It’s spelt Maffs
Car financing question
- Thread starter Dyson
- Start date
Is it. Okay.
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
But equally some will not, including the OP who wants to keep it 10 years.
Compare all your options. PCP can attract low interest rates (0%) is common and also have the benefit of deposit contribution from the finance co. This is extra discount not normally available.
PCP can be cleared at any time so even if you don’t want it, it can sometimes be beneficial to take it and then clear it with a lower interest loan just to get the contribution. Dealers won’t like this option though as they lose their commission for the selling of the finance product. You have every right to clear it early though.
Find a car you like and then compare the 3 routes. Negotiate with dealer for best deal on HP and PCP and then review the interest rates offered. If too high consider taking the bank loan either up front of to clear the PCP.
PCP can be cleared at any time so even if you don’t want it, it can sometimes be beneficial to take it and then clear it with a lower interest loan just to get the contribution. Dealers won’t like this option though as they lose their commission for the selling of the finance product. You have every right to clear it early though.
Find a car you like and then compare the 3 routes. Negotiate with dealer for best deal on HP and PCP and then review the interest rates offered. If too high consider taking the bank loan either up front of to clear the PCP.
Unless you can get 0% on a PCP with deferring the balloon for 3 years at which point you can clear with with savings or a bank loan? 2.8% is low but may not be cheapest option depending on car and deals available. The advice is always check all the options. At 0% I’d even take PCP over buying cash when I have it. It’s extra discount and 0 interest…
We just bought a new Q5 for delivery in 2022. Got additional £3k contribution/discount from Audi Finance. Their APR is crap tho (4.9%) so will clear it after but certainly worth taking up front to get the extra money off.
Ford offer 0% on everything but STs at the moment which are 2.9% so with extra discount for PCP it’s worth it as you get more money off and 0%.
This normally only applies for new btw. 2nd hand are usually much higher APR with little incentive.
We just bought a new Q5 for delivery in 2022. Got additional £3k contribution/discount from Audi Finance. Their APR is crap tho (4.9%) so will clear it after but certainly worth taking up front to get the extra money off.
Ford offer 0% on everything but STs at the moment which are 2.9% so with extra discount for PCP it’s worth it as you get more money off and 0%.
This normally only applies for new btw. 2nd hand are usually much higher APR with little incentive.
Soldato
Just checked Zopa. 15% Apr on 10k over 5 years. Screw that, that's crazy money.
You must have terrible rating. I can get 5%
Soldato
I didn't apply for anything just googled them
Associate
5% is still pretty poor compared to the best bank loan rates. I've used Zopa in the past but they don't seem to be as competitive as they used to be.
If I was the OP and had 10k to spend on a newish car I would either buy a car at 10k or get a personal loan to make up the difference. I stay away from PCP deals as I see them as a debt trap, but if you have the funds and want a new car ever 3 years go for.
Soldato
Some cars come with 0% interest on PCP (Ford have some 2 year options for example), so may be worth seeing what model you're interested in and comparing the finance to a loan from elsewhere such as your bank.
Our car was 6.9% with £250 off for taking PCP. Still got a loan from the bank at 2.9% to pay off the PCP straight away.
Our car was 6.9% with £250 off for taking PCP. Still got a loan from the bank at 2.9% to pay off the PCP straight away.
PCP on a new car is a safe bet if you just want a fixed monthly cost, warranty and no concerns about ownership (basically renting), then just give the car back at the end of the agreement, or if you're lucky, have some equity to put down for another vehicle.
HP is fine if you pay over "X" years and plan on keeping the car long term, but considering the over inflated prices at the moment, maybe not so good.
For example, one car supermarket i do vehicle inspections at has increased the sale price of pretty much everything on a weekly basis.
So, say you want to sell that car in 12 months time when the costs stabilize (and they will) you'll have a whole extra bunch of negative equity to deal with.
HP is fine if you pay over "X" years and plan on keeping the car long term, but considering the over inflated prices at the moment, maybe not so good.
For example, one car supermarket i do vehicle inspections at has increased the sale price of pretty much everything on a weekly basis.
So, say you want to sell that car in 12 months time when the costs stabilize (and they will) you'll have a whole extra bunch of negative equity to deal with.
Banks are under 3%
PCP direct with the manufacturer deal is under 4% & ZERO deposit (the dealer usually pays a small deposit & the manufacturer pays the rest-to themselves)
PCP direct with the manufacturer deal & a big deposit (20-25%) = 0% APR
As always if your credits good these are the best deals right now!
PCP direct with the manufacturer deal is under 4% & ZERO deposit (the dealer usually pays a small deposit & the manufacturer pays the rest-to themselves)
PCP direct with the manufacturer deal & a big deposit (20-25%) = 0% APR
As always if your credits good these are the best deals right now!
Self-awareness is low with this one
How so?
Arguably 0% PCP deals make more sense than buying outright, because:
a) You can earn interest on the capital you would otherwise have paid up front
b) You can take advantage of deposit contributions
c) It gives you a bit of optionality on what to do at the end of the term - for example if you decide that ultimately the car isn't worth the balloon payment, you can just hand back the keys assuming you haven't exceeding the mileage limit. If you've bought the car outright, you might have the hassle of trying to sell or p/x the vehicle.
a) You can earn interest on the capital you would otherwise have paid up front
b) You can take advantage of deposit contributions
c) It gives you a bit of optionality on what to do at the end of the term - for example if you decide that ultimately the car isn't worth the balloon payment, you can just hand back the keys assuming you haven't exceeding the mileage limit. If you've bought the car outright, you might have the hassle of trying to sell or p/x the vehicle.