period of ownership are broadly the same.So in reality you are either losing or paying broadly the same amount but I'd be driving a new car every 3 years - something I could not otherwise afford to do.

Undoubtedly could get an A4 or similar for less but I need an SUV. They seem to always be more expensive.

The thought of shelling out £22,700 over 4yrs on a car and then having absolutely nothing to show for it at the other end horrifies me.

My thoughts exactly. I too like big fast comfortable cars but I like value for money as well. It's always cheaper to buy them at least four years old with saved up cash. E.g. in 2003 I bought an Audi A6 2.8 for £8000, and in 2014 sold it for £800 and bought an Audi A8 for £12,000. Seventeen years, <£20,000, no major repairs. The A8 (12 cylinder sport quattro) is still mine, is still great to drive and is still worth a few thousand. So that's less than £1000 a year, or £90 a month unless it goes bang tomorrow - but even if it does I think I will still have had my moneys worth. PCP = Lease = No-no!

My understanding is the car is never yours with a PCP.

Does this mean you are immune to this Car Owner virus I keep hearing about?

If you have the money you are at liberty to do whatever you want. You need no justification for buying a large fast car if that is what gives you pleasure. As a rational piece of behaviour it leaves a lot to be desired.

The growth in PCP and lease deals is to help dealers sell more cars to people who can't afford to buy outright. They are in the business of making money, not doing you favours.

Using a monthly cost somehow convinces the punter that it really isn't very expensive - £400 a month, no problem. Nothing to show for it after 3 years - but I can just start another contract with a new car.

But if you want a deal - buy a pre-reg for 25-30% discount or a one year old at 50%. Keep it for as long as it meets your needs - say 6 years. Cost each year for an entirely adequate 4/5 seat hatch at a list of £24k will be around £2k pa not £5k on a lease.

£3k a year after tax is not trivial to most - over 6 years of Ford Focus (or similar) ownership it will pay for a new kitchen, bathroom (or two), or a small extension. Or with tax relief (this may not last) you could increase your pension pot by about £25k

But if you want a deal - buy a pre-reg for 25-30% discount or a one year old at 50%.

That certainly works for some cars but not all. When we bought the Pulsar it was brand new (not pre-reg) and discounted after negotiation from £19000 to £12000, that is 37%. The Focus that we had before that was brand new (not pre-reg) and was discounted form £17000 to £12000, a measly 30%.

But the cars we are looking at now are simply not available in such huge volumes to make huge discounts realistic. A quick look on the internet shows no pre-reg examples. Year old ones tend to be ex dealer stock loaded with up to £10,000 worth of extras and these are more expensive than a new basic one.

But the good news is after 3 years it is likely to retain a larger amount of its value than cars that were heavily discounted from new (provided you don't go mad with the options).

Big discounts are great but so is buying a car that you really like and actually want.

People today do not realise just how lucky they are compared to what we had in the early 70's. When I bought my first "decent" car I borrowed £500 from the bank with dad as a guarantor. The interest rate was about 14%. If I had used dealer finance I would have been paying nearer 30%

Yet people on here think they are being robbed when a PCP has a rate of 6% (that is the highest I have seen advertised) and many are lower.

I appreciate there are many ways of borrowing money at stupidly high interest rates but a PCP is not one of them.

But as I said above look around and there may well be a lower rate but taking that rate could loose you several thousands in manufacturers contributions. But if you can get a lower rate (or have the cash), have the PCP, grab the contribution and pay off in 14 days then you are quids in.