Is PCP........... the next debt crisis???

[Chasbmw]

I think that a cautious approach to PCPwould be to calculate the costs by adding up the monthlies and include a % of the deposit, working on the basis that having enough equity in the bike for a new deposit at year 3 is not guaranteed.

If you use you bike for commuting then you need to calculate your annual mileage carefully, getting that wrong at 5p per mile would hurt.

I have heard stories of people buying on PCP who don't realize that there is a payment at the end or the mileage limits, just get persuaded in by the low monthlies.

[Philiptigerrice]

Where are all the GS's after the PCP..... Abroad?

No!


Try looking at the mottorad used approved lists.

Its astonishimg how many Top Spec, three year old bikes with 5,000 miles on them turn up.

Just , not for long.

I was in Williamsons the other day, guy rode out on his New Rallye... Nice....

He'd brought his three year old triple black in.... It never e en made the website, it was sold that day!

Also, BMW will do you a PCP on a three year old used approved, so you can dodge a lot of depreciation there.


We own our bikes, but I may well take on a used approved beemer next...



Car wise, we've rented (leased or PCP) for 9 years.

Its not for everyone.

The last car we owned was a secondhand mondeo that was on a cheap loan, and costimg us £250 a month over four years.

Over four years we spent over £1300 on getting through MOT's, about £600 in tax, and £750 in servicing. It was petrol and did about 25mpg. It was a dog.

Almost £15,000 over four years.

It was worth fuck all at trade in.

We estimate it cost us £310 a month to run.

We then started leasing. We now have a new Range Rover Evoque on order, we only run one car, own the bikes, and dont have Sky TV etc. I've also doubled my income)


But the cost of the Evoque is £335 a month (it was on a special offer with Nationwide Vehicle Leasing). Its the bottom of the range, and is two wheel drive. It does an alleged 67mpg. (!) Tax is included and we paid for a servicing bundle.

So, to have a brand new range rover on the drive, no servicing costs, no tax, no MOT, no risk, full warranty etc is great for us.

Its her yummy mummy car, but she works hard and wants something nice, I'm away half the year, so dont need to worry about breakdowns or unexpected bills etc. If Jonny thinks she's keeping up with the Jones's it cause he's driving an old mondeo I expect :laugh:

(Just kidding!!!)

I could easily afford to buy it, but whats the point? We'll want to change in three years, so I'd have lost £335 a month in depreciation, plus the payments. And carried all the risk! Nah.

My brother in law thinks I'm nuts for leasing, but then he shelled out £3600 on discs and various other bits for his Merc last year. He could almost of leased a branny for a year for that....


You ask any millionaire, they'll tell you - if it appreciates, buy it, if ir depreciates, lease it.

Unless, its special to you, like a bike is.....



One last thing, we factor in 12,500 miles into our lease bundle, its just right.

Some of them bike PCP deals have woeful mileage allowances....

[-Ralph-]

It certainly true that if you are buying new, the PCP payments are now so close to the depreciation, that you don't save enough, or sometimes anything at all, buy buying on HP or cash.

Unless that is you intend to keep the car for a long time. In which case if you look at the total cost, deposit, plus 36 x monthly, plus balloon payment, then you'd usually have been cheaper financing it some other way.

If you buy new and only keep for 3 years, take a PCP and keep your money in the bank.

BUT....anyone buying new will take a massive depreciation hit, however they finance it. So the cheapest way to run a newish car for 3 years is buy 2 years old and change at 5 years old.

[-Ralph-]

BUT....anyone buying new will take a massive depreciation hit, however they finance it. So the cheapest way to run a newish car for 3 years is buy 2 years old and change at 5 years old.

Case in point...

64 plate Evoque 10,000 miles £22500
http://www.autotrader.co.uk/classified/ ... 3012793839

61 plate Evoque with a further 12,500 miles a year on the clock £19992 http://www.autotrader.co.uk/classified/ ... 2262695096

If the Evoque is still holding those kind of residuals in three years time that's a very nice Range Rover on the drive for 3 years and 37,500 miles for only £2500, or £70 per month.

[-Ralph-]

Hmmmm.....

If Land Rovers are holding those kind of residuals I think I'll be talking my wife into this instead of a GLC or Mini

http://www.autotrader.co.uk/classified/ ... 2282776752

[bowber]

My personal opinion is very much with Steve and JB, no matter the finance it's going to cost you something so buying cash (or equivalent) is always going to be cheaper in the long run, but I can understand the need or want for a new bike, car etc and when you look at depreciation and loan costs it gets more attractive, however I'd rather buy a cheaper second hand bike then have a new one on finance.
I have a friend who has a very good well paid job, he has quite a lot of money in trust from when his dad died leaving him reasonably financially secure, he has a mortgage and and expensive tastes. Last year he bought a second hand 1200GS on PCP and in the 5-6 months he's and it he's done less than 400 miles on it so now he's thinking of handing it back. I'd be interested in the difference between handing it back and paying off the balance and the same bike bought cash and sold private sale.
I'm not suggesting in any way one or the other would be better, I'm just wondering which would be cheaper?

Steve

[Oop North John]

Last year he bought a second hand 1200GS on PCP and in the 5-6 months he's and it he's done less than 400 miles on it so now he's thinking of handing it back. I'd be interested in the difference between handing it back and paying off the balance and the same bike bought cash and sold private sale.

Doing that is probably the worst way of using PCP, as if he's really unlucky they'll only give him the guaranteed future value for the bike. They might be able to sell it privately and get a bit more, might.

Personally I only do PCP on cars as I have no emotional attachment to them, and hardly ever modify them in any way.

[ledwardio]

BUT....anyone buying new will take a massive depreciation hit, however they finance it. So the cheapest way to run a newish car for 3 years is buy 2 years old and change at 5 years old.

Case in point...

64 plate Evoque 10,000 miles £22500
http://www.autotrader.co.uk/classified/ ... 3012793839

61 plate Evoque with a further 12,500 miles a year on the clock £19992 http://www.autotrader.co.uk/classified/ ... 2262695096

If the Evoque is still holding those kind of residuals in three years time that's a very nice Range Rover on the drive for 3 years and 37,500 miles for only £2500, or £70 per month.

The big downside for that is finding the £20000ish in the first place - if you have to borrow it then you'll possibly be paying more than the PCP or Lease

[-Ralph-]

BUT....anyone buying new will take a massive depreciation hit, however they finance it. So the cheapest way to run a newish car for 3 years is buy 2 years old and change at 5 years old.

Case in point...

64 plate Evoque 10,000 miles £22500
http://www.autotrader.co.uk/classified/ ... 3012793839

61 plate Evoque with a further 12,500 miles a year on the clock £19992 http://www.autotrader.co.uk/classified/ ... 2262695096

If the Evoque is still holding those kind of residuals in three years time that's a very nice Range Rover on the drive for 3 years and 37,500 miles for only £2500, or £70 per month.

The big downside for that is finding the £20000ish in the first place - if you have to borrow it then you'll possibly be paying more than the PCP or Lease

I dealt with that one earlier in the thread, it's about breaking the debt cycle, and starting a savings cycle, which for most people means keeping a car until its a bit older.

Run your car for three years after you've finished paying for it (means running a car to 6 or 8 years old, big deal, they are very reliable nowadays). During that time, instead of paying £350 per month into a PCP, pay it into a savings account.

After the three years of no finance repayments, take the 13 grand you now have in the bank, the deposit you were going to have to put down on the PCP anyway, and your trade in value, and there's your £20k.

Assuming of course your happy with a 2 year old car, and you can cope with the Jones next door pointing at your 6/7/8 year old car until you get to that point. If not just carry on taking a new PCP every three years.

I have a private plate on my 2 year old car, and until the Jones next door stick a key in the ignition and read the odometer, they'd think it was brand new, there isn't a mark on it.

It's costing me £277 a month in depreciation, on a PCP it would be £7500 deposit, £500 a month and £21,500 still to pay at the end.

I just need to put £277 a month away, and three years later I could just trade this in against something else 2 year old of a similar value. I probably won't, hopefully I'll still like the car, it'll still be reliable, and because I look after it it'll still look shiny, and I own it outright so why change?

[ledwardio]

But Ralph, that's sensible, and organised :blink: :blink:

Well beyond my limits