First. Ignore the dealer quoting monthly figures. Hammer out a deal based on list price -discount, then look to finance that amount... they'll shaft loads of people with headline monthlies with little or nothing off the car.
Ignore everything you think about PCPs, and purely think of it as renting a car.
You get a brand new car, to your spec, with a full warranty and 12 months tax. All you do is drive it, adding insurance, fuel and consumables, which every car uses.
At the end of those 3 years, the worst case senario is you hand it back. It may be worth an extra 1-2k selling private, the dealer may offer an incentive to trade it back if it's clean... who doesn't want a nice 1 owner used car to make a load of profit on?
It's a fixed price gamble. Sure it's 'cheaper' paying cash, but when interest rates on PCPs are less than 5%, if you're prepared to do some calculated risk taking, you can use your capital to make you more money.
For example. my car was £29300 (after discount). I happen to have a similar amount of money in my shares pot, and last year I made 14% on it.
Should I have bought my car cash, risked the market bombing and its used value in 3 years being nothing. Or, should I rent the car, have a GFV of £16500 no matter what and use my capital to offset the cost of the PCP?
I know which one my head told me to use....
Oh, and for those playing the 'I prefer to own my car'... you don't have mortgages or car loans then I assume?? You may think you own then, but try defaulting for a few months and then see who really owns them.
Tips:
Ensure deposit is as small as possible, it exposed you to less risk should you have to bail early.
Ensure GFV is realistic.
Ensure you stay light on the options, it's pretty much dead money in a PCP
Keep mileage limit as low as possible, why pay upfront for mileage with interest on top? Sell privately if you go significantly over.
Never, ever skint yourself to own a car. They're not worth it.
