New car time - EV PCP deals?

[Amraam]

So my model 3 is going back. Long story short; new job means I no longer have access to salary sacrifice scheme, so car's going back early. Gutted. So, I need a new car, and quickly. Current car has been a fantastic bargain; ~£350pm full maintained and insured for a model 3 LR. I cannot afford to buy or lease a model 3 any way now, so I need to look at more sensible options. The cost of petrol is eye watering, and whilst I only do 10k miles a year, the cost approaching £2 a litre is making me seriously consider staying electric.

With that in mind, I have my eye on the MG ZS EV Trophy long range. It's hardly a sporty thing, but packs the tech I deem necessary, has adequate range, would be cheap to insure, and has V2L which is handy for hobby stuff and camping. Problem is the PCP deals. To get my monthly payments down to £400, I'd be needing to put down a £5k deposit. I have that money, but the idea stings.

Carwow has some deals available, just waiting on the dealer to get back to me with details.

I've been very fortunate to have a model 3 for so relatively cheap, but it is al why this cost feels so high - welcome back to the real world, Harry.

I'd like a decent size hatch or SUV that will take all my radio control gear, has decent spec (satnav, good range if EV, good economy if ICE, not stupid slow because anything is going to feel slow after 4.2s to 60, not a garbage audio system, with Bluetooth as a minimum for phone connectivity.).

What's out there that piques your interest that you'd point me to? Not beyond buying a run around for the time being, though we are going to Cornwall (from Newcastle) for a week's camping and I'll be damned if we're going in her 2013 Kia Picanto that doesn't even have AC.

 

[Amraam]

£20,000 to drive an MG for 3 years?

Four years, but yup, it's getting scary. Model 3 was nigh on £14k for 3 years but that was a crazy cheap deal.

I don't know the best option to go for. I don't want to go back down the route of buying used cars and faffing about fixing them, and I need to get something sorted quickly.

But paying smaller amount on PCP for a petrol car is going to rack up £2k a year on petrol alone. I don't want to drop to £200 and drive around in a 1L fiesta with no perks at all. Would rather pay nearer what I am now and keep some comfort/tech

 

[Amraam]

You can get an MG MG5 SW (Long range 61kWh pack) in the Exclusive trim within your budget and I think it hits your requirements. The PCP example was £3049 deposit, with 48 months at £376.72, and a final payment of £12,510, the credit cost over the 4 years is an eyewatering £3,151.56 but I suppose you could pay off the PCP if you could find some finance yourself. That was with the 10k miles and the vehicle was/is in stock for immediate delivery, brand new.

For reference the 10k miles at £1.85 per litre and 50 MPG is ~£1679. EV using 90% home charging (9000 miles in other words) on a proper EV tariff which I am sure you already have is ~£168 + £100 for public charging, so ~£268 in total at 4mpkWh. Over 4 years assuming no prices change at all, that is a saving of £5,644 in fuel costs, goes quite a long way to helping fund the car.

That final point is what is weighing heavily on my mind, and it's a point that people often overlook. Electricity prices may (probably will) increase a lot, but petrol and diesel already is (and, again, probably) may continue to rise. Very unlikely it'll come down to nearer £1 a litre any time soon, but I may be known for my cynicism ha.

I was looking at Skoda Octavia and Fabias last night. The overall PCP deal looked a little less daunting, but then when you add £100pm in fuel alone, it adds up. More to go wrong and maintain with ICE too.

The other thing I need to consider is mileage allowance. Miles to base will drop from 15 per day to 6 ish, but I will likely be driving around sites more, so my current 10k mileage might be very different soon. I also have no idea if there is mileage claim system at the new place either. So much to consider, and I definitely thinking just buying a high mileage, decent condition used car for £2k or so for now is the safest option. In this market, I could probably sell it on at little loss...

Yeah I'm painfully aware of lead times I'm led to believe the Ioniq 5 has a 12 month+ wait?! The only reason I'm (naively) talking about getting MG ZS EV soon as I thought I saw some dealers with available stock?

 

[Amraam]

If its 4 years then its almost £25,000. I cannot possibly see how this is a good idea? You must be able to buy and run any number of better cars for less than £25,000 over 4 years.

The Tesla deal was good because of the incredibly favourable tax treatment of electric cars through the various salary schemes. The true cost of the Tesla lease was much more than the £14k you paid.

I understand that, but the only cost I care about is the cost to me. What ever way I look at it, that tesla deal was a steal and I'm very lucky to have been able to get it, but it doesn't change the fact that I'm looking at expensive times ahead whatever I go for.

 

[Amraam]

It's probably the worst time to be buying a car right now.

New cars : easily 12+ month lead times
Used : 3 year old cars priced about the same as they were when new.

You need to lower your expectations across all of your criteria !

Yup, that's what I'm doing. Alas, it's going to suck going from the bells and whistles to a lesser car that costs more ha. Part of adulting I guess

 

[Amraam]

The thing is with the way BEV's are going, in 4 years time there is still going to be increasing demand for cars, especially used ones. It is impossible to work out the exact TCO over that time, given you don't know what that value will be at the end, and as mentioned we have to assume price rises for both fuel or electricity. You have to take a bit of a guess really, will a 4 year old MG5 be worth more than the £12.5k GFV + interest payments already made? If it is worth that (~£14,930) then your monthly cost is ~£311, plus the fuel saving cost again any ICE deal you can find. So as you said if saving £100 on fuel per month, what will ~£200-220 per month buy you over 4 years in an ICE car (£9.6 - £10.6k) what would it be worth at the end and how much would you have spent on maintaining it etc. Or a like-for-like what will it get you on PCP?

This is where, financially, I struggle. I don't understand money stuff terribly well, and struggle to see the greater picture beyond what a total cost / 48 months is.

 

[Amraam]

He is correct though - but there is no certainty or easy way to calculate.

The difference between a lease and a personal contract plan is that the personal contract plan has a fixed value at the end which you can pay to keep the vehicle, whereas a lease is just a long term hire car that goes back.

Generally, this fee (Known as the 'guaranteed future value') will be lower than the actual value of the vehicle, meaning you'll have some equity in the car at the end (ie, you'll owe less to buy it than its value). If you hand the car back to the finance company at the end of the agreement, you lose this.

But if you pay the fee and purchase the car from the finance company you can sell it and keep this equity. Alternatively, which is what most people do, you can use this equity when you trade the car in towards another. For example, if the guaranteed future value is £10k but the car is worth £12k in trade-in, you get that extra £2k towards your next car (The other £10k going towards settling the finance agreement).

To calculate the true total cost of a personal contract plan over the time you intend to have the car you need to be able to subtract the equity value from the total you've paid. But you can't easily do this as you don't know what it is. Historically it was fairly easy, just look at the value of an older version of the same model, adjust the figure for changes in model and a bit of inflation and you could have a reasonably sensible estimate of what that equity might be. But in the current market this is impossible - car values are so different to historical levels that its very hard to predict what anything bought now will be worth in 2026.

I don't like personal contract plans for this reason - the only certainty you have is the monthly payment, the true cost is difficult to calculate and all of the focus is on the monthly amount not the total cost which is the opposite of how any sensible appraisal of a purchase should work. People take them out because the monthly payments are lower as you only pay off the difference between the purchase price and the final value (Though don't forget you pay interest on the full amount borrowed). Typically this means people pay more for a car without realising because they focused only on monthly payments. This is why the motor industry likes them.

thanks, appreciate the time it took to write that. I understand the concepts of PCP vs PCH/Lease/Loans etc, it's just the unknowns. The PCH deals can be quite good, but there's never equity or option to buy, and you're more likely to get stung for stone chips and what they deem to not be acceptable wear and tear. It's just the unknown bits that make it so hard to work out, as you say.

I'm just gonna have to get myself on autotrader and start mooching about and tyre kicking the old fashioned way. MG have confirmed 9 months at least which is pretty much what I expected.

What are people's thoughts on PCH?

 

[Amraam]

Plenty of dealers on AT with brand new cars listed ready for collection, in the MG ZS EV Trophy

Yeah looking through them now, but the PCP is still a bit too high for me.

 

[Amraam]

God this is a nightmare. It's scary how expensive everything is becoming.

I'm not sure how to find something that isn't a high mileage rust bucket or costs £500 a month.

I don't even think I have that high standards, I just don't want any old thing purely for a to b driving. Cheap as possible isn't the aim.. A nice balance is.

 

[Amraam]

Well you are paying out £350pm now, how much below that do you want to go? Obviously things like insurance etc. need to be considered in to that figure, so what are you aiming for?

I wouldn't like to go much above £400 for everything including fuel if possible. Realistically I pay about £400 now with electricity. I just want a mid sized car that isn't utter garbage and doesn't cost the earth run either. A small shopping trolly on wheels isn't suitable for me due the camping trips we do and the hobbies I have. I'm not expecting crazy performance either. I've had quick cars for a few years now so I'll have to grow up and accept I no longer can afford that. But something that takes 12s to 60 etc will frustrate the crap out of me. Most of the toy in the model three are luxuries I do not need but things like AC and a basic cruise control are pretty important.

Taking the MG ZS EV as an example, a model 3 it certainly is not, but it seems to have decent range, the required features, a perk of V2L (handy for said hobbies and camping). Yes, it's a canny chunk up front then £400pm, but insurance is coming through as £300 annually and being an EV the fuel cost is (for now) a LOT less than petrol car getting an average 40mpg. It's all such a big balance game.

 

[Amraam]

If its 4 years then its almost £25,000. I cannot possibly see how this is a good idea? You must be able to buy and run any number of better cars for less than £25,000 over 4 years.

The Tesla deal was good because of the incredibly favourable tax treatment of electric cars through the various salary schemes. The true cost of the Tesla lease was much more than the £14k you paid.

I'm not sure how or where you're seeing better deals? I'm clearly not adept at car buying and deal hunting, but any car that's £30k financed on PCP is going to equate to that sort of money? Surely the only way to get better is go used, older, and with higher mileage, and then I'm still looking at circa 10% APR as opposed to the lower, albeit still eye watering, rates of new cars? Then moving away from EV to lower the cost of the vehicle itself, I'm doubling or trebling the monthly fuel costs.

 

[Amraam]

I have savings, enough that I could almost go out and buy a £30k out right, but that would wipe me out. I have zero equity (not a home owner) so I'm reluctant to use up too much of my life savings. I'm happy to part out with £5k or so as a deposit towards a good PCP deal or a temp car (where I'd hopefully make £4k of it back selling it on etc.). I'm not sure a bank loan is the best way forward, with all the repayment and interest there; payments would be £500-600 pm on a £25k loan etc.

 

[Amraam]

The short story is that QNT needs to sort itself out and make me rich quick

 

[Amraam]

Not sure why you don't just PCP the MG ZS EV Trophy, and opt to keep it at the end regardless, no need to worry about mileage allowances etc. then. It's going to put you over budget, or you could as above see if you can secure a low interest bank loan, but then the monthlies will be much higher as you'll be paying off the full balance over around 5 years, rather than 2/3 the cost, which could be then financed at the end. Yes you are going to pay interest quite lot of it, or you opt for a second hand Skoda Fabia estate or something at around £10-12k and just pay the fuel costs for the next 4 years.

That's what I'm currently leaning towards, assuming I can get one in stock (MG have ceased ALL EV orders). This is not a dig at [TW]Fox, but I'm easily swayed or steered by comments like "20k for an MG?" etc. As a chronic stressy over thinker, I read that as a 30k PCP deal on an MG is the worst possible decision a human could make

I still can't work out where "£20k for 3 years" comes from? It's a four year deal and assuming I did keep it for longer, like 6 years say, it's more like £25k for 6 years if I buy it at the end, and assuming it might be worth only £8k after 6 years. It's impossible to know, which is why this is so hard. Realistically will i want to keep the same car 6 years though? Possibly (probably) not...

 

[Amraam]

It's money, you earn it you spend it, whether or not it is a good deal is up to you to decide. I personally would have to think long and hard about that sort of outlay, just like you have been. Not due to the cost more due to the value side of things, its not even the type of car or brand as it is merely transport for the most part that fits your needs.

Something like the £10k secondhand 1.0L estate car with £5-6k fuel bill over 4 years will save you £5k+, you can do an awful lot with £5k+ of extra money, food for thought.

That's very true.

That price bracket car type is not something I've really focused on. What car would you recommend there? A small astra estate or focus/mondeo?

 

[Amraam]

I doubt it, but even if it is, this is a further argument against this sort of vehicle financing isn't it?

No £30k car is going to be worth only £5k in 4 years time, so you should be able to find a way of driving it for 4 years that doesn't cost £25k.

Personal Contract Plan is typically the most expensive way to finance a car. But dealers and customers like it because of all the available options it is the one which gives the lowest monthly payment...

What other options are there then? I don't have £30k available to hand over in cash, PCH is similar money with zero possibility of equity at the end, and bank loans are double the monthly cost.

PCH on an MG ZS EV is £1100 + 47x £359 + insurance and maintenance etc. £18000 lease cost over 4 years

 

[Amraam]

worst time for any car purchase atm with increase in interest rates and rising inflation. Would be better off riding the storm in a cheaper model until this crisis has reversed

Worst time thus far. I suspect in 6 months from now, it'll only be worse again.

 

[Amraam]

Couple that caught my eye. PCH though...

Hyundai Kona Hatchback

£198.12 Per Month, INC VAT. 1.0 TGDi 48V MHEV SE Connect 5dr on a Personal 35 month term with a 9 month deposit and an annual mileage allowance of 10,000 miles.

leasing.com

Cupra Formentor Estate

£282.59 Per Month, INC VAT. 1.5 TSI 150 V1 5dr DSG on a Personal 35 month term with a 9 month deposit and an annual mileage allowance of 10,000 miles.

leasing.com

 

[Amraam]

Because you own the car. The overall cost will likely be lower unless the rate on the finance is particularly good, but I can't see it being as low as a bank loan. The more money you put in yourself, the less you need to borrow and the lower your monthly cost and the cost of borrowing.

I get this, but this assumes I want to own the car for a long period, which I probably won't want to. Once you're out of warranty costs start mounting up in repairs etc.

 

[Amraam]

What are folks thoughts on the Hyundai Kona MHEV then? No power house, certainly, but £10k cheaper than the MG ZS EV which would account for the fuel costs:

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