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Car Leasing or PCP

Discussion in 'TalkCeltic Pub' started by Ciaran_67, Jul 28, 2020 at 4:39 PM.

Discuss Car Leasing or PCP in the TalkCeltic Pub area at TalkCeltic.net.

  1. Ciaran_67

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    Anyone lease their car via personal contract hire (PCH)?

    Have been used to doing PCPs but my term is due to finish and the value of my car is substantially less than the GFV payment.

    PCH seems to be much cheaper in monthly payments compared to any other method. I’m not actually fussed about owning the car - quite happy to get a brand new one every couple of years.

    What’s your preferred method of running a car?
     
  2. jake10

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    looked at this last year, I mainly use my motor for coming up from engerland for games and am up the motorway about 30 times a year including family stuff so leasing would make sense to get rid of a high mileage car for new every few years BUT it’s the not owning the car that just doesn’t sit right, a bit like renting V a mortgage so ended up buying a good low mileage second hand golf as our family’s Celtic Supporters Bus
     
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  3. Ciaran_67

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    Fairplay to you...the mileage caps on a PCP or lease might cause you a problem as well if your doing the long journeys.

    Personally, I don’t think I see the value in buying a new car outright in my circumstances (depending on depreciation rate mind you). But I understand the argument for buying outright too.
     
  4. Onefootwonder

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    I don't finance my cars. I like to own them and have flexibility.

    A lot of cars are going to be worth much less than their GFV. It will an easy decision to hand back to the finance company at the moment.

    Some of the lease deals are really hard to beat. Often I can't see how they'd even cover depreciation on a very good deal. The issues with the great lease deals is you need to be ready to commit immediately and you can't have a specific model and spec in mind. You have to be flexible and take the cars that pop up.

    As for PCP, far too many people don't seek out the best deals. They buy based on the monthly payment affordability. Most common cars have big discounts available.

    You can always change the mileage allowances on agreements. Often the penalty charge for excess mileage isn't bad either.

    What car are you looking for?
     
  5. PaulM1888 Gold Member Gold Member

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    The reason PCP and leasing is and will increasingly be more attractive than outright purchase is because the industry wants to head in that direction.

    Personally see no issue with it. The house comparison is a wrong one for one simple reason, houses will always appreciate in value. Cars will always, with few noteable exceptions, decrease. Owning a house outright is ultimately a long term investment, owning a car isn’t.
     
  6. Onefootwonder

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    As much as people don't like to admit it, the reason PCP deals got popular was it put them in cars they couldn't otherwise afford. If there wasn't such large amounts of the debt deferred then they simply couldn't afford the car they have.

    There is * loads of people driving about in cars with £30k+ with hardly a bean to their name. Just about making the monthly payment is defined as being able to afford.
     
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  7. PaulM1888 Gold Member Gold Member

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    Still don’t see the issue? If they can afford a PCP payment for a nice car who is anyone to begrudge them that?
     
  8. Minty Here we go, 10 in a row Gold Member

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    My first car was PCP, and at the time the method was fine for me. The only thing I didn't like was the mileage limits per year, so I don't bother with it now. You'll pay a bit extra but make sure you up the mileage to what you really want, otherwise you'll end up with extra charges at the end of it and it can be quite steep depending on the contract.
     
  9. JamesM09

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    Has anyone here ever had any problems handing back their PCP car?

    Like if you’ve had a few scratches or bumps from other peoples doors will they use that against you to say you owe money since the value of the car is further decreased?

    My guess has been that if you’re going straight into another deal they would overlook most things since they’re tying you up again, but what if you’re looking to get rid altogether?
     
  10. Minty Here we go, 10 in a row Gold Member

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    I had no issue, but I have heard a friend say it can be a pain in the * to cut ties. Stick to your guns if that's what you want to do.
     
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  11. Onefootwonder

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    Solely focusing short-term on the monthly payment is part of the problem.

    If you go along to the bank to borrow money for an appreciating house you have to prove you can afford it. You have to have some savings and be able to cover the mortgage when things go a little off track. At this moment in time I read getting a mortgage is rather hard. Probably as they will depreciate and the banks won't take the risk.

    Just about anyone still passes credit checks for £30k+ PCP finance deals. People that really can't afford the monthly payment and not a hope in * of covering anymore when something does go wrong. As much as people concentrate solely on the monthly payment it's still £30k+ of liability. It's neither affordable or responsible debt.

    If I had a pound for every PCP deal I've seen that has gone sour I'd be rich. Way too many people have little understanding other than the monthly payment. People need to be educated about finance deals and understand their commitment. They really don't.

    Nobody should be getting anywhere near their annual salary of debt for an item. There needs to be controls and restrictions to stop people getting into a mountain of debt when their circumstances change. Even more restrictions on young people who'll then complain they can't get a start on the housing market when they've squandered all their money to hire a car.

    It's so normal to load yourself with finance these days nobody sees any issue in it.
     
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  12. PaulM1888 Gold Member Gold Member

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    You seem overly concerned about other folks personal finances.

    If they can afford a PCP deal on a new car they wouldn’t be able to afford otherwise, again, who are you or I to make an issue out of it?

    In my personal experience the only folk that turn their nose up at other people driving Range Rovers and Beemers on PCP do so out of a jealousy.
     
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  13. DamianWayneCSC

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    I'm on PCP with my first real car and will happily admit the monthly cost and the factored in service+mot plan was a selling point.
    It got me a car that to be honest at the time I wouldn't have afforded. Instead of going for a low milage car on PCP, my other alternative was basically a second, third, fourth hand car at 100k miles for £1k and all the hassle that could have came from that later on.

    Now though, I'm in two minds wether I would willingly go with it for a second time (don't regret the initial purchase).
    Trying to weigh up the benefits on offer at the time to that of what I can afford next time and it's own benefits.

    For some further details, I moved back to Shetland since getting the car on PcP with Arnold Clark. So for me to now actually take further advantage of the service+mot plan I will need to take the car south every time (plus point both are due in the same two days), factoring that cost (car on the boat up and down and overnight stays) plus any actual work that may be deemed "my fault" is it really worth it?

    My idea initially would have been to "upgrade" after the 2.5years they informed me I could, but doing that now seems almost pointless as I will be forever in a system of Arnold Clark needing to do the work (the benefit) and thus taking the car to them.
    Alternatively, I can see out the 5 years and (I believe?) Own the car at the end of it (or is it that I'll need to continue finance out with their plan? I'm never sure need to check that) and then use that as a deposit for just buying a car up here/with a company up here.


    Either way, going by my situation of employment taking an up turn, the finance option on PCP was good to get me in a reasonable car, but long term I'll likely not use it again (unless a PCP plan in Shetland suits massively).


    I really ought to double check the details on what happens at the end of the 5 years.

    Sent from my Nokia 6.2 using Tapatalk
     
  14. King of Kings

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    I bought a TT about 18 months ago (hairdressers car I know, but perfect for what I need it for).

    Borrowed some cash from Zopa at a rate lower than any car financing deal I’ve seen and just paid outright. Loaning money to buy a depreciating asset is rarely ideal though.
     
  15. Onefootwonder

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    When your contract ends the car goes back to the finance company. It's not the dealer doing another deal unless you're trading it in early. More cars aren't worth their GFV at the moment and if the car needs money spent on it the dealer likely won't want your car. If he can hide the repair costs it will be at expense of discounts elsewhere.

    There is guidelines with limits what the finance companies can charge. Most of the charges are very fair and less than what respectable repairers charge. The issue is if the car has been used and abused for four years there can be a significant amount of repairs needed. The bill soon adds up.

    A lot of people can't take good enough care of the car.
     
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  16. Onefootwonder

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    Where did jealousy come into this?

    The topic is about car finance. I'm talking about car finance and points raised, but you're getting all defensive and sensitive.

    I've offered my opinion why I think PCP financing is wrong for many and irresponsible on so many levels. It thought my post was quite clear and you're asking a question I've already answered.

    It's frightening the amount of people that have zero understanding of car finance. We can't even teach the public the most basic reason behind wearing a face mask during a global pandemic even though it's simple and been repeated millions of times, but we trust them to sign for £30k+ of debt. :giggle1:
     
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  17. Minty Here we go, 10 in a row Gold Member

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    To own the car at the end of a PCP deal, there's a lump sum to pay off the remainder of the car. If you've still got the email/letter when you signed up, it'll explain what your options are.
     
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  18. DamianWayneCSC

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    Yup that's sounding more familiar.
    Recall the guy saying about moving the finance over to another company, pay a lump sum or trade up etc.

    Got all paper work tucked away, just not looked in awhile.

    Cheers minty.

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  19. DamianWayneCSC

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    Dug out the paper work, my PCP is only 4 years and not 5.
    So 4 years of monthly repayments and a final lump sum (or transfer the financial plan/loan) and own the car.
    Alternatively I think after 2 years I can trade in.
    Honestly, I'll likely just let the 4 years run (2.5 to go) and see what the cars worth come that time.
    Either will finance it to have ownership (be it loan or lump sum) and then I can do as I please. Or, trade up.

    Chances are I'll take ownership and eventually use the car as a deposit the following year.

    Sent from my Nokia 6.2 using Tapatalk
     
  20. Tallahassee 9 in a row Gold Member

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    Depends the value after 2 years. Don't want to end up with negative equity on top of the next car. That's why you need to be careful of what kind of car you get and mileage.
     
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