- Jun 16, 2015
- Reaction score
My thoughts is you are only paying the depreciation on the car which you would with any car
I certainly agree with this, and on a new car PCP makes sense if you can get a good deal (discount, good rate, extra incentives), but my issue is the new car bit! I appreciate that a lot of people prefer a brand new car, but the depreciation is just to hard to swallow for me personally...
I guess that becomes a new debate about new vs used cars though
Buy it through 'Carwow', normally cheaper than a pre registration car. I could not find a cheaper pre reg S3, all were atleast £1800 dearer than what iv paid, and for same price im talking 14 plate. I appreciate there probably space for bartering and I am one for getting something as cheap as possible but with these types of cars im not sure you can get a nearly new for cheaper than what you can shopping around.
Oh yes definitely with regard to nearly new or pre reg cars. Would always advise to go new using sites like Carwow. When I say used I am referring to up to 3 year old models through Audi Approved used with <30k on the clock. Those are generally the cars I tend to go for. Of course that has its own pitfalls (possible issues after 12month warranty, more servicing items, finding the right spec), but the costs are generally much lower.
When I was looking at getting a new A5 I think I worked out the car was depreciating at an average of around £6k per year over 3 years, compared to my used model only around £1.5k per year...!
Totally agreeI like buying new. Don't know why but I like being the first to drive it and take care of it.
I think depreciation hits more with normal finance or paying cash. You drive out the forecourt and 20% Vat disappears there and then. You'll take the same hit with a PCP but as has been said at around 18-24 months you break even or are up in the equity stakes. Straight back into a new car. It's a no brainer for me given I like to change cars every 18-24 months.
I think buying cash then going to trade in 2 years later to be told your 34 grand car is now worth 18 is a hard pill to take. Especially if you're still paying a bank loan.
My next will be PCP and the next and the next.
Thats fair enough, yes I agree a 3yr + car will be cheaper to run, I just wouldnt like a potential unexpected £600 bill for something which an argument could be well save the extra you dont spend on a new one. Suppose its all down to personal preference. I like my cars, I dont drink a lot, I dont smoke, holidays and cars are what I like to spend my money on, and like a new car.
Agreed. Although with your house analogy PCP would be comparable to a mortgage rather than renting - deposit plus monthly payments plus interest. Only the super rich don't need a mortgage. On a somewhat smaller scale, only the reasonably rich can afford to pay cash for a car. My Mrs has a bad vibe about PCP and wanted me to lease. After paying a similar sized deposit, a 2 year lease on the same spec A3 worked out a lot more expensive than a four year PCP (assuming it would need 2 x 2 year leases and two deposit payments over the same term). It seems a no brainer to me. Basically, if you want a new car every few years but never pay for more than 50% of it, PCP is the way forward.Personally I think it is the best way to purchase a car. Iv also had 5 cars on PCP over 36 months terms at 10k per annum and never kept a car for longer than 18 months.
My thoughts is you are only paying the depreciation on the car which you would with any car so why do you need to own it in full?
People say to but you wouldn't rent a house - "yes, a house appreciates a car doesn't"
Also they say but you don't own the car, yet not one person has come back to me with a reason why I need to own a car in full. I find it easier to budget having a brand new car with a set monthly payment no large outlay and any issues is covered under warranty and given a courtesy car so always on the road. With all my last 5 cars I have included 3 years free servicing so not paid out for that.
Also I have found the best time to change is 18months 3 of the 5 cars have given me back the deposit I put in, i.e. £4500 deposit on a octavia vrs, and at 18 months I had £4500 equity so only cost me the monthly payment, 2x tyres on the front and 6 months road tax due to 12months road tax with the car.
Also the milage is something to reasonable about but not essential, an example of this:
A good friend bought a Polo GTI said he would do 5k per year, had it 3 years and ended up doing 20k per year due to a job change, he's just swapped the car for a new Polo GTI and the dealer called it square on the car and just paid the outstanding finance so he could start a fresh with the new car.
Also GAP Insurance, I go with ALA Gap Insurance, they are very helpful and can carry the policy over if you get a new car, also cheap £136 for our new S3 over 3 years.