How was your Golf bought?

[dubber36]

Has anyone considered going without a new car to replace your current one when you get to the end of the deal and if on PCP, paying the settlement figure and keeping it? If you've had it from new, you'll know where it's been, so it's not such a lottery that buying a new car could be.

The reason I ask is that I upped my mortgage payments by what most pay monthly for a PCP on a new car a few years back. It took years off the term of my mortgage and it got paid off in no time. Now with no mortgage to pay and having being used to finding £££s each month, putting money aside for nice things is not such a strain.

[clubsport]

Cash has it's advantages.... If a private seller wants to buy out of their contract, a genuine cash transfer can be advantageous and the provider liquidity may also get a deal.

I know that's what I did!  

[fredgroves]

Has anyone considered going without a new car to replace your current one when you get to the end of the deal and if on PCP, paying the settlement figure and keeping it? If you've had it from new, you'll know where it's been, so it's not such a lottery that buying a new car could be.

The reason I ask is that I upped my mortgage payments by what most pay monthly for a PCP on a new car a few years back. It took years off the term of my mortgage and it got paid off in no time. Now with no mortgage to pay and having being used to finding £££s each month, putting money aside for nice things is not such a strain.

Thats assuming two things:

1) You have the cash for the final balloon payment
2) That the PCP interest rate is more than your mortgage interest rate. If it isn't then you are actually better served using whatever cash you have to pay a lump off of your mortgage.

Always best to use cash to relieve the highest interest loans you have - credit cards being the main menace!

This is my first ever PCP car. In fact its the first car I've had on any finance at all (I've driven company cars since the year dot and only bailed now because HMRC have finally cranked the tax up to the point at which its simply not cost effective to drive a company car, unless you want a milkfloat!).

Jury is still out with me on whether purchasing a possibly faultness, or at least "known quantity" at the end or not. Lots of factors yet unknowable about that for me yet - but it will largely depend on just how little over GFV I can get for it at the end of 3 years (either as a VW tradein or selling it privately). If its really rock bottom GFV, maybe purchase and keep another 2 years might be an option worth doing. I'm certainly not about to end up paying another deposit on PCP if I've just effectively lost the last one.

[Mike J]

Cash!
But then Im going to keep it for atleast ten years when I will trade it for a eco dsg whatever.

Cash combined with WOW competition gave me a huge lever which I used to obtain a decent trade-in price, a big discount off the new car and get plenty of free add-ons like rubber mats, boot liner, etc.

The best thing about leased cars is their drivers are more likely to look after them resulting in them being far more careful when they open their doors!!

New Years good wishes to all, especially the Forum owner.

 

[Moro]

I was a cash buyer too in 2013, as money in the bank is constantly depreciating in real terms and I have no need to retain it for other purposes as I am now retired.

In the past I have bought cars under business lease in the 90’s when it was tax efficient and later on PCPs or loans. In these cases the cars were doing about 20k miles each year and a replacement every 2 or 3 years seemed reasonable and sensible. If you wish to keep a car long term (I put the 5 year warranty on my GTi and see myself keeping it much longer as it only does about 4K miles each year) then paying the interest on a PCP and then the balloon payment makes no sense.

However, I entirely see the point of a fixed price 2 or 3 year agreement where you don’t have to guess the residual at the end if your intention is to keep owning a newish vehicle. Sometimes I bought a car outright or using a loan only to see the residual tumble by the time I intended to sell and replace which would have made a PCP better...and other times I think I won. It is a gamble.

Interest free credit is always worth taking, as I did on my other current car (Citroen C4 Cactus - don’t laugh, it has been incredibly unreliable) as when taking the 3 year interest free deal this gave me an extra £500 finance discount...although perhaps on balance I should have done the PCP and handed it back in a couple of months time as it is such a PoS.

[Richyb]

Interesting reading people’s opinions on this subject.

Over the years I’ve bought cars for cash, on HP and PCP, both used and new.

In my opinions it’s what best suits your needs at the time.

My current car is used on a PCP but for less than 5%. I would never sign up to a PCP on an interest rate that was significantly more than that. For most used cars PCP interest rates are 9% plus which is madness.

When I buy a car I only ever work out how much the car will cost me each year on average for the period of time I plan to keep it. When I get rid of it I then look at what it actually cost me for the past x years. The figures are usually not too dissimilar.

I would only ever PCP if I was in a steady job with other comfortable commitments however.

[RAIDEN]

Been a interesting read this.  I would always say cash is best but in reality most of us don't have that kind of money laying around.  Last few cars I bought I paid on a interest free credit card and just make sure I stay disciplined with the payments.  Good thing that is way is if I have a good month I can overpay or if money was tight pay a bit less.  It's worth asking your credit card companies (if you have good credit) what offers they have and what your limit can go up to?  Also if you want the cash some of them like MBNA can transfer the money to your account and its interest free for 12-24 months

[Bungleaio]

Mines on pcp as that's what was best for me at the time. I purchased it with the intention of keeping it for at least 5 years so I will be paying off the balloon when it gets to 3 years old in October. I put the maximum deposit in possible and the monthly payments are covered by a car allowance from work. I've been budgeting for the balloon right from the start so once it's paid off I'll continue to bank all the money and see what the situation is when the car is 5 years old and out of the warranty.

Overall it's cost me extra to do pcp but I'm happy with my decision. I've ended up with an amazing car which I still love driving now as much as I did when I drove it out of the showroom.

This is the first car I have ever ordered to my specification and also the most expensive car I've bought. The only thing I can think to replace it with is another gti but I won't gain anything other than some styling tweaks and a lower number on the odometer so there's absolutely no point in doing that.

Also since I bought the golf I've restored my classic mini and passed my motorbike test.  If I hadn't gone for pcp I might not have had the liquid cash to allow me to do this.

Pcp might not be for everyone but it was right for me and I'm happy to have paid the low rate of interest to use it.

[fredgroves]

5 year warranty? It's only 3 in the UK...

[Guzzle]

I think he simply means it'll be out of warranty when swapped at 5 years old, rather than under 5yr warranty???