PCP for "dream car", is it worth it?
Discussion
Hi all, I've been toying with the idea of saving up some money to potentially put down as a deposit for a "new" car. I've never financed a car, all my cars up until now have been straight cash/paid in full, my current is a 2011 BMW 1 series coupe. However I've been obsessed with the Ford Mustang for as long as I can remember, I got to drive the 5.0 V8 on a track day for my 30th birthday last year, and then rented the 2.3 Ecoboost version in Florida and I've decided I really want the 2.3 version. As much as I'd love to have the full fat V8 version, I more than enjoyed the 2.3 version in terms of ride, comfort and gadgets and it was surprisingly good on fuel, and seeing as it'd be my daily to work etc, this is a plus.
I've found a few 2018 models for around or under 28/27k on autotrader and played around with the PCP calculator and with around a 7-8k deposit, can get the monthly payments to around £250 or less if I add in my current car as PX. Now I know this means I won't own the car outright unless I pay the balloon payment at the end, but 4 years is still quite a long time to own a car and by the end of it I might decide I've had my fill and go back to something more standard, or if I'm lucky enough, give it back for another Mustang.
For wanting the chance to have your dream car, is it worth it or do I keep dreaming? Any advice?
I've found a few 2018 models for around or under 28/27k on autotrader and played around with the PCP calculator and with around a 7-8k deposit, can get the monthly payments to around £250 or less if I add in my current car as PX. Now I know this means I won't own the car outright unless I pay the balloon payment at the end, but 4 years is still quite a long time to own a car and by the end of it I might decide I've had my fill and go back to something more standard, or if I'm lucky enough, give it back for another Mustang.
For wanting the chance to have your dream car, is it worth it or do I keep dreaming? Any advice?
nickfrog said:
Have you compared to the cost of other methods of finance like a personal loan? Much different?
That's actually a good point now that I've looked into it to be honest. Depending on the price and amount of loan I'd be willing to take and length of loan, a part loan towards the price of the car is similar to the PCP deal and I'd be owning the car outright.FWIW, I came out of Uni and bought a house (used savings for deposit) and then got a loan to buy a 3-year old Impreza turbo. Despite being able to afford the monthlies, all the other associated running costs (and having the car wanting for nothing!) meant accummulating more and more debt. Hopefully the sums all work for you - the Mustang really is a lovely car!
Also worth considering during the 4 years how much cash you can put aside to have ready for the replacement.
Chris
Also worth considering during the 4 years how much cash you can put aside to have ready for the replacement.
Chris
ScoobyChris said:
FWIW, I came out of Uni and bought a house (used savings for deposit) and then got a loan to buy a 3-year old Impreza turbo. Despite being able to afford the monthlies, all the other associated running costs (and having the car wanting for nothing!) meant accummulating more and more debt. Hopefully the sums all work for you - the Mustang really is a lovely car!
Also worth considering during the 4 years how much cash you can put aside to have ready for the replacement.
Chris
I'm setting myself a specific limit when it comes to the monthlies, be that either for the loan or PCP. I don't mind getting one that's a 2015 or 2016 reg if it means being at the lower end of 20k range and needing a smaller loan. In the end, all the models from that year and that are RHD are more or less the same inside and what I'm familiar with.Also worth considering during the 4 years how much cash you can put aside to have ready for the replacement.
Chris
Right now used car costs are as high as they've ever been, and the cost of borrowing money is expensive if you don't have a perfect credit score.
You can decide if these things matter. But if it is in any way marginal to afford it (e.g. you're banking on it being worth significantly more than the balloon payment), then it's probably a bad idea.
You can decide if these things matter. But if it is in any way marginal to afford it (e.g. you're banking on it being worth significantly more than the balloon payment), then it's probably a bad idea.
C70R said:
Right now used car costs are as high as they've ever been, and the cost of borrowing money is expensive if you don't have a perfect credit score.
You can decide if these things matter. But if it is in any way marginal to afford it (e.g. you're banking on it being worth significantly more than the balloon payment), then it's probably a bad idea.
Yeah, probably a bad time to be looking at used cars in general. I'm just throwing idea's out there and getting advice before any informed decision. You can decide if these things matter. But if it is in any way marginal to afford it (e.g. you're banking on it being worth significantly more than the balloon payment), then it's probably a bad idea.
The key thing for a PCP deal is if you want to keep the car at the end of it, or not. As somebody who changes their cars every few years (I've never had a car longer than 3-years), PCP works for me as I know I won't execute the final optional payment. The worst case is the car devalues significantly and I hand it back and start all over again, which I'm prepared to do.
Go into it with your eyes wide open and honest with yourself. There's nothing inherently wrong with PCP, it's just not appropriate for everyone.
Go into it with your eyes wide open and honest with yourself. There's nothing inherently wrong with PCP, it's just not appropriate for everyone.
If you can afford it, and you have job security, and depreciation is factored in, and you don't mind borrowing at a higher APR, then PCP isn't a bad thing if it gets you into an otherwise unattainable dream car.
If it's in any way marginal (e.g. you're banking on overs on the balloon), or you're stretching your monthly finances to afford it, then it's perhaps not a great time to do it.
Having just bought a second home project, my coffers are relatively bare (i.e. my rainy day fund has been accounted for several times over). I've been really trying hard to avoid giving into the urge to finance something fun like an Alfa 4C or a 981 Cayman. Instead I spent what would have been the deposit and bought a £4,000 Z4 to tinker with and tide me over. When the cost of borrow drops substantially, or if used prices car get more realistic, that might change. But that's just my personal situation and decision. Everyone is different.
If it's in any way marginal (e.g. you're banking on overs on the balloon), or you're stretching your monthly finances to afford it, then it's perhaps not a great time to do it.
Having just bought a second home project, my coffers are relatively bare (i.e. my rainy day fund has been accounted for several times over). I've been really trying hard to avoid giving into the urge to finance something fun like an Alfa 4C or a 981 Cayman. Instead I spent what would have been the deposit and bought a £4,000 Z4 to tinker with and tide me over. When the cost of borrow drops substantially, or if used prices car get more realistic, that might change. But that's just my personal situation and decision. Everyone is different.
C70R said:
If you can afford it, and you have job security, and depreciation is factored in, and you don't mind borrowing at a higher APR, then PCP isn't a bad thing if it gets you into an otherwise unattainable dream car.
If it's in any way marginal (e.g. you're banking on overs on the balloon), or you're stretching your monthly finances to afford it, then it's perhaps not a great time to do it.
Having just bought a second home project, my coffers are relatively bare (i.e. my rainy day fund has been accounted for several times over). I've been really trying hard to avoid giving into the urge to finance something fun like an Alfa 4C or a 981 Cayman. Instead I spent what would have been the deposit and bought a £4,000 Z4 to tinker with and tide me over. When the cost of borrow drops substantially, or if used prices car get more realistic, that might change. But that's just my personal situation and decision. Everyone is different.
I’m lusting after a 981 too, but I don’t think the 4C is ever going to go down in price and I wouldn’t bank on borrowing costs to go down anytime soon…If it's in any way marginal (e.g. you're banking on overs on the balloon), or you're stretching your monthly finances to afford it, then it's perhaps not a great time to do it.
Having just bought a second home project, my coffers are relatively bare (i.e. my rainy day fund has been accounted for several times over). I've been really trying hard to avoid giving into the urge to finance something fun like an Alfa 4C or a 981 Cayman. Instead I spent what would have been the deposit and bought a £4,000 Z4 to tinker with and tide me over. When the cost of borrow drops substantially, or if used prices car get more realistic, that might change. But that's just my personal situation and decision. Everyone is different.
pb8g09 said:
C70R said:
If you can afford it, and you have job security, and depreciation is factored in, and you don't mind borrowing at a higher APR, then PCP isn't a bad thing if it gets you into an otherwise unattainable dream car.
If it's in any way marginal (e.g. you're banking on overs on the balloon), or you're stretching your monthly finances to afford it, then it's perhaps not a great time to do it.
Having just bought a second home project, my coffers are relatively bare (i.e. my rainy day fund has been accounted for several times over). I've been really trying hard to avoid giving into the urge to finance something fun like an Alfa 4C or a 981 Cayman. Instead I spent what would have been the deposit and bought a £4,000 Z4 to tinker with and tide me over. When the cost of borrow drops substantially, or if used prices car get more realistic, that might change. But that's just my personal situation and decision. Everyone is different.
I’m lusting after a 981 too, but I don’t think the 4C is ever going to go down in price and I wouldn’t bank on borrowing costs to go down anytime soon…If it's in any way marginal (e.g. you're banking on overs on the balloon), or you're stretching your monthly finances to afford it, then it's perhaps not a great time to do it.
Having just bought a second home project, my coffers are relatively bare (i.e. my rainy day fund has been accounted for several times over). I've been really trying hard to avoid giving into the urge to finance something fun like an Alfa 4C or a 981 Cayman. Instead I spent what would have been the deposit and bought a £4,000 Z4 to tinker with and tide me over. When the cost of borrow drops substantially, or if used prices car get more realistic, that might change. But that's just my personal situation and decision. Everyone is different.
C70R said:
Right now used car costs are as high as they've ever been, and the cost of borrowing money is expensive if you don't have a perfect credit score.
You can decide if these things matter. But if it is in any way marginal to afford it (e.g. you're banking on it being worth significantly more than the balloon payment), then it's probably a bad idea.
True, but on the flip side, the trade in 2011 BMW is worth more too #ManMaths You can decide if these things matter. But if it is in any way marginal to afford it (e.g. you're banking on it being worth significantly more than the balloon payment), then it's probably a bad idea.
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