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Discussion Starter · #1 ·
Apologies for a topic that may have been covered many times....

what are the pros and cons of pcp v outright cash buying?

those who do and have done either, what were you reasons?

We usually keep our cars for ages and for once in my life I can afford to buy the Tiguan I want “for cash”. And we would see ourselves not wanting to change it for at least 5-6 years

with this in mind... what Would I gain by doing a PCP?

Please educate me And thanks in advance for the replies.
 

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I'd be interested in the answer as well. If you've got the cash, surely you'll be better off by not paying interest?
Taking into account that you sign up for finance to get the deposit contribution then cancel the agreement and pay off the balance when you get home!
 

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I'd be interested in the answer as well. If you've got the cash, surely you'll be better off by not paying interest?
Taking into account that you sign up for finance to get the deposit contribution then cancel the agreement and pay off the balance when you get home!
I've done exactly this with 2 VWs in the past year including a Tiguan.
I got a £1750 finance deposit contribution which I withdrew from and settled the full balance the day after I collected the car,cost me £4.25 in a standard daily charge (according to VW) for 1 day of the agreement and got to keep the £1750.
To me it was a no brainer taking a finance agreement to save an extra £1750 rather than agree a cash purchase from the start.
 

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If you can afford to pay 100% in cash well done! But buying with PCP as mentioned does get you the manufacturers contribution and sometime dealers topup.
 

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When interest rates were diddly squat if you've got the money you might just as well pay the whole lot having first taken the finance deposit contribution. But, now that money can be invested at much better rates (and rising) is it such a good idea or will the APR on finance deals now start to increase as well?
 

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I bought mine cash. I bought cash as I intend to keep it for a number of years. I asked about going PCP for the manufacturer contribution and then cancelling and was told, by my dealer, that the difference in manufacturer contribution and dealer discount, (at the time I bought mine 2/21), was negligable. Including my part ex, I got around £5.5K off list price, paid a flat £28K for my Elegance. Oh, and from placing the order to collecting the car was approximately 5 weeks.
 

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I’m in same position as u. My car arrives in next month, considered the flexibility of pcp but it doesn’t make sense financially for me as the extra amount in interest cost totally decimates the huge discount I’m getting in car to begin with. I intend on keeping car for minimum 6, max 8 years. I am getting dealer deposit contribution on a cash deal do have no incentive opting for pcp even if I was paying off immediately.

However, I will opt to pay one 3rd with cash from old car sale, put some in from savings and take a car loan out for the rest and pay that off over 4 years. It will cost me about 1500 in interest. That amount of interest in palatable for me in exchange for the flexibility it allows for keeping my cash savings even though I could quite easily pay for it.
 

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Allspace R line 245 Tsi 4motion DSG
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Previously I have leased. It suited me at the time to do that and I managed to pick up some bargain deals which meant I was paying less than the depreciation over the period of the term I had them for.
This time I did a huge amount of research and have gone the PCP route. I can chop it in early (as opposed to the lease) if I wish, but I am protected a little bit if the absolute bottom falls out of the used car market for ICE cars in 4 years time (see Balloon payment) .The Allspace I collected on Wednesday was listed at £45k on the road. Going through Drive the Deal and taking the PCP finance (with £3k VWFS finance and £5k dealer contributions) the On the road price came to £37k. With a sizable personal deposit the outstanding payments are low and as such the interest on the remainder isn't too painful.
Put simply if I didn't take the PCP option I wouldn't have been able to afford the car I have. Over the term though I absolutely can afford it. The Balloon payment in 4 years time is £18k, which I may end up paying if I haven't already chopped it in for something else. Who knows?!?
I get what everyone else says above, but it's a personal choice and one that must fit your circumstances.
For me this works out perfectly.

All the best with your decision making.
 

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Previously I have leased. It suited me at the time to do that and I managed to pick up some bargain deals which meant I was paying less than the depreciation over the period of the term I had them for.
This time I did a huge amount of research and have gone the PCP route. I can chop it in early (as opposed to the lease) if I wish, but I am protected a little bit if the absolute bottom falls out of the used car market for ICE cars in 4 years time (see Balloon payment) .The Allspace I collected on Wednesday was listed at £45k on the road. Going through Drive the Deal and taking the PCP finance (with £3k VWFS finance and £5k dealer contributions) the On the road price came to £37k. With a sizable personal deposit the outstanding payments are low and as such the interest on the remainder isn't too painful.
Put simply if I didn't take the PCP option I wouldn't have been able to afford the car I have. Over the term though I absolutely can afford it. The Balloon payment in 4 years time is £18k, which I may end up paying if I haven't already chopped it in for something else. Who knows?!?
I get what everyone else says above, but it's a personal choice and one that must fit your circumstances.
For me this works out perfectly.

All the best with your decision making.
You're absolutely spot on about personal choice,something which suits one person may not suit another.
One thing is for sure is Drive the Deal had some amazing discounts,unfortunately now cut back considerably going forwards.
I got £1750 VWFS contribution plus a little over £6k via DTD at point of order which had risen to around £9k DTD discount against the list price when I actually received my car 9 months later so a saving of close to £11k which was ridiculous and one of the reasons I never cancelled the order.
Looks like the sort of discounts many of us got are things of the past for now.
 

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Bought PCP because that’s the only way I can afford it. Even if I could afford cash then I’d take finance for the contribution then pay it off.
 

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Bought PCP because that’s the only way I can afford it. Even if I could afford cash then I’d take finance for the contribution then pay it off.
I used to pay for my cars outright some years ago but now I go down the PCP route as it suits me just fine, when I was in sales for VW I used to get a few customers wanting to pay cash for the car they wanted and then I offered the option of a finance deal and explaining the pros and cons attached to both such as a deposit contribution and a service deal then I was up to them to choose what was best for them, me personally regardless of the interest VWFS charge I will not buy a car outright for I like to change the car often, plus I will not spend all of my money in one go on a depreciating asset so I keep it in the bank for any unforeseen eventuality especially now in the current financial climate,I’m not hell bent on saying I own the car like some and I agree with all of the above it’s purely personal choice.
 

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I have always had loans payed them
Off kept the car old school I guess. But this time I went pcp thinking in five years my loan finished car not brand new be old not worth as much so change my thought process get a new one on pcp every three to four years until I retire then keep the last one. But we all different which is right I don’t know but historically cars lose money over time.
 

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I've always had PCPs, got to break even and changed my car. I receive a car allowance from work and there are criteria relating to age of the car to continue receiving payments.

I made a hash of my PCP set up on my previous car and faced a hefty mileage penalty, I decided to do a voluntary termination at the midpoint and managed to dodge the excess mileage costs (around £3K).

My current car is a lease, this was purely down to cost at the time, I got a cracking deal and factored in my mileage correctly (or so I thought). Covid then arrived and I have a term lease on 45,000 miles and I will have done around 12,000 - I'm guessing that's payback for dodging the excess mileage charges on my previous PCP!

My lease is due to expire February 2023 and I've gone PCP this time, 2 reasons. Firstly cost again, a similar lease would be around £200 a month more when deposit was factored in along with an increased monthly cost. Secondly I'm getting on a bit and I may as well start to accumulate some benefit in the form of trade in value for a PCP when work are paying. I'm also moving on to the point where I pack in work or go part time within the next 10 years (fingers crossed). My plan is to complete the 4 year PCP and also hopefully save enough to pay the balloon at the end of 4 years.
 

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I agree with others, this is all down to personal choice and individual circumstances.

I usually pay outright for the car (might take out a PCP for a day or so to benefit from a dealer or manufacturer contribution of course). I am looking to change my car this year and am just waiting to test drive the new BMW X1 mild-hybrid which should be available around August (dealer hopes) before making my final decision (looking at mild-hybrids and PHEVs). I think this time I will be looking at PCP simply as I am protected if the price collapses on ICE cars (accepting that a hybrid vehicle has ICE) due to future fuel or road tax prices and uncertainty with the second-hand market as we get closer to 2030 (agreeing with mrew42's comments above).

I think I should be OK with a hybrid but who knows, we live in interesting times.
 
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