Car advice

[deej]

 

 

22 hours ago, beefybake said:

 

I've always paid cash for cars, or on the 2 occasions in 40 years that I've borrowed money

to buy a car, I've taken out a personal loan from a bank.  That way, I can see exactly how much

I'm really paying for the car, and I actually own the thing from word go. No HP, no PCP, No balloon

payments, or residual trade in values. In short, no smoke and mirrors.

 

At root, I just think that borrowing money, incurring debt, to buy something that depreciates in value

is stupid money management.

 

.

21 hours ago, beefybake said:

As I said, I prefer to avoid the smoke and mirrors. 

If I own the car...

I can do what I wish with it.  If I tire of it after, say, the new car smell wears off, I'm not stuck with it.

I can do as many miles in it as I choose, without  incurring a penalty.

If I get ill, or I lose my job..., the car is still mine and I don't have to find the £200 a month, say, month in, and month out,

for just about ever.

If that were to happen do the bank just say "ah never mind paying back that loan"?

Quote

You say 'finance'.  I say debt, because that is what it is.

 

Finance/Debt, Shite/Jobby

32 minutes ago, beefybake said:

Not in my experience,   I've always paid cash for cars, except for two occasions.  Both of those were personal loans

from banks.  They both knew that car purchase was in my mind, I told them so. 

Monies were credited to my account.  From there,  I gave it to the sellers.

I owned the cars.

 

But were in debt to the bank. 

 

How is that better or worse than being in debt to a finance company? 

 

You're coming across as someone that doesn't understand PCP, and therefore has written it off as "Smoke and mirrors"

[Shandon Par]

The stuff about being bound to mileage etc with PCP is a misconception too. You can still trade in the car/settle the finance whenever or wherever you want. They or you just request a settlement figure from the company.  If you can get something with a good discount to start (eg a pre-registered) then you're getting a fixed cost car and can usually bundle in warranty and servicing. 

I think beefybake is simpky referring to a personal loan. You can say it's for buying a car but spend the money on whatever you want. You can phone Tesco, for example, and get a 10k unsecured loan if you have decent credit.  

[beefybake]

17 minutes ago, deej said:

 

 

.

If that were to happen do the bank just say "ah never mind paying back that loan"?

 

Finance/Debt, Shite/Jobby

 

But were in debt to the bank. 

 

How is that better or worse than being in debt to a finance company? 

 

You're coming across as someone that doesn't understand PCP, and therefore has written it off as "Smoke and mirrors"

 

Not really.  I've owned somewhere in the region of 40 cars.   From £50 bangers to £17,000 s/h BMW's. 

Of the 2 personal loans, the last one was in 1988, when I borrowed £4000 from my bank to buy a 1 year old Peugeot 405.

Yes, it was a debt, but I haven't repeated the exercise.    The advantage to me was that the interest payments on a personal

loan were easily visible, and thus also was the total cost. And, as I've said the car was mine.  

 

The primary objective of PCP is to make new cars available to those who, in truth, can't really afford them,

and also to keep them in the debt/finance loop by moving on to another PCP contract at the end of the current one.

 

Cash is king.

 

[welshbairn]

PCP means you're paying for the depreciation plus profit without owning the car, for the privilege of driving something new and shiny. If you just want a car to get you from A to B I don't see the advantage with modern cars that are usually more reliable and need less maintenance to get a good few years out of.

Edited June 29, 2020 by welshbairn

[Sergeant Wilson]

6 hours ago, jamamafegan said:

Nah mate. I'm driving it intae the fuckin' ground man

Problemo solved!

[RandomGuy.]

5 hours ago, deej said:

 

How is that better or worse than being in debt to a finance company? 

Because you own the car...

I took a bank loan too. Payments, and interest, were lower than any finance option.

If I hit a situation where I cant afford the payments anymore, I sell the car, get 100% of the sale money, and then pay off the loan without any major penalties and currently that would see me left with around £2-£3k left over.

Edited June 29, 2020 by RandomGuy.

[welshbairn]

10 hours ago, jamamafegan said:

My Vauxhall Astra is ancient. Mileage is about 120k. I’ve had a poor recent run with it repairs wise, I’ve had to spend hundred on it. Now the engine light has come on, this time it’s not going off. Who knows what that will be.

I quite fancy getting a 4x4 next - anyone’s got any tips/recommendations/good websites for buying them second hand?

I had a nearly gone old car years ago where the engine light went on, and I found a web thing that explained how to fit a paper clip into the fuse box so the engine light would flash the error code. Didn't help much but it saved £40 to find out what it was from a garage.

[gav-ffc]

10 hours ago, Shandon Par said:

The stuff about being bound to mileage etc with PCP is a misconception too. You can still trade in the car/settle the finance whenever or wherever you want. They or you just request a settlement figure from the company.  If you can get something with a good discount to start (eg a pre-registered) then you're getting a fixed cost car and can usually bundle in warranty and servicing. 

I think beefybake is simpky referring to a personal loan. You can say it's for buying a car but spend the money on whatever you want. You can phone Tesco, for example, and get a 10k unsecured loan if you have decent credit.  

I know of someone who’s 10k a year mileage and is over it by 17k each year and only has had the car for 2 of the 4 years. 

[killiepiemuncher]

Problemo solved!

I’ve got a few of them little lights flashing in my car at the moment namely ABS and VSA ones. Drives fine though.

[Bonksy+HisChristianParade]

12 hours ago, beefybake said:

 

Not really.  I've owned somewhere in the region of 40 cars.   From £50 bangers to £17,000 s/h BMW's. 

Of the 2 personal loans, the last one was in 1988, when I borrowed £4000 from my bank to buy a 1 year old Peugeot 405.

Yes, it was a debt, but I haven't repeated the exercise.    The advantage to me was that the interest payments on a personal

loan were easily visible, and thus also was the total cost. And, as I've said the car was mine.  

 

The primary objective of PCP is to make new cars available to those who, in truth, can't really afford them,

and also to keep them in the debt/finance loop by moving on to another PCP contract at the end of the current one.

 

Cash is king.

 

If cash is king why are you using up all your cash/liquidity in the purchase of a car?

I don’t really see the issue with PCP. Just because I didn’t have the cash up front to buy the car doesn’t mean I ‘couldn’t afford it’. By making the monthly payments it’s evidence that you can afford it. I don’t see it as any different really than a mortgage or a phone contract. I looked at getting a bank loan to buy the car outright but decided against it - I was given a couple grand for a shitey banger and further cashback for taking on the deal, it’s worked out pretty well tbh. I’d rather have the cash available for any unforeseen circumstances or to invest.

Each to their own.

[Slacker]

My PCP deal is running out in November and my MOT is due in October, so was going to hand it back a couple of months early. I know I can hand it back, but what I don't know is: will they ask/make me MOT it before I do?

[Rugster]

29 minutes ago, Slacker said:

My PCP deal is running out in November and my MOT is due in October, so was going to hand it back a couple of months early. I know I can hand it back, but what I don't know is: will they ask/make me MOT it before I do?

No. As long as it’s returned at least a week before MoT due you’re ok in my experience. 

[beefybake]

9 hours ago, Bonksy+HisChristianParade said:

If cash is king why are you using up all your cash/liquidity in the purchase of a car?

I don’t really see the issue with PCP. Just because I didn’t have the cash up front to buy the car doesn’t mean I ‘couldn’t afford it’. By making the monthly payments it’s evidence that you can afford it. I don’t see it as any different really than a mortgage or a phone contract. I looked at getting a bank loan to buy the car outright but decided against it - I was given a couple grand for a shitey banger and further cashback for taking on the deal, it’s worked out pretty well tbh. I’d rather have the cash available for any unforeseen circumstances or to invest.

Each to their own.

As already said, several times, by me and other posters....

With cash, either your own, or with a personal loan from a bank.... you own the car from Day 1.   If things go wrong  in your life, you can always raise cash by selling it.  With  PCP, HP...,  you do not own the car, and the monthly payment is still there to be paid regardless of whether you are struggling, ill, lost your job, furloughed ....

By the way..., I suggest you start educating yourself about personal financial management.    If you're saying, and you are, that  being able to meet a monthly payment is the same as being able to afford the car, then that means you are financially ignorant. You're just quoting what car salesmen are trained to say.

Edited June 30, 2020 by beefybake

[Bonksy+HisChristianParade]

1 hour ago, beefybake said:

As already said, several times, by me and other posters....

With cash, either your own, or with a personal loan from a bank.... you own the car from Day 1.   If things go wrong  in your life, you can always raise cash by selling it.  With  PCP, HP...,  you do not own the car, and the monthly payment is still there to be paid regardless of whether you are struggling, ill, lost your job, furloughed ....

By the way..., I suggest you start educating yourself about personal financial management.    If you're saying, and you are, that  being able to meet a monthly payment is the same as being able to afford the car, then that means you are financially ignorant. You're just quoting what car salesmen are trained to say.

It’s £150 a month or something I pay, I can’t really envisage a scenario where I’m not able to pay that. If it that scenario did occur then I think I’d have more to worry about than being unable to meet my PCP deal.

I don’t need your advice on ‘personal financial management’, cheers though. PCP was a more financially prudent option for me to get a reasonable car at the time, rather than splurge all my cash on it like a mug. 

[Lambie's Pigeon Feed]

What car do you have for £150 a month? That is the same as I'd be paying back with a bank loan. I have no dog in this race, just an assumption that owning the car no strings attached is easier, not having to worry about mileage or scratches, not having that constant niggling concern you get with a hire car.

[Bonksy+HisChristianParade]

14 minutes ago, Lambie's Pigeon Feed said:

What car do you have for £150 a month? That is the same as I'd be paying back with a bank loan. I have no dog in this race, just an assumption that owning the car no strings attached is easier, not having to worry about mileage or scratches, not having that constant niggling concern you get with a hire car.

Not a great car (Kia) granted, but a brand new one with zero issues.

For example, I bought my previous car outright and cost me about £5k (probably actually under its value at the time but it was a slightly older car). After about a year it became plagued with problems to the extent that I doubt I would’ve been able to sell it privately for anything more than a few hundred quid. If I’d taken out a bank loan and been unable to make the payments I wouldn’t have been able to ‘just sell the car’ as it was worth f**k all. As it was I managed to punt it to the dealership I got my PCP from for a reasonable amount as they were clearly just interested in getting the sale. I still made a substantial loss on it - with the attempted repairs costs and the significant depreciation in value.

My current car is a 19 plate and had no issues whatsoever with it. If it became fucked like my previous car I would be covered by warranty and I’m sure I wouldn’t be liable for all the repairs costs I had with my other car (and MOTs etc.). I could’ve took a bank loan out and bought the car directly, I doubt I would have received the same deal in terms of contribution to my deposit which I got my taking the PCP deal though.

I don’t really see the issue with it in a lot of circumstances tbh.

[jamamafegan]

I have to agree with beefybake on this one. Although I get the benefits of PCP i.e it’s perhaps less hassle and covered under warranty, I hate the idea of not actually owning my car. I couldn’t believe it when I was once told that you don’t actually get to keep the car - you never pay it off. To me that is madness. At least with a phone contract you get to keep it at the end of the contract.

PCP just seems like another way for a company to keep getting money out of folk forever more. Personally I’d much rather buy a car outright. That way it’s actually mine, I don’t need to worry about minor damage to it and I’m not paying for it every single month. Even my shitheap of a car, which has had to go through hundreds of pounds of repairs between October - February hasn’t cost me anywhere near as much as 150 quid a month. It’s money down the drain IMO.

[Lambie's Pigeon Feed]

So where do PCP cars end up when people give them back after 3 years? Just dealerships or is their bargains to be found somewhere?

[JamesP_81]

My understanding of PCP is that it's basically a way to keep a customer in a never ending loop of continually changing cars every few years while never having any equity in them. Realistically no-one is ever going to stump up the final payment of £x000 to finally buy the car they've been driving around in for the last 4 years and the 'guaranteed buy back value' I would imagine is always going to be on or just below the expected market value. This could be fine for people who just budget that they will pay x amount to run a car every month and don't have any desire to buy one outright for various reasons. I personally am trying to get out of that cycle as I hate paying interest on things.

[strichener]

On 28/06/2020 at 15:01, Ron Aldo said:

Surely when buying a car on PCP or leasing is the best way to go? I've never seen the point in buying a car outright given it'll constantly be losing value. PCP or leasing means you only pay off a portion of the car's value for a few years with the dealership/finance company taking the hit in terms of depreciation. 

There is only one party taking a bit on the depreciation.  

Hint: It isn't the finance company