You can't just ignore the residual value of the car. You are always hell bent on monthly figures rather than total cost lol. PCP and you won't pay the capital back if cashflow per month is that critical to you. I personally prefer net lower costs.Here is the monthly budget on this:
Still talking nearly £300 more monthly cost than what I currently have. Don't you think this is a bit crazy, that I am saving so much on fuel and not allowing anything for repairs, yet still coming in nearly £300 a month more than current? It feels like Im missing something.
And at the end of my personal loan period that car will be out of battery warranty. I have no idea what that means in terms of risk, or loss of capital value of the car.
Do you think £400 is unrealistic then, completely? I mean, it certainly looks that way, is everyone else here spending way more than £400 a month for their motoring? It is a lot of money and Im not even running a modern car.
I am skewed by what happened to my previous car (engine failure on 115k miles) and the fact that this one is also showing signs of trouble. I am also interested in EV from the point of view of not paying any fuel costs! But, I still need a decent size car there is no getting away from that. I haven't seen anything suggested that is keeping the cost reasonable whilst meeting the criteria.
I don't necessarily need an estate, the Audi Etron I saw today is an SUV and was enough load space for me in both volume and floor area. But whether estate or SUV, I need a decent load space.
Thinking of getting an EV
- Thread starter danlightbulb
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The car was £20,498
My APR is 9.8%
Monthly is £214 for the car, £62.50 accounting for the deposit making £276.50.
The ballon is £17,633
However I sold my old car to pay the deposit on the I-Pace, then save £62.50 a month to account for my inflated ballon and needing to have a deposit for the replacement car.
Im aware the car would have a residual value, but I also have to think about monthly affordability as well. I mean, there could be a car out there that costs £100k and in 5 years time would still be worth £100k. Net costs zero. I still couldn't afford to buy it because I can't afford a £100k loan. Im sure you understand the point, I need to consider affordability as much as, if not more than, residual value.
The second issue with the residual value is that its an unknown what impact the EV element of this would have. What residuals are we looking at, it could be next to nothing if it turns out batteries are falling apart after 8 year warranty period is up.
Thanks for sharing. My concern with an arrangement like yours is just how little is paid off the car. You're only paying £3k off it but paying £200 a month. What will you do when the PCP ends and you have to meet that £17k balloon payment?
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btw the one thing that might kibosh all this is the insurance. You might want to get some quotes before assuming it's not way more than you are used to (it will be more). My ICE car was sold for £1600 and the insurance had gone up to £660 a year for that. It was that and the upcoming MOT and tyres I would need made me decide it was time for some other car!
I wouldn't worry about the battery in n number of years time, it'll be fine for 15+ years (50% left), then replace it for cheap/upgrade or replace car.
I wouldn't worry about the battery in n number of years time, it'll be fine for 15+ years (50% left), then replace it for cheap/upgrade or replace car.
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Hand it back and replace it with another car, which is why he’s factored in the cost for a new deposit.
Ok, I haven't really looked at any PCP options yet because I don't understand it very well.
If I was setting a monthly budget for the car itself at around £300 a month, similar to what Tr1p is paying, then what could I get for that sort of money?
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Those are new cars I would need to look at used cars on PCP.
Often new car PCP is "more affordable" using your cashflow metric. That is because the residuals are higher, and the finance is generally much better. Even pre-interest rate hike, you could grab a new car <3% and a used car ~15%. I imagine they are big lol$ on used cars now.
Exactly as Spleen Sauce said, I have no desire to own the car due to the risk involved with batteries and residual values at that age.
I will hand the car back, pay any excess mileage which shouldn’t occur as it’s 8K per year and use the money I’ve set aside to get another with a deposit.
Personally I went on Autotrader, filled the criteria in I was happy with and went with the car that fitted my requirements.
If I was to do similar now, I’d maybe go with a ID.3, however you stated this doesn’t fit your requirements.
I would love to get an EV but it honestly doesn’t seem to make sense when you factor in the cost of installing a charger. And I am seriously worried about the battery issue. If phones are any guide, being degraded to 80% makes the thing seriously unreliable.
Interest rate aside, a £40k car depreciating to £20k should cost more than a £20k car depreciating to £10k.
I'd have to take an extended warranty if taking a 3 year old car on PCP as well, as Tr1p has done.
It should but you need to do the maths. If the 20k going to 10k is on a 16% finance agreement, needs an additional warranty, tyres, etc - then it can swing pretty neatly back to new.
You talk about residual value (rightly of course), but if I'm funding £20k depreciation whether on a contract lease or PCP or via a personal loan, then it's still lost money.
If that Skoda up above was £20k now and say £10k in 5 years time, half of my loan has just gone on depreciation. If the lease arrangement is similar then there could be no difference in total net cost, only that under the loan arrangement I have to buy the full value of the car upfront, whereas under PCP it's deferred.
Soldato
Ah, another person who has done zero research and applies random information from other devices to fit their fear/narrative. Go back to reading the Daily Fail?
My point is, a PCP on a used car is generally very poor APR. I can get a Tesco loan on that Enyaq at 6.1%.
I've just had a look at my portal, an EYAQ 85 Edition 82kWh is £805 gross plus £30 BIK. After tax it is £496.56. ~35 quid of that is when I increase mileage from 15k over 3 years to 35k over 3 years.
Alternatively I could take my 3k from the 325i sale and take a £17k loan on a used one and pay £330/mo - not worry about miles at all - and then be left with a ~5-7k? car at the end.
Gross cost on my scheme is £905 and it's saying £15 bik, for 3 years and 12k miles a year.
After tax that is £666. But that is because I have input my salary after pension contribution so the residual is getting tax relief at basic rate. If I input my full salary then the after tax figure shows as £584 but oddly the gross cost has changed to £934.
Essentially my salary is only just over the 40% bracket so I get 40% tax relief on my pension OR the car, not both.
Presumably your scheme is all inclusive though like mine? Insurance maintenance tyres etc all included.
So £330 per month is for the car only, all the rest has to be added on.
And you're liable for any repairs over that period too.
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OK so if you aren't a 40% tax payer than Sal Sac definitely isn't for you; unless you have no concerns on car e.g. BYD, Kona (the Kona is on a crazy offer atm; much like my Pug e2008 was at the time - something like £240 net cost).
You need to just take a loan and buy a car. Buy an EV or an efficient diesel or something.
Nearly new cars aren't going to be throwing up mega bills; extended warranties are there if you REALLY need to protect yourself.
£330 per month car only still leaves ~£180 odd to get some of the figures you are quoting.
Well it depends, as I said, if you take the car first or the pension first. I could say the car is at 40% tax relief to make it sound cheaper. Then my pension will be at basic rate relief. Or I put it the other way around.
This is why I've been taking the gross figure out to my spreadsheet to calculate..
Dude this is just top-tier mental gymnastics. You aren't getting the benefit of the salary sacrifice. Life sucks. It is a system that benefits the "richest".
Take a loan -> buy an ICE. Save on insurance, double your MPG. Alternatively buy an EV. Lose on insurance, save on your fuel big time.