Does nobody buy a car outright? Am I missing something?

Stringy said:
No, that's how much it costs you to borrow the car (unless you fully intend on paying the GFV at the end). However, most PCP/PCH customers don't see it like that unfortunately and think they own and awesome car and tell their mates what they've 'bought'.
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That's why I don't think I could have a PCP deal throwing £1000s at something to just see it go at the end of the term with nothing to show for it.
 
Dav4 said:
Well you bought a lemon then Fox :p
Every car I have owned when I have worked it out has cost about 50-60% less all in to what a new car on the monthly would have cost.
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Wouldn't that then just be the opportunity cost of having an new car vs an old car though?

Unless you are comparing buying a new car outright vs financing a new car... if so I find your 50%-60% less a bit dubious.

For example I have had 5 new cars since 2006. Mixture of Fiesta's and Focus' and their ST equivalents. Averaging around £200 per month. Plus a grand maybe two each time deposit. So around £30,000 plus services.

I could have bought a Focus ST outright 11 years ago for just shy of £30,000. It's anyone's guess how much I would have spent if anything had gone wrong... 11 years later it wouldn't be worth much to sell?
 
Stringy said:
No, that's how much it costs you to borrow the car (unless you fully intend on paying the GFV at the end). However, most PCP/PCH customers don't see it like that unfortunately and think they own an awesome car and tell their mates what they've 'bought'.
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yes but what I am saying is that you have a static monthly expense, you drive a new car which may have the tech you want and you can't afford and it simply is nice. At the end it doesn't matter what you have to show for it, if I was to use my car as tool to get from a to b I'd grab a 5 series and be done with it, pay the monthly and give it back once I want something fresh. Painless.

is it the cheapest way to own a car? no but is it the easiest/least stressful? probably, which is why it is so popular so many people go for it.

majority use cars as tools and that's where the set monthly price temps so many people.

they don't care about the final price, how much it costs compared to older car or how much it costs to buy it in other ways all they care about is the monthly expense and thats it.
 
Stringy said:
No, that's how much it costs you to borrow the car (unless you fully intend on paying the GFV at the end). However, most PCP/PCH customers don't see it like that unfortunately and think they own an awesome car and tell their mates what they've 'bought'.

There's nothing wrong with someone opting to hire a car through PCP/PCH, the disconnect comes with the days-gone-by perception of car ownership and prosperity. A large proportion of new cars are not owned by the person driving them, they are simply borrowing them and paying for the privilege. If that's how someone wants to spend their money (within their means) then that's their business, although I don't think it's a particularly shrewd move.
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It's all semantics though. Would you call people out for not being home owners because they have a mortgage? Would you describe someone as hiring a house if they only paid an interest only mortgage?
 
balky12 said:
For example I have had 5 new cars since 2006. Mixture of Fiesta's and Focus' and their ST equivalents. Averaging around £200 per month. Plus a grand maybe two each time deposit. So around £30,000 plus services.
I could have bought a Focus ST outright 11 years ago for just shy of £30,000. It's anyone's guess how much I would have spent if anything had gone wrong... 11 years later it wouldn't be worth much to sell?
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I normally only keep cars 12 months but I had my Focus ST225 for 18 months which is only 6 months shy of 2 years.
A brand new Focus ST250 with deposit for 2 years on the monthly before giving it back would have been just over 6k so total cost to drive that for 2 years would have been 6k.
I bought a mint 9yr old ST225 privately and sold it privately. In 18 months including depreciation and maintenance with tyres It cost me in total 2.3k to own.
So I had my used ST for 18 months and ended up £2300 out of pocket.
If I would have leased a new ST for 24 months I would have been at least £6000 out of pocket. I would have gained nothing owning a new ST as it's no faster or more fun to drive but i would have been around 3.5k worse off to what my used ST cost me to own. I know i would rather have 3.5k in the bank than having the number 17 on my plate instead of a 9yr old example
 
balky12 said:
It's all semantics though. Would you call people out for not being home owners because they have a mortgage? Would you describe someone as hiring a house if they only paid an interest only mortgage?
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You make a good point; however, in my mind it's a question of intent. Someone with a mortgage is paying to own more of the house over time with the ultimate goal of owning the whole thing, I'd class them as a home owner. In this sense to me it's more akin to using a loan to buy a car due to the intent behind it, the difference being a mortgage is secured on the house whereas a loan isn't.

Interest only mortgages are a strange beast when compared to cars as you're paying to own part of a house (your LTV never increases in the eyes of the mortgage provider) and live in it, while speculatively hoping that the value of the house increases so that if you ever do sell you'll get some/all of your money back. I suppose in a way it is a bit like PCP in that you hope that the value of the car at the end will be more than the GFV and that you'll get some of your money back. Instead of an interest only mortgage you could always call it a 'depreciation only car loan' with an option to buy at the end.

Someone who leases a car is renting it, much like leasing a house. Someone who uses a PCP to 'own' a car with no intent of paying the GFV is doing the same thing, just using a different mechanism to achieve it where they might get money back at the end, in my opinion they don't really own it.
 
Entai said:
I have only ever paid cash for all my cars, never financed part or whole on any I have had.

Just put in order for 2018 Mustang, when they ask for a deposit. it will be cash, when I pay for the car later, it will be cash.

Always found there is more power to haggle a discount, if you hand them a nice crisp pile of folding.
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That's probably the least accurate information ever. A car dealer earns nothing if someone pays cash for a vehicle so there is certainly little to zero haggling room, and actually you're only mugging yourself off too.

Best plan? Sign up to all the finance in the world that they (the dealer offer). Salesman gets his commission, Dealer does well, suddenly much larger margins of discount appear off the screen price, everyone happy. Within the next 14 days, use your (nice crisp pile of folding) to "cool off" the finance. Everyone still remains a winner.

In short, I can guarantee a much larger swing in screen price for someone willing to take finance, than someone willing to pay for a car outright with cash.
 
Dav4 said:
snip
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Makes sense. It's the age old argument of old vs new. £145 more a month for a brand new car is obviously worth it to some. Neither person is right or wrong though... I keep trying to come off the finance/ leasing merry go round. But some of the deals to be had are pretty sweet.
 
grudas said:
lmao at people missing the simple fact. OLD cars require maintenance and usually break down more than modern stuff.

the reason finance/lease deals are so popular is because you can simply look at the monthly price say, £200 and you know that is it. That's how much it costs you to own the car.

if it breaks? warranty..

what if old car breaks? your own pocket.
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All cars require maintenance. That £200 extra a month in my back pocket will fix my 15 year old nicely.
 
inflames said:
All cars require maintenance. That £200 extra in my back pocket will fix my 15 year old nicely.
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200x24 = £4800
running a 2k banger for 2 years - 2k + what ever it costs to maintain it.

did you miss the fact that you need to have a car in the first place before you can fix it?
 
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grudas said:
200x24 = £2800
running a 2k banger for 2 years - 2k + what ever it costs to maintain it.

did you miss the fact that you need to have a car in the first place before you can fix it?
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200x24 = £2800, what sort of maths is this?

Not the same ownership experience but if he can't run something like a £2800 fiesta for 1k a year then you are unlucky.
 
grudas said:
200x24 = £2800
running a 2k banger for 2 years - 2k + what ever it costs to maintain it.

did you miss the fact that you need to have a car in the first place before you can fix it?
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With Math skills like that no wonder people are silly enough to agree to PCP.
 
Firestar_3x said:
200x24 = £2800, what sort of maths is this?

Not the same ownership experience but if he can't run something like a £2800 fiesta for 1k a year then you are unlucky.
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Man maths clearly :D

What I am getting at is that people simply prefer the easy way..
 
grudas said:
What I am getting at is that people simply prefer the easy way..
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the problem here is the people who view cars as tools, still want to have the brand new shiny tool with all the bells and whistles, rather than the old, cheap tool that'll do the same basic function with zero flair.

for example a mate of mine uses his car as a tool, it has 4 wheels and an engine and that's all he needs. he runs a 23 year old 306 with 300k on the clock and when it breaks it gets fixed with bits harvested from scrap motors. that's using a car as a tool, renting a brand new 316d msport isn't using a car as a tool, it's using it as a faux status symbol.

it's the same reason nobody uses a basic "dumb" phone, it'll still send texts and make calls but people have to have the latest shiny gadget.
 
adolf hamster said:
the problem here is the people who view cars as tools, still want to have the brand new shiny tool with all the bells and whistles, rather than the old, cheap tool that'll do the same basic function with zero flair.

for example a mate of mine uses his car as a tool, it has 4 wheels and an engine and that's all he needs. he runs a 23 year old 306 with 300k on the clock and when it breaks it gets fixed with bits harvested from scrap motors. that's using a car as a tool, renting a brand new 316d msport isn't using a car as a tool, it's using it as a faux status symbol.

it's the same reason nobody uses a basic "dumb" phone, it'll still send texts and make calls but people have to have the latest shiny gadget.
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I use tools to work on my motorbike, I have decent relatively expensive bits for a home hobbyist because they're nicer to use than cheap rubbish.

In the same vein I bet a brand new 316d msport is a much nicer tool to use than a battered old 306.
 
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