Off Topic Free money...

[StevenRB45]

Whatever way you cut it its the dealer that benefits, they get the commission on the sale/finance, and on pcp a guaranteed low mileage (who wants to run up a mileage penalty?) fully maintained second hand car to sell at a mark up in two to three years and commission on its replacement as well.

 

[Most Easterly Pandas]

Cars only depreciate when you sell them though.

No it isn't. Still applies if its written off etc.

 

[306maxi]

OK, but that's fairly uncommon. I'm not going to go spending thousands to offset the small risk of my car being written off and then incurring depreciation!

 

[scout]

I used the scheme as I went to buy the car outright for cash, but was offered the PCP, which made sense as I was able to keep my cash in the bank earning interest whilst borrowing money from Fiat at 0% - simples!

I think that the reason there are so many 500 owners using PCP's is that effectively this has been Fiats method of discounting the 500 via finance deals and not cash discounts on list price. This has been good for all 500 owners as it has helped maintain strong residuals, however outright cash buyers are effectively subsidising the low rate finance deals. The Panda on the other hand has always been available with good cash discounts for outright purchase and is less expensive generally too.

:yeahthat:

I have bought my 500 on PCP. It worked out cheaper to do that (and save the money for the baloon payment seperately) than taking out an HP agreement or bank loan. I do think a lot of people go in with their eyes closed but if you do the sums and make sure you have the baloon payment sorted then its just another credit agreement (which Fiat discount heavily). My 500 will not be going back after the PCP term as I intend to run it for a good few years yet . I am possibly the worst customer as I have found the cheapest way to finance my new car and don't want to replace it anytime soon .

 

[Super Uwe]

So let's just clarify this thread for anyone who is confused:

People who take out PCP agreements and want to swap their car every few years - idiots who are almost certainly going to burn in hell for their crass financial incompetence.

People who like to buy their cars and run them forever - wonderful people, the salt of the earth. If you are ever in their presence you'll probably notice a lovely smell of meadows as well:worship:

Simples.

 

[306maxi]

Where did i say that?

 

[Super Uwe]

Where did i say that?

Well nowhere directly, obviously. But I am afraid there is a tone of superiority running through your posts whenever this topic comes up - that somehow the way you have done things is so much better than anyone else.

As I have said in other threads recently, whatever people choose to do is up to them - there is no right or wrong in my opinion. And I would agree that, pound for pound, you will more than likely be in a better financial position over a longer period of time than someone who keeps changing their car every few years (particularly given that the 1.2 500 doesn't seem to have any massively expensive inherent issues).

But I think what you consistently fail to see with these agreements is that there is much more than just a financial element to it. For me personally, having a young family means that I value the idea of having a newer car as it will generally (and I mean very generally) have superior safety features to an older car. Of course, that won't ever stop me from being involved in an accident, but it does at least provide some reassurance in the back of my mind that I am not driving a potential death trap on the roads.

Secondly, our PCP agreement meant that it was a doddle to swap from a 500 to a Panda when our son was born. I am not necessarily saying that this is the cheapest way of going about things, but it was certainly one of the easiest. I didn't have to fart around trying to sell my car in the local rag etc, it was just done and dusted.

Maybe my overall problem is that I am just too lazy for my own good! But that is another argument entirely...

 

[306maxi]

Do you rent your home appliances or buy them outright?

 

[Ulpian]

I actually know someone who rents them, but they are going to leave Britain soon and in their particular circumstance it makes sense. It saved having to trawl around looking at second hand ones and getting those installed, and then sold.

I've thought long and hard about car financing and come to the conclusion that there is no cheap way. Perhaps an old banger for a couple of hundred sold on after a year is a good way, but it's a huge gamble, and hardly safe or reliable. And it's work.

Buying outright can work well if you have the cash or can get a small loan very cheaply, you might get more discount if you have this 'cash'. And PCPs work for those who like everything taken care of and want a new car every few years, for a fixed price with no surprises. Peace of mind and convenience have to be worth something.

My car is paid for but I expect surprise bills, I just hope they aren't too big.... and so the equation, and gamble, continues.

 

[dave]

People who like to buy their cars and run them forever - wonderful people, the salt of the earth. If you are ever in their presence you'll probably notice a lovely smell of meadows as well:worship:

Simples.

it seems if you can keep a car until its about 25 years old or more then its value will start to go up:idea:

 

[Super Uwe]

Do you rent your home appliances or buy them outright?

Well I buy them outright, as would most people I guess. Some might buy expensive fridges etc on finance, but I have generally just stumped up the cash for a telly, fridge etc as they have only been a couple of hundred quid.

What are you getting at?!!

 

[Melanabb]

it seems if you can keep a car until its about 25 years old or more then its value will start to go up:idea:

Prime example!

 

[scout]

When all things are considered a bargin is only a bargin if you were going to buy the item anyway.

I found the best way to buy my new car just as others have found the way that suits them. Hopefully they go in with their eyes open and have considered all the options. Because of different interest rates my car will cost about £1500 less on PCP than HP and even more than a bank loan, the only thing that you need to remember is to 'save' for the baloon payment.

My mother recently purchased a Honda Jazz, she was going to buy it outright and agreed on a purchase price but after talking to the salesman she ended up taking out an intrest free loan. She got the same car for the same price and the same value of trade in, but kept her money earning for a little longer, which is always good.

 

[rossocorsa]

I would still maintain that PCP is not the cheapest way to finance a car you just end up paying out more without realising it but if you must have new every three years I suppose it is not too bad an option. Buying new is also a bit of a mugs game I suspect you can buy nearly new on a bank loan for similar monthly cost to new on a PCP difference being someone else had took the initial depreciation hit and at the end of the loan you will own the car which by that time will only be marginally less valuable than the slightly newer one bought on PCP.

 

[306maxi]

I would still maintain that PCP is not the cheapest way to finance a car you just end up paying out more without realising it but if you must have new every three years I suppose it is not too bad an option. Buying new is also a bit of a mugs game I suspect you can buy nearly new on a bank loan for similar monthly cost to new on a PCP difference being someone else had took the initial depreciation hit and at the end of the loan you will own the car which by that time will only be marginally less valuable than the slightly newer one bought on PCP.

With the 500 there is no massive amount of initial depreciation like with other cars.

Like you say, if you need a new car every three years then PCP is fantastic, you can walk away at the end and all is good. But who ACTUALLY needs a new car every three years? A well treated car which you've owned from new and maintained properly can be every bit if not better than a new car.

 

[rossocorsa]

With the 500 there is no massive amount of initial depreciation like with other cars.

Like you say, if you need a new car every three years then PCP is fantastic, you can walk away at the end and all is good. But who ACTUALLY needs a new car every three years? A well treated car which you've owned from new and maintained properly can be every bit if not better than a new car.

I think the habit of a new car every one to three years stems from the 70s when cars were half rusted away at five years old

 

[scout]

I would still maintain that PCP is not the cheapest way to finance a car.

The cheapest way to finance a car is cash but when I was buying mine the next cheapest way was PCP and saving for the balloon payment. I sat down with the figures and worked it through for all options. I am using PCP as a form of HP. I always keep my cars longer than 3 years, the wife's Honda was bought new seven years ago and is still going strong with no intention of changing it anytime soon.

 

[stu0710]

I would still maintain that PCP is not the cheapest way to finance a car you just end up paying out more without realising it but if you must have new every three years I suppose it is not too bad an option. Buying new is also a bit of a mugs game I suspect you can buy nearly new on a bank loan for similar monthly cost to new on a PCP difference being someone else had took the initial depreciation hit and at the end of the loan you will own the car which by that time will only be marginally less valuable than the slightly newer one bought on PCP.

If you read some of the posts above - it can actually be cheaper, particularly so when a dealer / fiat pays towards the deposit and you then get 0%, interest free credit with no charges.

 

[306maxi]

If you're getting 0% then pcp makes a lot of sense if you pay the balloon payment

 

[rossocorsa]

If you're getting 0% then pcp makes a lot of sense if you pay the balloon payment

Maybe but there will, of course, be a substantial finance subsidy involved (I would guess up to 15% of the financed sum) so there may well be bigger discounts available at times when the 0% is not on offer. And they can't offer discounts for not taking 0% as it's not legal to do so