You're comparing the new price here with a 2 year old car in the UK? This has already been discussed on another thread and I think there is broad agreement that you can save, on average, between 20-30% on the price of a second hand car if importing from the UK but it is not without risk so I think it's best to compare like with like when showing these examples.
Firefly I presume this new idea is American in origin. Nowadays it's all about keeping people constantly in credit.
Until my current car I always bought second hand. It's a tiny car, (known to you as an Suzuki Wagonlit) I mentioned it years ago on here, but it made sense to me to purchase outright. Cars are much cheaper here and I paid a deposit and borrowed the rest from the garage at zero interest over about 3 years. Now 11 years old and going strong with only 65K on it. I only borrowed because of the zero interest, that's a no brainer. Best financial advice I can give to people on here is that this PCP is to be avoided unless someone supplies figures, guaranteed ones, not future this or that. And then we can do the sums. Also people currently paying off their cars, and of course most people have to borrow, is that they put some money aside for the future car purchase.
Does your wife have a company car, is that what you mean?
Exactly. The salesman in his shiny suit will have many shopping trips to New York in the meantime.
When the biggest selling car in the country is a 30k+ Hyundai Tucson you know there's something wrong. It should probably be a Ford Focus / Opel Astra...
also the dealers will want to get people onto more PCPs so notwithstanding the fact that a similar car can be imported from the UK more cheaply, it will be in their interest to prop up the residual value.
i am half way through a second one, the equity left after the first one (one an audi, circa 45k) meant i didnt have to present any additional deposit on the second one and got a new better specced car at around the same monthly cost.
Am I misunderstanding your point. You think throwing away 4K or more likely 8K, is nothing?
And you did not give us any example, you singularly omitted actual numbers.
So here goes:
Car 1: Cash price (as versus)
PSP Price
Deposit
Trade in value
Car 2 - ditto
And what have you got now and how much did it cost you.
I think this is the key to these deals.Instead of buying the car outright when the three years are up, most people buy another car
Several posts later and I'm still not much the wiser about GMFV. As I see this the dealer has covered himself by giving this minimum value once the car is returned but it it could be significantly less than the Open Market Selling Price as determined by Revenue. If you only get the GMFV then there is no surplus equity to use against another new car. You are completely at the mercy of one garage as to what they give you when you bring back the car.
So the garage gave you more than the GMFV? How much more and how did what they offer you compare to the Open Market Selling Price as determined by Revenue?
What does half way through mean?
What equity
You remind me of a poster a long time ago on here. His wife I think it was came on here. He was on about car 5 in as many years and now owed 70K. I don't have the full gist of it, but something along those lines. For him it was all about the latest model the latest spec etc.
Westin is right. So we'll have people rolling over the PCP's a couple of times and then they will realise that they can't continue and that they've overpaid. Massively.
if you believe the car to be worth more you are free to purchase at that price and sell it on.
Lets say for argument the garage offer you 15k but you think you could get 18k. You buy the car from the garage and all going well you now have 3k in your pocket. Would you mind explaining your options then? I see 2 options (1) buy something crappy for 3k (2) come up with another 7-10 grand for a deposit for your next PCP car and the cycle starts again.
This is our only family car and purchased as i wanted something hassle free.
... the cars generally come with service packs and a warranty that covers the period.
I bought a 3 year old car. It's now 9 years old and has never failed to start or broke down. Even if it had broken down 2-3 times it would still not be worth while to pay the premium for a new car. My opinion of course.
the key is to minimise the depost
i didn't realise i needed to explain everything to you in minute detail,
i dont have the exact figures to hand but a summary that isnt a millions miles off is as follows:
Car 1 - bought new, retail price 47.5k, sales price to me 45k. Deposit 10k monthly payments including servicing plan was 460 something like that. GMFV something like 20k at the end of 36 months .
At the end of month 36 i could hand the car back, buy it for 20k or trade it against a new PCP deal.
In actual fact i traded after 20 months or so to a new car, retail 50k, sale price to me maybe 45k. Extra deposit 0, monthly payments including the service plan around 490 GMFV a little higher maybes 21.5k
The newer car had a lot of extras the original one didnt.
the figures are off the top of my head but they arent too far off.
This is our only family car and purchased as i wanted something hassle free.
To be clear every car i had prior to that was at least 5 years old (tending to be s/h high performance BMWs mainly) but running something like that as an only family car didnt make sense, as well as that there was nearly 2k tax a year to pay for, expensive tyres, expensive repairs if anything goes wrong.
i never said throwing away 4-8k was inconsequential, rather it isnt the armageddon that you seem to imply. The
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