Ownership method
- Thread starter Popeye_ali
- Start date
Indeed I have been to Ayr a couple of times in her. And I'll be taking less of your lip ;-)
No such thing as 0% finance guys, interest it just built into the price of the car.
For me I never have kept a car longer than 5 years. I like trouble free motoring so prefer to keep a car in warrante.
So contract hire is for me the best way to go. I personally don't like the idea of owning a constantly deprecating asset!
Obviously if you happy to drive the same car for 10years that's a different matter
Used a broker to get the right price on 1.4 FR ST, 0% up over three years, car will probably worth about £10k after three years so better than £250 ish per month for 36 + 3 or one and a half lots of 24 + 3
I've kept mine from new for 13 years, 10 and 12 years counting. 130,000 miles, 100,000 and 90,000. I got two degrees in mathematics and consider that I know what I'm doing, Obviously those that keep buying new cars or changing via whatever means have the thrill of owning something new at a cost. Then there are those that buy secondhand that have the thrill of the bargain and buying something that may have an unknown issue.
I can't say myself that the cars I've owned really got unreliable with age or really that expensive until you get to the point of a failure or fancy something new. Dealers wiggle out of warranty where they can. The depreciation cost is going to be built into those PCP deals in one way or another. Be interesting to correlate those people that use PCP and also rent a property, living for the here and now but not having the security of ownership to tide you over any rough patches where income and expenditure are out of balance. A lot to be said for ownership.
It's an interesting consumer subject.
I can't say myself that the cars I've owned really got unreliable with age or really that expensive until you get to the point of a failure or fancy something new. Dealers wiggle out of warranty where they can. The depreciation cost is going to be built into those PCP deals in one way or another. Be interesting to correlate those people that use PCP and also rent a property, living for the here and now but not having the security of ownership to tide you over any rough patches where income and expenditure are out of balance. A lot to be said for ownership.
It's an interesting consumer subject.
I don't think you can compare PCP/leasing to renting of property. On the whole property is a appreciating asset, not a constantly depreciating one like vehicles.
I own property and could own the vehicles I drive but choose not to for a few factors.
1. Trouble free motoring
2. Maintenance quite often included
3. AA/Rac included
4. Ever improving fuel economy with new vehicles
5. Ever improving vehicle safety.
6. Tax included
I agree if you are prepaired to drive the same vehicle for the next 10 years then ownership is best.
I also don't understand that 90% of people that do PCP never pay the final balloon and claim ownership at the end of the term.
PCP you require larger deposits and larger monthly payments over leasing and the chances of any equity at the end of the term is always minimal.
End of the day unfortunately what ever why you do things with vehicles you lose money.
I can see the benefits of pcp but it's certainly not the cheapest way of doing things. You are after all paying for the depreciation of the car and then the interest on top of that....probably why the dealers love it as your covering their costs and paying a bit on top.
I believe that pcp will always cost you more than depreciation. If it didn't then it wouldn't make financial sense for the dealer and they wouldn't offer it.
I believe that pcp will always cost you more than depreciation. If it didn't then it wouldn't make financial sense for the dealer and they wouldn't offer it.
The Seat guy at the fleet world event had a rosy view of PCP which I thought wasn't just down to an unbiased view. Mixed up in all of this is those people that want to change their cars regularly and those that are happy. I've always had the view buy them new with cash or zero lone if it's some special deal then drive them until they drop. Can't be having the hassle of changing them every few years for no good reason. So cash is king for me.
Always use pcp over a bank loan as long as rate is decent, if you have a major fault like I had recently you have more rights with finance than a bank loan or cash purchase. On the flip side I never ever buy brand new as at end of a pcp from brand new the final payment is well over inflated
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Talking about depreciation. While sorting out my car insurance renewal, my car has apparently lost £10k in less than 12 months of ownership. I appreciate the figures are not accurate as no account taken of condition or mileage but from my perspective leasing my Leon and changing vehicle every 3 years leasing could well work out far cheaper than outright purchase at the outset.
0% HP on mine as well. At broker price with the HP discount it worked out only £2k more expensive for brand new vs. the rather manky 3-year old "approved" used ones the dealers were trying to sell with kerbed wheels, ripped interior etc
Buying it new also meant I got the newer nav system and Full Link, which makes a big difference for my needs
Intend to keep it long-term so works for me, after 3 years I'll put it on extended warranty I reckon.
Interestingly DriveTheDeal mention there's a 0% PCP option which is interesting, you have to offset that against lower discount on the car price though so swings and roundabouts to some extent.
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Ditto, I learned a similar lesson myself and now I won't take out finance on a car. It's cash or cash + trade-in for me now.
If you can afford £200, £300 or more a month on a loan, you can afford to save that amount per month for a few years & have cash in the bank to do a deal on a decent car while driving round in a £1000 - £1500 'bangernomics' car in the meantime.
Loans for cars are a mugs game, especially for a depreciating asset when you could end up in negative equity.
That was my original plan but with the 0% offer it makes more sense to leave the money I saved in savings building interest while letting SEAT cover the HP costs for me
![[B)]](/forums/styles/seatcupra/oldforumsmileys/shades.gif "Cool [B)]")
That was my original plan but with the 0% offer it makes more sense to leave the money I saved in savings building interest while letting SEAT cover the HP costs for me
Remember, there is no such thing as a 'free lunch'.
If a car is offered on 0% finance, all the dealer has done is charged interest on the car over the advertised finance period and added this onto the screen price of the car.
There is no point sitting with 'say' £5k in the bank earning you 0.01% interest at today's rates, when you've been charged circa 5% APR on the finance or the screen price of the car has been inflated in price by an amount to cover the interest.
Remember, there is no such thing as a 'free lunch'.
If a car is offered on 0% finance, all the dealer has done is charged interest on the car over the advertised finance period and added this onto the screen price of the car.
There is no point sitting with 'say' £5k in the bank earning you 0.01% interest at today's rates, when you've been charged circa 5% APR on the finance or the screen price of the car has been inflated in price by an amount to cover the interest.
Doing better than that on my savings as I don't use banks for anything apart from current account to get use of ATMs and direct debit and in fact that's with a building society too
Price would've been the same (actually worse) buying cash. Dealer wasn't getting anywhere near DTD price and without the HP the price actually ends up higher (add £1k on website price). For the exact same car, literally down to the fact both described where it was sitting the difference was over £4k (!) Tried multiple dealers and all came back with the same £21k quote give or take £100-200, DTD £17k... sold!
When collecting the car the dealer told me SEAT were doing this to get more cars on the road and increase market share, hence putting so many through DTD and similar sites where there's very little (if any) profit margin on each car sold.
Buying on finance wasn't something I've ever been that keen on, always paid cash in the past but this time round it really did seem to be more cost-effective which I'll admit is a bit bizarre.
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Doing better than that on my savings as I don't use banks for anything apart from current account to get use of ATMs and direct debit and in fact that's with a building society too
Price would've been the same (actually worse) buying cash. Dealer wasn't getting anywhere near DTD price and without the HP the price actually ends up higher (add £1k on website price). For the exact same car, literally down to the fact both described where it was sitting the difference was over £4k (!) Tried multiple dealers and all came back with the same £21k quote give or take £100-200, DTD £17k... sold!
When collecting the car the dealer told me SEAT were doing this to get more cars on the road and increase market share, hence putting so many through DTD and similar sites where there's very little (if any) profit margin on each car sold.
Buying on finance wasn't something I've ever been that keen on, always paid cash in the past but this time round it really did seem to be more cost-effective which I'll admit is a bit bizarre.
I'm with you on this, still getting over 2% on my ISA and 3 - 5% on my various current accounts (Sant, Tesco, TSB etc) while I pay 0% on my finance deal and the dealer trade in was great too.
Bought my car with PCP 0% finance over 36months, no arrangement or settlement fee and saved over £3k on brochure price. If I want to keep it at the end I just pay the outstanding amount. It's a no brainer as far as I'm concerned.
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