Let's assume I'm looking to buy a car that's worth around £15,000
What I'm confused about is which finance route to take....
Getting a loan from the bank appears to be the cheapest option. I can get £12k (3k of my own money to make 15k) for £215 a month for 5 years and I own the car outright straight away. Overall I'm playing an extra approximately £900 on top of that over 5 years (total cost of the loan = £12,900.
Yet with PCP over a period of two/three years I'm paying just a bit more per month but at the end of the term the car doesn't belong to me and I have to pay said amount to own it. Which looks like it will cost me much more than £900 when compared to the bank loan.
HP tends to be very expensive compared to PCP, so what I'm asking here is which is the most financially economical option and why do people not often get a loan from a bank to buy a car?
It just looks cheaper overall in my findings.
Let me know what I'm missing here....
What I'm confused about is which finance route to take....
Getting a loan from the bank appears to be the cheapest option. I can get £12k (3k of my own money to make 15k) for £215 a month for 5 years and I own the car outright straight away. Overall I'm playing an extra approximately £900 on top of that over 5 years (total cost of the loan = £12,900.
Yet with PCP over a period of two/three years I'm paying just a bit more per month but at the end of the term the car doesn't belong to me and I have to pay said amount to own it. Which looks like it will cost me much more than £900 when compared to the bank loan.
HP tends to be very expensive compared to PCP, so what I'm asking here is which is the most financially economical option and why do people not often get a loan from a bank to buy a car?
It just looks cheaper overall in my findings.
Let me know what I'm missing here....