Car purchase methods

[The Squirrel]

Of course PCP is cheaper in terms of monthly payment. You’re not actually building equity within the car, just paying the cost of depreciation.

Your end position is that you own zero value of the car - want a car at the end and you have to buy one full cost (even for the one you’ve been paying for for years), while the end point of a loan is that you own 100% of any value the car has - you have a car, your car, to keep for as long as you wish.

Anyone saying PCP is “cheaper” just because they've compared it to a loan and concluded that the monthly payments are lower is proof that PCP is working in it’s designed role: obfuscating the fact that you never own a car and are never moving towards owning one despite the monthly payments - makes it seem like you’ve bought and own a car but in reality you own nothing.

You’re trapped on the dealer payment treadmill forever - just like they want.

I go back to my statement on financial product complexity…

 

[Reemul]

The wife and I normally buy a 2 or 3 year old low mileage car and keep them for 10 years, we borrow for 4 years and thhn have 6 years of no payments. We are in our 50's and have always done this. Never own expensive cars, My wife and I have had a few Ford's and a few Peugeots. In that time we have had 1 stinker of a car the rest have been fine, nothing major re repairs either.

Paying £300 or £400 a month plus putting down £4k+ every 3 years to own something that spends 22 hours a day sat outside in no way feels like any sort of deal or bargain.

Currently I have a Ford Focus 13 plate 80,000 miles and it's not far off needing replacing due to general wear and tear.

Also we don't look after our cars liek they are thr crown jewels, they are crammed with multiple golf clubs, fishing gear, beach stuff, sand all summer long, kids stuff and so on, they get dinged, dirty and worn. They are just a useful tool and certainly not a status symbol of any sort

 

[Orikoru]

Of course PCP is cheaper in terms of monthly payment. You’re not actually building equity within the car, just paying the cost of depreciation.

Your end position is that you own zero value of the car - want a car at the end and you have to buy one full cost (even for the one you’ve been paying for for years), while the end point of a loan is that you own 100% of any value the car has - you have a car, your car, to keep for as long as you wish.

Anyone saying PCP is “cheaper” just because they've compared it to a loan and concluded that the monthly payments are lower is proof that PCP is working in it’s designed role: obfuscating the fact that you never own a car and are never moving towards owning one despite the monthly payments - makes it seem like you’ve bought and own a car but in reality you own nothing.

You’re trapped on the dealer payment treadmill forever - just like they want.

I go back to my statement on financial product complexity…

The way my wife has gone through cars we're better off not owning one. Every single one has been towed to the scrapheap when she's finished with it.

 

[PNWokingham]

bought a new car a new way on Friday evening - very unplanned - was in the pub and started up bidding on a 15y old BMW 640 convertibe on Piston Heads auctions!! Picked it up yesterday from Rugby and very happy as looks in better condition and provenance than i expected. Now got to decide who remaps it!

 

[Taz]

bought a new car a new way on Friday evening - very unplanned - was in the pub and started up bidding on a 15y old BMW 840 convertibe on Piston Heads auctions!! Picked it up yesterday from Rugby and very happy as looks in better condition and provenance than i expected. Now got to decide who remaps it!

is the remap to make it more economical given the current crisis

 

[larmen]

I don’t get PCP either. The argument is that ‘you only pay for depreciation’, but if the 1st few years are the hardest one on that. Then you are only ever getting the bad bits of a contract?

 

[KenL]

I don’t get PCP either. The argument is that ‘you only pay for depreciation’, but if the 1st few years are the hardest one on that. Then you are only ever getting the bad bits of a contract?

PCP can have some advantages in that you can have quite a bit of equity left at the end of (or part way through) the deal.

It can also offer protection against negative equity. I had an Audi A3 on pcp. It was worth about £2000 less than to cost to buy it at the end of the deal. So, in theory, the pcp actually saved me money as the amount I had paid was less than the depreciation.

 

[GreiginFife]

bought a new car a new way on Friday evening - very unplanned - was in the pub and started up bidding on a 15y old BMW 840 convertibe on Piston Heads auctions!! Picked it up yesterday from Rugby and very happy as looks in better condition and provenance than i expected. Now got to decide who remaps it!

840 at 15 years old? Surely that’s a 6er considering the 8 went out of production in 1999 until 2018.

 

[Bunkermagnet]

I don’t get PCP either. The argument is that ‘you only pay for depreciation’, but if the 1st few years are the hardest one on that. Then you are only ever getting the bad bits of a contract?

Buying a car via a PCP has been cheaper (total cost) than straight HP for the last 3 cars I have bought.
If you're lucky enough to have the whole amount, rather than pay it out in one go, to buy the car via a zero %PCP and put the remainder of the monies in an interest paying account would mean you would have more than you started when you come to the final balloon payment....so you have made money

 

[SwingsitlikeHogan]

Our most recent purchase was cash plus 0% manufacturer loan. Always been some form of PCP or whatever in the past, But as we intend to keep this one for a-long-time we weren't bothered about depreciation and resale value.

 

[Bunkermagnet]

Of course PCP is cheaper in terms of monthly payment. You’re not actually building equity within the car, just paying the cost of depreciation.

Your end position is that you own zero value of the car - want a car at the end and you have to buy one full cost (even for the one you’ve been paying for for years), while the end point of a loan is that you own 100% of any value the car has - you have a car, your car, to keep for as long as you wish.

Anyone saying PCP is “cheaper” just because they've compared it to a loan and concluded that the monthly payments are lower is proof that PCP is working in it’s designed role: obfuscating the fact that you never own a car and are never moving towards owning one despite the monthly payments - makes it seem like you’ve bought and own a car but in reality you own nothing.

You’re trapped on the dealer payment treadmill forever - just like they want.

I go back to my statement on financial product complexity…

It's not hard to look at the final total figures, adding up how much the car is plus interest paid as they always tell you now.
I wouldn't say it's complex, but people are often lazy and don't look even when it's there in black and white in front of them.

 

[Fade and Die]

My lease is up in August and I was thinking of getting another leased car but as I intend to retire in 3 years I’m probably going to buy a 2/3 year old Volvo xc60 with cash deposit and a bank loan, repay it in 3 years.

Edit: I see that the Mercedes GLC AMG and the Audi Q5 S Line is also in my budget, never had either brand so a few test drives are in order.

 

[PNWokingham]

840 at 15 years old? Surely that’s a 6er considering the 8 went out of production in 1999 until 2018.

yes. Good point. Typo

 

[PNWokingham]

is the remap to make it more economical given the current crisis

I am not bothered on economy but remaps should give more power and economy as the 30% or so increase in torque improves economy as you use less power in normal driving.

 

[Voyager EMH]

I don’t get PCP either. The argument is that ‘you only pay for depreciation’, but if the 1st few years are the hardest one on that. Then you are only ever getting the bad bits of a contract?

This has been why I've only ever bought second hand cars. Usually look for 2-to-3 years old with lowish mileage. Worst part of depreciation is over giving best value for the buyer.
Also look for "untrendy" cars for best value.
Current car bought in 2016 was a 3 year old Skoda Rapid 1.2 with 7,700 miles. Owner had died and it took son over 18 months to sell.
£30 tax, lowish insurance, good mpg and massive boot.
Might start looking to replace it later this year.
I am very pleased with what the 10-year cost has proved to be.

 

[KenL]

I am not bothered on economy but remaps should give more power and economy as the 30% or so increase in torque improves economy as you use less power in normal driving.

I never understand why remappers claim better fuel economy when they increase power and torque.
Why don’t the car manufacturers build this economy into the cars in the first place?

 

[PNWokingham]

I never understand why remappers claim better fuel economy when they increase power and torque.
Why don’t the car manufacturers build this economy into the cars in the first place?

they prefer to be ultra safe and deal with the lowest standards of fuel etc globally - that is the reason i have heard many times. I have had a few mapped BMW turbo diesels before and the difference was staggering

 

[GreiginFife]

I never understand why remappers claim better fuel economy when they increase power and torque.
Why don’t the car manufacturers build this economy into the cars in the first place?

The remap effectively alters the ECU to optimise air/fuel/boost ratios. This, as you point out, increases power and torque. The torque part is the important one as you can change gear faster with that increased torque.

Sure, if you use all of the available power (remember power figures are often quoted at quite high revs and would need to be sustained) then it’s going to drink fuel. But if you remap and then drive sensibly, you will see improvements in consumption.

The why as to manufacturers is complex. As Paul says, fuel qualities differ the world over. But cars will often come with different engine tunes based on location (for example, I have a M235 which is a 2.0 turbo producing 300BHP, the US version is 320BHP), the reason for that, predominantly, is emission regulation in those territories. We, and the EU, have some of the strictest emission levels in the world and so manufacturers need to spec the engine tunes for fuel quality AND emission rules, and that narrows the options they have.

 

[Aztecs27]

Of course PCP is cheaper in terms of monthly payment. You’re not actually building equity within the car, just paying the cost of depreciation.

Your end position is that you own zero value of the car - want a car at the end and you have to buy one full cost (even for the one you’ve been paying for for years), while the end point of a loan is that you own 100% of any value the car has - you have a car, your car, to keep for as long as you wish.

Anyone saying PCP is “cheaper” just because they've compared it to a loan and concluded that the monthly payments are lower is proof that PCP is working in it’s designed role: obfuscating the fact that you never own a car and are never moving towards owning one despite the monthly payments - makes it seem like you’ve bought and own a car but in reality you own nothing.

You’re trapped on the dealer payment treadmill forever - just like they want.

I go back to my statement on financial product complexity…

Whilst I get this - there's absolutely no benefit in owning a car. They don't appreciate like a house (typically) does. So a "rental" type scheme, like that of a PCP or a lease is much more beneficial to know that I'm driving something new, is less likely to go wrong due to wear and tear, will be fixed under warranty for any issues relating to that and typically safer than an older car.

Unless you're investing in a classic car, all cars will depreciate in value. So set a budget you can afford a month and get the car you want within that budget....you can get a loan and do the same kind of thing of course, but typically the interest rates aren't as favourable.

We have a Skoda Kodiaq on PCP (our second one, because they're ace) as our "big" family car. We need a big car because we have two kids, two dogs and all the stuff that comes with them...Most big SUV type cars are not cheap, even 2nd hand. I have the peace of mind knowing that my wife can take the kids to and from school and get to where she needs to be and she's in a car that's been reliable (touch wood haha) and is safe.

I drive a 2014 Skoda Rapid, which we bought cash in 2022 out of necessity of needing 2 cars. It's done over 100k now and is absolutely battered, the poor thing...but I'll run it into the ground, unless I win some money on the lottery so I can buy an Alpine A290, Renault 5e or an older Renault Clio Sport 182 as my runaround

So I get the argument for both sides of the coin, but I think you have to look at the circumstances and needs of the individual rather than "PCP BAD, CASH GOOD"

We stepped away from a PCP treadmill before getting our Skoda (after driving 2 Lexus NX's - thanks to some favourable rates because my dad worked for them) - and we bought a 2nd hand Nissan X-Trail with a loan instead. It was only 2-3 years old...but it was the worst car we ever bought. spent hundreds, if not thousands on fixing issues not covered under warranty and ended up trading it in (at a cost to us) to get our first Skoda Kodiaq because of how bad it was. Best decision we've ever made.

 

[Reemul]

Whilst I get this - there's absolutely no benefit in owning a car. They don't appreciate like a house (typically) does. So a "rental" type scheme, like that of a PCP or a lease is much more beneficial to know that I'm driving something new, is less likely to go wrong due to wear and tear, will be fixed under warranty for any issues relating to that and typically safer than an older car.

Unless you're investing in a classic car, all cars will depreciate in value. So set a budget you can afford a month and get the car you want within that budget....you can get a loan and do the same kind of thing of course, but typically the interest rates aren't as favourable.

We have a Skoda Kodiaq on PCP (our second one, because they're ace) as our "big" family car. We need a big car because we have two kids, two dogs and all the stuff that comes with them...Most big SUV type cars are not cheap, even 2nd hand. I have the peace of mind knowing that my wife can take the kids to and from school and get to where she needs to be and she's in a car that's been reliable (touch wood haha) and is safe.

I drive a 2014 Skoda Rapid, which we bought cash in 2022 out of necessity of needing 2 cars. It's done over 100k now and is absolutely battered, the poor thing...but I'll run it into the ground, unless I win some money on the lottery so I can buy an Alpine A290, Renault 5e or an older Renault Clio Sport 182 as my runaround

So I get the argument for both sides of the coin, but I think you have to look at the circumstances and needs of the individual rather than "PCP BAD, CASH GOOD"

We stepped away from a PCP treadmill before getting our Skoda (after driving 2 Lexus NX's - thanks to some favourable rates because my dad worked for them) - and we bought a 2nd hand Nissan X-Trail with a loan instead. It was only 2-3 years old...but it was the worst car we ever bought. spent hundreds, if not thousands on fixing issues not covered under warranty and ended up trading it in (at a cost to us) to get our first Skoda Kodiaq because of how bad it was. Best decision we've ever made.

The problem is you are judging your experience on buying a poor car.

The reality is buying a mid value car, paying it off and keeping it for an extra 6 years+ is cheaper than paying an on going loan of any sort continually regardless of servicing and repair costs.

The fact is a large number of people see a car as status symbol, need a specific badge (RR, BMW, AUDI as examples) and need a new one every 3 or 4 years when in reality there is no need all these 3 and 4 year old cars will last another 10 years no problem with minimum costs and no loan needed or pcp payments just service them and deal with issues as they arise. The amount of money saved would be significant. The saved money can be used to save towards property, invertment or retirement but nope, 3 years up need a replacement. Additionally for many they cannot now aford to buy the car outright and instead return it and start the treadmill over again, one they will never get off.

I mean if you pcp your first car at 21 at £250 a month for 3 years, then upgrade to £300 for 3 years and then move to £400 for 10 more, then 25 years at £450 and 8 years at £300 that would take you to 70 years old and a total cost of £223,500 and of course for most there will be 2 of you in that relationship - That turns in to £447,000 for never owning anything.

So my wife and I are 55 and 51, bought our first car when my wife was 18 and I was 22, in total we have spent £60,000 on cars and motobikes in the 34 years we have been together, even with servicing and parts on top[ of that it does not feel like a lot of money. Recently my wife got made a headteacher and treated herself to a 2 year old car at a cost of £20k included in that £60k total. Personally it was £8k more than i would have spent.

People waste a fortune on metal object that generally spend 22 hours a day sat outside at work or where you live. I just feel that money can be better spent and for the younger generation the cost of owning a house and bringing up a family is so high who needs to be spening a fortune on something you neever own when there are far cheaper options.