Which PCP deal is best?

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Fri 10 Feb 2023 10:54
Which PCP deal is best? - LukeS
Hi,

We’re looking to purchase a new car (Renault Arkana) via PCP and the dealer are offering 2 different deals.

Deal 1:
£3500 deposit followed by 47 monthly payments of £321 and an optional balloon payment of £14,746. This is based on an APR of 6.4%

Option 2:
£3500 deposit followed by 23 monthly payments of £334 and an optional balloon payment of £19,055. This is based on 0% APR

I can’t for the life of me work out whether we’d be better off taking 0% over 2 years, or 6.4% over 4 years. If we took the 2 years at 0% we would then look to take another car in 2 years as we don’t intend on paying the balloon payment for either deal.

I know it sounds obvious that 0% would be better as it means no interest is paid, but I can’t seem to get my brain to understand the savings over the 4 year period. I’m thinking this may be due to the fact that the initial depreciation of the car is the greatest, and by taking 2 new cars over the 4 years we’d be subject to twice this greater depreciation.

I’m hoping someone with a knowledge of car PCP or a greater logical brain than me can help ??
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Fri 10 Feb 2023 11:17
Which PCP deal is best? - RT

Keep it simple - for £13/month (334-321) you can have a new car after 2 years instead of waiting for 4 years - but the 2nd car will probably cost more - so the 4 year deal is less cost over 4 years.

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Fri 10 Feb 2023 11:57
Which PCP deal is best? - Falkirk Bairn

Not quite so simple as £13 per month!!!!

Deal 1 is £321 + £3500/48 = £393 per month

Deal 2 is £344 + £3500/24 = £480 per month

£87 per month difference

Are you sure you want to fork out £400-£500 per month ?

Arkanas with little mileage can be had from £24K upwards - Sainsbury's 4.9%

HP over 5 years is mid to high £400 but at least after 5 year you would have some value in the car.

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Fri 10 Feb 2023 12:09
Which PCP deal is best? - movilogo

In general, 0% APR is better because you are not paying extra for borrowing money.

What works better for your personal circumstances that's only you can answer.

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Fri 10 Feb 2023 13:09
Which PCP deal is best? - Adampr

If you want to know which is best value, just add all of the figures up:

Option 1; £33,333 total

Option 2; £30,237 total.

So option 2 is clearly better.

Obviously, no-one ever pays the balloon payment so it's all a bit immaterial.

If you plan to keep the car for four years, the lower monthly payment on the four year term is better, if you don't or you're not sure the 2 year is better.

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Fri 10 Feb 2023 13:09
Which PCP deal is best? - Adampr

If you want to know which is best value, just add all of the figures up:

Option 1; £33,333 total

Option 2; £30,237 total.

So option 2 is clearly better.

Obviously, no-one ever pays the balloon payment so it's all a bit immaterial.

If you plan to keep the car for four years, the lower monthly payment on the four year term is better, if you don't or you're not sure the 2 year is better.

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Fri 10 Feb 2023 15:00
Which PCP deal is best? - pd

It's not true on the balloon payment. Most do pay it because the idea is any equity pays for the deposit on the next one.

Anyone who just handed a car back in last 2 years would have been mad as in most cases the balloon payments way underestimated the value.

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Fri 10 Feb 2023 15:32
Which PCP deal is best? - Adampr

It's not true on the balloon payment. Most do pay it because the idea is any equity pays for the deposit on the next one.

Anyone who just handed a car back in last 2 years would have been mad as in most cases the balloon payments way underestimated the value.

I agree on your second point, but you get the equity whether you pay the balloon payment or not.

Edit to add:. I mean if you buy a new car. Obviously, if you hand it back and don't buy another, they keep the equity.

Edited by Adampr on 10/02/2023 at 15:33

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Fri 10 Feb 2023 16:13
Which PCP deal is best? - FoxyJukebox
Call me old fashioned but surely the cheapest way of getting a car is to pay cash?
If that’s not possible, then something half decent from the used car market financed by a manageable bank loan.
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Fri 10 Feb 2023 16:44
Which PCP deal is best? - Adampr

Not necessarily. You get smaller discounts, no deposit contribution, no service plans etc paying with cash. If your PCP term is the same or equal to the warranty you never have to pay for repairs either.

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Fri 10 Feb 2023 16:55
Which PCP deal is best? - Lee Power
Call me old fashioned but surely the cheapest way of getting a car is to pay cash? If that’s not possible, then something half decent from the used car market financed by a manageable bank loan.

There was no discount for an outright cash purchase when I bought my last car as demand was out stripping supply.

Deposit contribution & 0% finance over 3 years where available at time which suited me.

My CBP is tucked away safely currently working for me earning interest.

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Fri 10 Feb 2023 18:29
Which PCP deal is best? - FoxyJukebox
The used Audi A3 I saved up for and bought lasted 11years plus of course standard servicing and maintenance. Yes-it was a largish initial outlay but I got a totally fair WBAC when changing up and didn’t owe anybody anything.
I call it DOA deal.
Don’t Owe Anybody
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Fri 10 Feb 2023 17:07
Which PCP deal is best? - maz64

Apologies if this is a daft question but how about leasing? Don't know which variant you're going for, or mileage, but based on total lease cost, a 2 year deal starts at £8k (£2251 + 23 x £250), and a 4 year at £13.8k (£2218 + 47 x £246). That's only 5k miles p/a; easy to change your criteria,

24: leasing.com/car-leasing/renault/arkana/estate/?ter...l

48: leasing.com/car-leasing/renault/arkana/estate/?ter...l

Edited by maz64 on 10/02/2023 at 17:07

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Sun 12 Feb 2023 17:24
Which PCP deal is best? - maz64

...or how about this - a Peugeot 2008 in decent GT 130 trim, albeit with the EAT8 auto box which might not be your thing. But 3 years for £10.1k (£2067 + 35 x £230) including maintenance seems pretty good.

Edited by maz64 on 12/02/2023 at 17:33

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Mon 13 Feb 2023 11:17
Which PCP deal is best? - Falkirk Bairn

Drive the Deal

Arkana Hybrid 15% off list at under £28K - you have to take Renault Finance - yiou would need to see how competitive or NOT the APR i!!!s

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Tue 14 Feb 2023 08:07
Which PCP deal is best? - NAthan smith
Hi
I would stick with the 0% options a no interest. Also the Ariana is likely to drop significantly in value so this might be worth considering after 2 years as most of your £3500 deposit may be gone!
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