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If you took a loan out for £5k and paid it off over 2 years, I believe your payments would be around £100 per month (~4%). At the end of the 2 years, you would own the car outright and it might still be worth around £2k.
Help me decide please...
Cut a long story short. Currently paying £240 p/month for a Seat Leon 1.6tdi (64 plate) with electronic pack and am approaching the end of 4 year pcp. Can buy the car for 5k at end of deal. Started contract when doing 15k per year but for last 2.5 years have done nowt just about to click onto 34000 miles. Main crux of issue is that I want to get monthly payment down to c.£150 p/month!
Do I stick with this car for the 5k which would be financed via a loan? Bearing in mind low milage and dealership servicing history.
Do borrow a little bit more as quite fancy an Audi a3 or slightly bigger a4 that are a couple of years older than mine? Diesel or petrol don't mind!
I think I know which makes the more sense but fancy a change.
Help.....
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If you took a loan out for £5k and paid it off over 2 years, I believe your payments would be around £100 per month (~4%). At the end of the 2 years, you would own the car outright and it might still be worth around £2k.
5k over 2 years at 4% more likely to be around £225/monthOriginally Posted by vagabond
I would borrow money to pay for the car and keep it. Given the low mileage its got plenty of good life left in it.
Whichever way you dress it up, running a new car involves high depreciation costs, with PCP that’s what you’re paying for. At the end of the deal you own nothing and if you keep running cars on this basis you never will.
Once you get out of the high depreciation stage by running an older car you can afford to save money for its replacement, which may not be new but it’ll be yours. Running cars in the 3-7 years old range is far cheaper overall, provided you don’t mind forfeiting the (questionable) kudos of owning a newish car it makes sound financial sense. If you don’t do much mileage the case becomes even more compelling.
PCP is OK if you’ve got no money but crave for a new car.......but once you’re hooked in its hard to get out. If you can afford to run a new car and replace it every 3-4 years PCP might still be a better alternative than tying up your own money, but whichever way you look at it you’re paing the rate of depreciation if a new vehicle. After 3 years a new car is worth 40-50% of new price and only one person’s paying for that......no prize for guessing who!
Last edited by walkerwek1958; 26th April 2019 at 10:39.
Apologies to the OP, yes you're right - should be more like over 5 years to get a monthly £100 payment. At that point the car will be 8-9 years old and should still be worth £2k (assuming that diesel hasn't completely bombed by then!)
Best second hand car in the world you can buy is usually your own car at the end of the PCP.
Like others have said take out a loan for about 3.6% from first direct or Sainsbury's and keep it unless there's a specific reason why you want something else.
Yep keep your car , save hard and pay the loan off quickly, shop around for a personal loan though you may get better than 3.6%
Cheers for the input guys. Think I know the answer but doubt always creeps in!
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Personally if the only options are buy it or buy an audi I'd buy the seat. My last pcp was for a kia ceed which I bought - mainly because I (well my wife) now has a car with a manufacturers warranty that we own outright.
The other thing I'd point out is that if you are doing that low a mileage a year then a diesel really isn't what you want (unless you are doing very few high mile journeys - in which case carry on) - if you are only doing low mile journeys then the car won;t get up to a high enough temperature, this won't allow the DPF to regenerate and also won;t burn off the carbon deposits from exhaust gas recirculation, I've no idea how prone to DPF and EGR failures the VAG 1.6tdi engine is but certain engines if driven in this manner can have catasrophic engine failure (mazda is known for diluting it's engine oil with diesel to the point of it being unable to stop running) - did a quick search - there is a sniff of dpf issues with this engine so I'd seriously consider a petrol engine if you are doing frequent low mile journeys now.
It will be cheaper to replace the DPF every year than change the car. As long as the car does regular longer trips ie 25 miles plus the DPF will be fine , its not how many miles you do a year its how long the journeys are
3.3% looks best here:
https://www.moneysavingexpert.com/lo...ersonal-loans/
or how about purchase credit card @ 28 months 0% interest ( subject to having good credit score ) and end of 28 months move onto a 0% fee free balance transfer card for another 22 months @ 0%, and so on , takes a little bit of time and keeping on top of, its how I have had 10K in watches for 0% over the last 3 years and just done it again with the latest. not paid any interest on any money I have borrowed in last 8 years, in fact at one time when interest rates were good I made money. :-)
What's the trade in value of the car? Is it worth buying it to PX on an Audi.
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Yep as I said it’s the journey length that matters.
The thing is though that a failed DPF or EGR can cause other more expensive damage in extreme cases it can totally destroy the engine - see mazdas 2.2 Diesel engines that diluted the oil so badly some actually were able to run on their own engine oil hence be unable to stop and destroy the engine once the oil ran dry.
Personally if I was doing mostly short journeys and didn’t have the space to charge an electric car I’d go petrol or hybrid. But whatever floats your boat.
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How much is the car worth if you were to try and buy one of that age mileage spec colour on autotrader?
Weekly 'Italian Tune Up' is advisable.
When you look long into an abyss, the abyss looks long into you.........
Is the car worth the 5k you have to pay for it?
If not, and if you get bored and decide you want a change after a few more months, then you have to factor in that loss.
Not a bad way of doing it provided you can find the fee free cards in the first place, stay on top of it and don't mind the hit to the credit rating that comes with consistent credit card debt (especially if above 50% of allowed CC debt).
Pop the reg in on the website - that’s a worst case scenario and will help see if worth the 5k
I’d keep it
Hi can you arrange for me to borrow £100k please? According to your figures I’d only have to pay back £48k of it.....
I've just borrowed 5k over 4 years and it works out at about £111/month. Zopa, Tesco, Sainsbury and Hitachi were all about the same +/- a few pence.
I'd borrowed from Hitachi before for a watch, so the transaction was quick and painless.
that's where i looked for a loan, also pension tips.
Absolutely right.
PCP enables a lot of people to drive cars they can’t afford to buy.
That’s why the roads are awash with cars 5 yrs old and under, mainly White German cars lol for the same payment as a Ford Focus or Vauxhall Astra.
By the way I drive a white C220....
super, yes all about being organised and never failed to find a suitable card yet in 8 years (research), and if you keep up payments I found it never hit my credit rating in fact it built it I have a Experian excellent score which qualifies me for the best rates & never been refused application. . but its not for everyone I agree.
Sadly thats not how it works , steady speed is best but dpf issues are over overstated especially on VAG diesels as they are pretty good but everyone knows someone who knows someone with a horror story
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