fn2 civic type-r gt
Continuation from IRC: Under what circumstance would you PCP?
- Thread starter Jez
- Start date
fn2 civic type-r gt
Does it really matter whether or not you "own" the car? Unless you plan to modify the car the owning it outright offers no real benefit compared to a PCP/Lease.
Obviously if you have the cash available either from savings or through an equity release on a property, buying outright usually works out quite a bit cheaper and it would usually be a better option that a PCP. Not everyone is in such a position to be able to do that.
Take me for example. I'm young, don't own a property and without wishing to blow my own trumpet I have a considerable amount of disposable income for my age. I wanted a Z4 Coupe more than any other car. At the time of ordering/buying I had two options. The first option was to buy new or used on a PCP deal. Put down a deposit, pay a fixed sum each month and then either hand the car back and walk away at the end of the term or stump up the final balloon payment if I want to keep the car.
The second option was to get a bank loan for the full amount. There was a problem there though. The cheapest car with the spec that I wanted at the time was about £26-28k. No bank is going to give a 22 year old an unsecured loan for that amount so that option was unavailable.
I had to choose the first option of a PCP. The next decision was to go for a new or a used car. After spending many hours at the dealership getting quotes for various new and used examples, it became apparent that the used cars weren't that much cheaper than a new car. Whether this is true or not of all cars I don't know but it certainly was the case for the Z4C at the time. I deliberated over it for weeks and finally decided to go new. It was going to be more expensive, to the tune of about £80 a month if I remember correctly but I considered it to be worth it. Either way I was going to be technically "renting" a car so I might as well go for the brand new one and frankly £80 a month isn't that big of a deal to me.
Yes, I'm ****ing money up the wall but there's no other way I could be driving the car I am now unless I waited and saved for a couple of years. I'm under no delusion about how much it is costing me. I'm not lucky enough to have rich parents to give me loans or to own a property portfolio but one thing I do have is a set amount of disposeable income each month which I can spend as I choose.
PCP works for people like me but I agree that there are much better and cheaper ways of financing a car if you have the means to do so.
Obviously if you have the cash available either from savings or through an equity release on a property, buying outright usually works out quite a bit cheaper and it would usually be a better option that a PCP. Not everyone is in such a position to be able to do that.
Take me for example. I'm young, don't own a property and without wishing to blow my own trumpet I have a considerable amount of disposable income for my age. I wanted a Z4 Coupe more than any other car. At the time of ordering/buying I had two options. The first option was to buy new or used on a PCP deal. Put down a deposit, pay a fixed sum each month and then either hand the car back and walk away at the end of the term or stump up the final balloon payment if I want to keep the car.
The second option was to get a bank loan for the full amount. There was a problem there though. The cheapest car with the spec that I wanted at the time was about £26-28k. No bank is going to give a 22 year old an unsecured loan for that amount so that option was unavailable.
I had to choose the first option of a PCP. The next decision was to go for a new or a used car. After spending many hours at the dealership getting quotes for various new and used examples, it became apparent that the used cars weren't that much cheaper than a new car. Whether this is true or not of all cars I don't know but it certainly was the case for the Z4C at the time. I deliberated over it for weeks and finally decided to go new. It was going to be more expensive, to the tune of about £80 a month if I remember correctly but I considered it to be worth it. Either way I was going to be technically "renting" a car so I might as well go for the brand new one and frankly £80 a month isn't that big of a deal to me.
Yes, I'm ****ing money up the wall but there's no other way I could be driving the car I am now unless I waited and saved for a couple of years. I'm under no delusion about how much it is costing me. I'm not lucky enough to have rich parents to give me loans or to own a property portfolio but one thing I do have is a set amount of disposeable income each month which I can spend as I choose.
PCP works for people like me but I agree that there are much better and cheaper ways of financing a car if you have the means to do so.
Peoples views on the merits of financing the purchase of a car will change when they grow up, leave the warmth of mum and dad's, get some serious financial commitments and realise that the £10K cash they currently feel happy spunking on a car ends up being spent on stuff like beds, chairs, tables, cupboards, curtains, carpets and other stuff that has a habit of munching through your lovely cash. We can all be the best financial advisors in the world when we have not REAL financial outgoings and as you will find out, school fees are akin to the weekly shop when you have a family. For many people on here your priorities and outlook WILL change, mark Housey's wise words and that “I only buy cars for cash” will change when you realise that the cash is reducing and the prices are increasing.
Been there, seen it, done it, printed the T-Shirts, made some profit, bought a Porsche.
Been there, seen it, done it, printed the T-Shirts, made some profit, bought a Porsche.
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
The problem with PCP is you pay all this money and then, at the end of the 3rd year, unless you've got the GFV available the car dissapears. It's a long term rental and nothing more - if thats convenient to you then great but dont be under the illustion its anything more than a long term hire car.
[TW]Fox;13392278 said:
So you keep saying. I made perfectly clear in my post that I was under no illlusion about the circumstances yet you have to reiterate it. It sometimes appears that you are on some sort of personal crusade to constantly remind those who haven't bought their car outright of their circumstances. You come across as smug. Correct me if I'm wrong.
I'd be interested to see if your views change when you eventually step foot into the real world
EDIT: Apologies if that reads as being confrontational, it's not supposed to be. Just an observation.
The need to 'mod' cars is also something that you grow out of as you age more often than not of course and there is nothing to stop you from 'modding' a car on a PCP either as long as you return it to stock when you give it back to your lovely stealer. The other thing to bare in mind, moving the cost of finance to one side for a moment, is that people choosing a PCP will be doing it on new cars and in the current climate on more expensive cars they will probably have GFV that will be worth more than the real market value, hence why the car finance houses have taken a major bath of late. Those people who bought the car cash and who own the car will come to take a bath when they choose to sell the car in 3 years because they will loose the additional depreciation and that depreciation in the current climate on an expensive car might even be close to the finance costs, even more on some instances. 
As I have said on many occasions shades of grey is a better way at looking at things more often than not. PCP has its place and suits some people such as Mr Scuzi and actually owning your motor when it’s a tool of your trade or something you enjoy but see as a disposable item, which most are, is not anything to write home about really. Horses for courses really and in life the mathematically correct financial decision is not necessarily the most appropriate. The problem is many people have crap maths and crap decision making hence our current climate but that is a whole different discussion.
As I have said on many occasions shades of grey is a better way at looking at things more often than not. PCP has its place and suits some people such as Mr Scuzi and actually owning your motor when it’s a tool of your trade or something you enjoy but see as a disposable item, which most are, is not anything to write home about really. Horses for courses really and in life the mathematically correct financial decision is not necessarily the most appropriate. The problem is many people have crap maths and crap decision making hence our current climate but that is a whole different discussion.
Nothing to do with that at all. I just dislike methods of finance which generate enormous profits for the finance company and mean you end up paying a small fortune more than the value of the car in order to have use of the car. I don't have an issue with, say, a bank loan for example. PCP's just seem.. I dunno, it's like a product designed to exploits those particularly desperate to own a new car but unable to obtain it by any other means? It tends to work out massively more expensive UNLESS the market collapses AFTER you take the PCP out and nukes the residuals, which means a lot of people with PCP's on 645Ci's for example taken out in 2005 are rather happy right now but thats the exception rather than the norm.
A lot of people simply dont think about what they are going to do after the 3rd year. It seems so far away. Then it comes around and suddenly they've got to find a 5 figure sum they probably don't have, or they have to negotiate another finance package with the dealer at a less than great rate as they are stuck, or they have to give the car back and go straight into ANOTHER PCP deal...
I'll ignore the personal digs
I am on no 'personal crusade' but I also dont change my opinions with the wind direction so its natural that every time this topic comes up my opinion is the same as it was last time.
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I see. Surely you can see that for a lot of people, a bank loan of say £20k or more is not possible. They'll probably throw the money at you if you have equity in property to secure the loan but for uncouth ruffian scum like me who rent (it's true, I'm one of them 
)it's not possible.
I don't like handing finance companies fistfulls of money any more than you do but the "want" inside me overruled the boring side of my brain. Can't say I've regretted it yet but if circumstances change I may do. We'll see.
)it's not possible.I don't like handing finance companies fistfulls of money any more than you do but the "want" inside me overruled the boring side of my brain. Can't say I've regretted it yet but if circumstances change I may do. We'll see.
It's difficult to go any deeper into this without winding each other up un-neccesarily but sometimes there comes a point where acceptance that something you covet is not currently possible is the case. I really wanted a BMW M5, I could probably have done it with an enormous great loan yet instead I realised that.. well.... it simply wasn't viable.
Your situation is different as you've got huge disposable income but in your position I'd probably have bought something as similar as possible for half the price until such time as I could obtain a conventional loan, or buy the car outright, or whatever.
Your situation is different as you've got huge disposable income but in your position I'd probably have bought something as similar as possible for half the price until such time as I could obtain a conventional loan, or buy the car outright, or whatever.
It's fixed cost motoring, that 997 C4 will (assuming it includes maintanance) not cost you a penny more than £1100 to run over three years.
All you need to do is insure it.
It provides peace of mind to some people.
Personally I would buy a 6 month car and take a loan out for it.
All you need to do is insure it.
It provides peace of mind to some people.
Personally I would buy a 6 month car and take a loan out for it.
[TW]Fox;13392981 said:
That's where you and I differ. You have a hell of a lot more patience than I do. I didn't want to settle for second best and I didn't want to wait a few years. Yeah, to some it's an expensive price to pay for a lack of patience but it's affordable and it leaves the rest of my savings intact for various other scenarios where they may be needed. PCP is along the same lines as other "convenience" products. You pay a premium for a convenience. To some this premium is worth it, to others it is ludicrously expensive.
As Housey quite rightly said, horses for courses. If we all lived by the same set of rules the world would be a very boring place.
I completely agree with that. For a select few, PCP makes sense. But generally these select few know who they are so its fair to say anyone asking 'Is PCP a good idea' should really be told 'Not really' - if it was the right product they wouldn't need to ask.
Its not that, fox and I have had this conversation before. And its down to the fact that for fox, the car purchase has to make sound financial sense. This is why for example, he thought my purchase of the VXR was mad. a 5k 02 plate ST220 would do 90 % of what the VXR does, but for 50 % of this price. On the basis of those numbers, the purchase makes no sense whatsoever.
And this is where you an I scuzi are similar, in that we dont car what makes financial sense, we know what we like, and if we can have it without being put at risk of being made homeless, then we'll have it.
Fox on the other hand will always have to make a sensible and rational purchase on his car, and objectively choose the best one. Thats why he does so much research prior to a car purchase.
Fox be honest here, you'd never go out and impulse buy anything expensive (like car expensive) would you ?
Bet you can't guess what my planned career route is can you
I'm destined to be boring for ever.
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[TW]Fox;13393904 said:
Bet you can't guess what my planned career route is can you
I'm destined to be boring for ever.
Sales rep.