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Car hire purchase or finance
RodneyCharltonTrotta
Posts: 14,827
Have only ever bought cars outright but need a new one and am considering other avenues such as hire purchase or finance.
Any recommendations of what to consider and things to be mindful of with either option as completely green on it.
Cheers
Any recommendations of what to consider and things to be mindful of with either option as completely green on it.
Cheers
0
Comments
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This bloke can sort you out, Rodders.3 -
I have only had leased cars for the last 20 years.PCH = personal contract hire: you will have the car and it will go back after the agreed lease period is up.PCP = personal contract purchase: you will have the car and pay monthly instalments without owning it, then at the end of the lease period you will pay a lump sum to buy it.I prefer the first option, usually have 3 years and get it collected a few days before the MOT is due.The monthly figure includes road tax.
There will be a set-up fee of approx £300.
You can choose to have service/maintenance included - but I prefer to arrange this myself.Most new cars come with 3 year warranty and breakdown cover included.Currently I have a Qashqai (£340 a month) and a Corsa for my son at (£200 a month).Over the years I have done all the calculations (outlay vs depreciation in value) and always found there is little or no difference. Once you get your head around the fact that you don’t own it and it’s not forever, then it’s plain sailing. Good luck.4 -
BB Jnr has just bought himself a nice Merc on finance against his miserable old dads advice but his view is he earns the money, he can afford it, so i can do one.Fair enough i suppose.4
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I’ve now had 6 cars on PCP and can’t see the point in actually owning a car. They are new, fully loaded with kit, under warranty and would basically cost a sum of money to buy at the start that makes no sense to hand over whether I could do so or not - ie, that money is better in my bank account than theirs. It all comes down to the figure you have to pay each month and you can always push on that to make it work with the one you had in mind.1
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My wife currently has a Hire Purchase Agreement on the car that she's got on finance. Once she's paid off the final monthly instalment the car is hers next year.
She used to have a PCP, the trouble with that was she had to ensure she didnt go over the mileage that had been set at the beginning of the Contract, she then had a choice at the end... Give the car back, and get a new one... Or she could pay a lump sum (was about 1k) to buy the car outright
When she looked into the first option, they checked the car over, any chips etc. from Motorway driving and they'd reduce the value of the vehicle that they were taking back etc.1 -
You're mixing up your characters.Off_it said:
This bloke can sort you out, Rodders.3 -
Depends if you want the car for just the lease period then choose another, If so it's cheaper monthly payments. If you want to hold on to the car then HP.
I think leasing has become the preferred option since cars have become so expensive, as once you go over £500-1000 pm it's like having a second mortgage!
Plus the car industry like it as it maintains car churn, previously people would hold on to their cars (especially now they are more reliable and less rusty), with leasing, "punters" are back in the market after three years, and there is a ready supply of three year old used cars for the auctions/dealer network.1 -
BTW if anyone had a PCP argeement prior to January 2021, you may have been ripped off. The FCA are investigating. In short, the brokers (that is the car dealers) boosted the rate of interest payable in order to get higher commission from the lender. More detail here https://www.theguardian.com/money/2024/jan/11/car-finance-what-is-the-fca-looking-into-and-will-people-get-money-back2
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I'm on my second lease car. We don't do a great deal of mileage and came in under the annual mileage on the first car, this then increased the residual value of the vehicle when we moved on to the new vehicle.1
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That ‘mileage’ number and ‘vehicle condition’ isn’t necessarily the hindrance that you and your wife think it is if she’s trading it in for her next motor. The Dealer will always want to buy your car and sell you another, that’s how they make a living. That’s a great position for you to start from. They can suck in as much air through their teeth and come up with whatever figures they want, you just steer them back to the basic reality of the fact that they want to buy your car, sell you another, sell you another PCP contract, that your only interest is what it’s going to cost you each month and there’s always room on the numbers to achieve that. You can always walk away if they can’t do anything on the numbers, there will always be someone else that will. The internet is your friend, have your phone in your hand and helpfully google car numbers, new car costs, car values etc if they tell you a number that’s the best they can do.ForeverAddickted said:My wife currently has a Hire Purchase Agreement on the car that she's got on finance. Once she's paid off the final monthly instalment the car is hers next year.
She used to have a PCP, the trouble with that was she had to ensure she didnt go over the mileage that had been set at the beginning of the Contract, she then had a choice at the end... Give the car back, and get a new one... Or she could pay a lump sum (was about 1k) to buy the car outright
When she looked into the first option, they checked the car over, any chips etc. from Motorway driving and they'd reduce the value of the vehicle that they were taking back etc.2 - Sponsored links:
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Sorry, but anyone who thinks hitting the bar isn't "closer" to scoring a goal than a pea-roller that barely makes the keepers arms doesn't get an opinion.golfaddick said:
You're mixing up your characters.Off_it said:
This bloke can sort you out, Rodders.
;-)
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Unless they’ve stood behind the goal in the Covered End and watched the ball go through Charlie Wright’s legs a couple of times ?Off_it said:
Sorry, but anyone who thinks hitting the bar isn't "closer" to scoring a goal than a pea-roller that barely makes the keepers arms doesn't get an opinion.golfaddick said:
You're mixing up your characters.Off_it said:
This bloke can sort you out, Rodders.
;-)
.0 -
I'm probably in the minority on this but I am totally against HP, leasing, PCP or anything else for a personal car. The rates are poor, the monthly costs I think are too high unless you go for a fiat 500 or something equally impractical
My advice would be to look at places like big motoring world, car giant etc and borrow the money from somewhere with a decent interest rate as opposed to tying yourself to finance against the vehicle.
I totally understand peoples want to drive new vehicles and if they can afford the monthly payments then great injust don't think it makes financial sense.
If you do decide to go down the car finance route, do not sign up for their extended warranties, service plans or anything like that. Any problems with a vehicle from the places I have mentioned they will sort them out, if they delay just take to twitter and you will find your issue being resolved very quickly. None of these firms want bad social media PR.
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I'll happily play a game of football without a goalkeeper if the "closest" you get to scoring is hitting the crossbar. I can then play an extra player up front who can shoot on target half a dozen times in the match.Off_it said:
Sorry, but anyone who thinks hitting the bar isn't "closer" to scoring a goal than a pea-roller that barely makes the keepers arms doesn't get an opinion.golfaddick said:
You're mixing up your characters.Off_it said:
This bloke can sort you out, Rodders.
;-)
I wonder who would win ? 🤔😄0 -
100% agree.Carter said:I'm probably in the minority on this but I am totally against HP, leasing, PCP or anything else for a personal car. The rates are poor, the monthly costs I think are too high unless you go for a fiat 500 or something equally impractical
My advice would be to look at places like big motoring world, car giant etc and borrow the money from somewhere with a decent interest rate as opposed to tying yourself to finance against the vehicle.
I totally understand peoples want to drive new vehicles and if they can afford the monthly payments then great injust don't think it makes financial sense.
If you do decide to go down the car finance route, do not sign up for their extended warranties, service plans or anything like that. Any problems with a vehicle from the places I have mentioned they will sort them out, if they delay just take to twitter and you will find your issue being resolved very quickly. None of these firms want bad social media PR.1 -
If you really see a new car as something you need or want, may be leasing is an affordable way to get the car. I'm pretty boring when it comes to cars and don't attach too much to having a nice car, although I would like an Aston Martin but a 4 door Ford is my level. So I either save up or get a loan from wherever or a mixture of both. 6 years ago I bought a 7 months old car from Motorworld for just short of 20k, that car cost 36k new, great value I think. It was the most I have ever spent on a car and for the last 4 years its been free of any monthly payments. I know if I divided the cost up I could of probably had a better car if I leased for a while but I hate the idea of not owning something and continually paying out monthly. That car has cost me nothing apart from the usual running costs attached to owning a car and if I have it another 6 years I see that as a good deal.Carter said:I'm probably in the minority on this but I am totally against HP, leasing, PCP or anything else for a personal car. The rates are poor, the monthly costs I think are too high unless you go for a fiat 500 or something equally impractical
My advice would be to look at places like big motoring world, car giant etc and borrow the money from somewhere with a decent interest rate as opposed to tying yourself to finance against the vehicle.
I totally understand peoples want to drive new vehicles and if they can afford the monthly payments then great injust don't think it makes financial sense.
If you do decide to go down the car finance route, do not sign up for their extended warranties, service plans or anything like that. Any problems with a vehicle from the places I have mentioned they will sort them out, if they delay just take to twitter and you will find your issue being resolved very quickly. None of these firms want bad social media PR.
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I've had a lease for 3 years which I've extended for another year. It was decent value at the time (about £240/month for a Honda Jazz) but I don't think I will do it again.Carter said:I'm probably in the minority on this but I am totally against HP, leasing, PCP or anything else for a personal car. The rates are poor, the monthly costs I think are too high unless you go for a fiat 500 or something equally impractical
My advice would be to look at places like big motoring world, car giant etc and borrow the money from somewhere with a decent interest rate as opposed to tying yourself to finance against the vehicle.
I totally understand peoples want to drive new vehicles and if they can afford the monthly payments then great injust don't think it makes financial sense.
If you do decide to go down the car finance route, do not sign up for their extended warranties, service plans or anything like that. Any problems with a vehicle from the places I have mentioned they will sort them out, if they delay just take to twitter and you will find your issue being resolved very quickly. None of these firms want bad social media PR.1 -
Agree mate. We've always bought our cars outright and replaced them every 3 years or so.Carter said:I'm probably in the minority on this but I am totally against HP, leasing, PCP or anything else for a personal car. The rates are poor, the monthly costs I think are too high unless you go for a fiat 500 or something equally impractical
My advice would be to look at places like big motoring world, car giant etc and borrow the money from somewhere with a decent interest rate as opposed to tying yourself to finance against the vehicle.
I totally understand peoples want to drive new vehicles and if they can afford the monthly payments then great injust don't think it makes financial sense.
If you do decide to go down the car finance route, do not sign up for their extended warranties, service plans or anything like that. Any problems with a vehicle from the places I have mentioned they will sort them out, if they delay just take to twitter and you will find your issue being resolved very quickly. None of these firms want bad social media PR.
However, as much as I like getting new cars, we don't really need them. We bought our Qashqai new, nearly 7 years ago and we've still only done just over 30k miles in it. We'll just keep it until it needs replacing now, and hopefully by then the tech on electric cars will have moved on and range & availability of charging points improved.
No chance I'll be chopping in my 54 year old MG any time soon though.3 -
Thanks all. Much appreciated 👍0
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Arfa was the original Delboy.golfaddick said:
You're mixing up your characters.Off_it said:
This bloke can sort you out, Rodders.1 - Sponsored links:
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Sorry mate, but I've read that a couple of times now and it still doesn't make any sense at all.golfaddick said:
I'll happily play a game of football without a goalkeeper if the "closest" you get to scoring is hitting the crossbar. I can then play an extra player up front who can shoot on target half a dozen times in the match.Off_it said:
Sorry, but anyone who thinks hitting the bar isn't "closer" to scoring a goal than a pea-roller that barely makes the keepers arms doesn't get an opinion.golfaddick said:
You're mixing up your characters.Off_it said:
This bloke can sort you out, Rodders.
;-)
I wonder who would win ? 🤔😄
But let's not derail the thread; Rodders has a new jam jar to source.0 -
For me, buying a new car in cash doesn’t make sense. If you’ve got spare cash savings, then put it in property or home improvements. At least you have the chance to make money back on it.
I treat a car like I do Netflix or Sky. I love my cars, I have a monthly budget, PCP it, and swap in 3 years. As long as I get my deposit back I put in then I’m happy. Onto the next one2 -
Not even about buying cash, bank loans are always better value than car finance whatever way you cut that particular cake. Admittedly I speak as someone who isn't afraid to buy and sell cars myself which I understand is something not everyone fancies for a multitude of completely rational reasons.DamoNorthStand said:For me, buying a new car in cash doesn’t make sense. If you’ve got spare cash savings, then put it in property or home improvements. At least you have the chance to make money back on it.
I treat a car like I do Netflix or Sky. I love my cars, I have a monthly budget, PCP it, and swap in 3 years. As long as I get my deposit back I put in then I’m happy. Onto the next one
The weird thing now is diesels are still amazing value when you factor everything in and ultimately they only need a decent run to clean the DPF out. The even weirder thing is there are vehicles that are bugger all to tax but not ULEZ compliant, same with a lot of ULEZ vehicles costing nearly 4 figures in tax. If you can get away without breaching that poxy ULEZ zone, go fishing in the uncompliant pond and grab a genuine bargain at the moment2 -
I'm not surprised. These companies must have massive customer acquisition costs. Just like the mattress game. I knew someone that worked at one of the mattress companies and they told me that one year they spent more on direct advertising than they made in revenue due to the competition.cafcfan said:
Models like that only work if there are one or two competitors.0 -
With the uncertainty of what will happen next regarding driving in London.
Coupled with the fact I believe we have a long way to go regarding electric/hydrogen, I am happy with old cars.
Spent a decent bit of wedge years ago on a fully loaded Audi Q5, only to find a couple of years later that diesels were nasty.
Now got a 20 year old Honda, that is good as gold. Don’t worry too much about condition, and throw all sorts from the builders merchants in it. Also handy for a run to the dump.
ULEZ compliant petrol0 -
Plus you couldn't buy their cars if I remember correctly, just lease/pcp.Huskaris said:
I'm not surprised. These companies must have massive customer acquisition costs. Just like the mattress game. I knew someone that worked at one of the mattress companies and they told me that one year they spent more on direct advertising than they made in revenue due to the competition.cafcfan said:
Models like that only work if there are one or two competitors.
And their shitty adverts!0
