How much can i borrow?
Discussion
depends on your definition of "afford"
but that amount of car will let you rent say, a £90 K car on PCP, give it back in 3 years
or borrow £25K on a personal loan, and you could own something for £30K outright in 3 years
lots of examples
http://www.oraclefinance.co.uk
but that amount of car will let you rent say, a £90 K car on PCP, give it back in 3 years
or borrow £25K on a personal loan, and you could own something for £30K outright in 3 years
lots of examples
http://www.oraclefinance.co.uk
PCP is a type of finance with a balloon payment at the end, yes. So you pay A in deposit plus B per month, then after C months you can either pay D balloon payment to keep the car, or hand it back. The deal will be connected to the car, so it's hard to come up with a definitive value for the car you could get. It's probably fair to say that PCP is more prevalent on new cars.
On a straight personal loan, you could probably borrow about 25k to add to your 5k. But some would say you might as well use your savings and get a loan later if you need the money.
On a straight personal loan, you could probably borrow about 25k to add to your 5k. But some would say you might as well use your savings and get a loan later if you need the money.
christmc said:
Why does that seem odd? I earn good money but only have 20k savings so im not going to put all that into a deposit which i may lose in a finance deal, hence only want to use 5 k deposit.
Must be missing something obvious here but how would you lose your savings in a finance deal?christmc said:
is pcp the deal with a balloon figure? or is it literally just renting the car?
PCP has a ballon - but unless you can afford £800 a month, and save up the £45K in 3 years too for the final payment, you have to give the car back, or sell it...hence you are just renting it for 36 months, you will never "own" it as an asset (even a depreciating one)to really "afford" the car to "own" you need £5K down and about £2600 a month payment ...and 3 years later, you will own it outright ...or pay cash of course ...but to be fair, if you have access to £100k pots of cash, you likely have better places to invest it, as finance is relatively cheap still
PCP is a way to "defer" half the value of the car so you dont pay off the capital - its like an interest only mortage on a depreciating asset - so it makes the finance company more money in interest, and you get to drive a car 2x as expensive as what you could "afford" on straight HP/finance
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