The REAL COST of CAR FINANCE - PCP vs HP vs Leasing vs Bank Loans

Рет қаралды 45,846

Күн бұрын

The Real Cost of UK Car Finance. UK Car Finance Explained. We look at PCP vs HP vs Leasing vs Bank Loans as ways of financing a new or used car in the UK. Which is best for you and what is a rip-off? We also look at leasing vs PCH - what makes them different and which one offers the best value.
We look at Leasing vs Buying and the various finance options available to you. PCP deals are the most popular at the moment but they often serve the car dealers better than they serve you, we look at all the options to help you make a more informed decision and get the most value from your money when buying a new car or decent used car.
Remember that the PCP deal we are showing only finances less than half of the cost of the car so it looks a lot cheaper than the loans or HP - you will still probably need to finance the balloon payment if you want to keep the car so would need additional finance which would make it a fair bit more expensive than the other options.
I hope you enjoy it, please leave your feedback and comments below. We will be doing lots more content on car buying tips, great new and used deals and of course more on car leasing deals during 2021.
By the way, this video is made with the big assumption that you have a good credit history and can get finance from the main providers without any trouble.
Don't forget to give me a big thumbs up and smash that Like button, whilst you're at it, click on the notification bell and hit SUBSCRIBE :)
Any comments below will be answered.
UK Car Leasing Explained Video: • UK Cashback Sites - Wh...
00:00 Intro
02:20 PCH (Car Leasing)
05:38 PCP (Personal Contract Purchase)
08:00 Hire Purchase (HP)
08:50 Bank Loan
10:20 Cash Purchase
11:08 Mortgage
12:06 New Car Finance Examples
17:42 Used Car Finance Examples
20:23 Summary
22:22 Gap Insurance
24:20 I'm Definitely Not a Guru!
25:50 Outro
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Пікірлер: 188

@smjc1982 3 жыл бұрын

I'm so glad I cam across this video. I'm looking to buy a car and had no idea where to start. This was so informative and easy yo understand. Thank you so much for how you explained and broke it down.

@DefinitelyNotAGuru 3 жыл бұрын

Brilliant, glad you found it useful & thanks for the feedback - make sure you subscribe and check out my other videos 👍👌

@arslanashraf9618 Жыл бұрын

As per my understanding in pcp you can sell the car before the term ends and pay back the dealer

@alprobert Ай бұрын

@@arslanashraf9618 please correct me if I'm wrong but, pretty sure you can't as it's not your car to sell.

@arslanashraf9618 Ай бұрын

@@alprobert agreed. You are right :) cheers

@chrispierce4003 2 жыл бұрын

Very useful video thanks, and clearly explained. 👍👍

@DefinitelyNotAGuru 2 жыл бұрын

Thanks Chris

@stephenmason5682 2 жыл бұрын

Just what the general public need. Great work.

@DefinitelyNotAGuru 2 жыл бұрын

Thanks mate

@justinphilpott 2 жыл бұрын

Thanks mate, this got me thinking of a better way to finance my next vehicle. Nice one!

@DefinitelyNotAGuru 2 жыл бұрын

Thanks Justin 👍

@sweet2f41 Жыл бұрын

GREAT VIDEO! Very informative

@DefinitelyNotAGuru Жыл бұрын

Thank you

@hayleyb7969 2 жыл бұрын

Excellent video really explained the different finance options clearly to me. The car dealership was just baffling and rushed through it.

@DefinitelyNotAGuru 2 жыл бұрын

Thanks Hayley, I think some people get so excited in the dealership that many sign up to something they don’t properly understand. Always good to have some ideas before facing the salesperson 👍👍👍

@pythonguru3329 Жыл бұрын

This was really useful, thank you🚗

@DefinitelyNotAGuru Жыл бұрын

Thanks

@abhijitchowdhury3964 2 жыл бұрын

Thank you!! I am actively looking to buy a car and your video was enlightening. Most obvious choice was PCP but not after seeing your video!!

@DefinitelyNotAGuru 2 жыл бұрын

Thanks 🙏 👍

@shaunwalsh6354 2 жыл бұрын

Brilliant helps me big style, thank you

@DefinitelyNotAGuru 2 жыл бұрын

Great to hear! thanks Shaun 👍

@DavidBuxton-sb9sy 9 ай бұрын

Interesting stuff. Very informative.

@DefinitelyNotAGuru 9 ай бұрын

Thank you Sir

@adowamensah6944 2 ай бұрын

Very useful information. Thank you

@DefinitelyNotAGuru 2 ай бұрын

👍👍

@graemewardhaugh7662 Жыл бұрын

very informative video. Thanks

@DefinitelyNotAGuru Жыл бұрын

Thank you

@iangreen946 Жыл бұрын

Yes your right , thanks for the explanation 😊

@DefinitelyNotAGuru Жыл бұрын

No problem 👍

@MrSunnyBhoy Жыл бұрын

Great and informative video

@DefinitelyNotAGuru Жыл бұрын

Thanks

@butaconstantin6661 3 жыл бұрын

really appreciate your video😁

@DefinitelyNotAGuru 3 жыл бұрын

Thanks buddy, I appreciate your comment. Tell a friend about the channel 👍

@Bearonasubmarine 3 жыл бұрын

You have helped settle my mind on this. Ive always owned second hand. My friends all lease new cars. My current car is dying and they're pressuring me to lease "oh come on its such a good deal" "Im fed up of seeing you in bangers" "treat Yourself"... I don't have the jobs that they do, I don't have the disposable income they do. I dont do many miles. This has been bugging me for ages. A fair Bank loan for £10k can get a decent, respectable runner. Thank you for the info. Keep it up.

@DefinitelyNotAGuru 3 жыл бұрын

Glad you found the video helpful Jon. It’s all about getting what makes most sense to you mate. Yes, £10k should get you something that will last you a number of years. Check out my used car history checks video and my used car buying advice playlist.

@iwantagoodnameplease 2 жыл бұрын

I'm about to buy a 2018 Skoda Octavia. I was going to buy it cash, but I might instead stick the cash into an index fund and take one of the other finance options instead. So thanks for the info ! One difference here is I plan to own the car for 10+ years, until it dies really.

@DefinitelyNotAGuru 2 жыл бұрын

Bank loans are the way to go at the moment, such a cheap way of borrowing and you remain in control. Octavia is a brilliant choice and will make a fantastic long term companion. Thanks for watching and for joining in 👍

@ninjawacker5442 2 жыл бұрын

Looking at a re finance due to our PCP ending next year so will use this info when we see the new dealer.

@DefinitelyNotAGuru 2 жыл бұрын

Best of luck!

@willswheels283 Жыл бұрын

I’ve bought cars and bikes using finance of some kind, not all were the best “fit” for me, and I hadn’t really realised that a lot of the dealers will want to sell a car to you but the deal will be more in THEIR favour, that makes you feel like you’ve been “HAD”. For me a personal loan was the best way to purchase a vehicle as that gives you more freedom. Thanks for your good advice as always.👍

@DefinitelyNotAGuru Жыл бұрын

👍👍👍

@RustyDice 2 жыл бұрын

This is one of the best presented and explained videos I've seen on this topic - It would be interesting to revisit now that inflation in +6% and of that alters the conclusions Thanks!

@DefinitelyNotAGuru 2 жыл бұрын

Thanks Rusty 👍. The only thing that changes in recent times is with values going through the roof those coming out of a PCP have done well but that looks very likely to be a thing of the past pretty soon.

@mals459 2 жыл бұрын

Just coming out of a PCP with £6k equity. Will never do PCP again though. Waste of money. They’re quoting 9.9% upwards vs bank loan at 3.3%.

@martinjones1930 2 жыл бұрын

The balloon payment at the end is a rip off well explained video fella

@DefinitelyNotAGuru 2 жыл бұрын

Cheers Martin

@bexhilln11 4 ай бұрын

Very useful

@DefinitelyNotAGuru 4 ай бұрын

Glad you think so!

@Burrie81 2 жыл бұрын

Remember on PCP you can sell the car to a dealership by getting them to pay off the settlement figure to the finance company. I have just done this which essentially meant I had a free car for the past 3 years (admittedly only because the 2nd hand car market is ridiculous currently here in the UK which meant I made over £9k on the car!)

@DefinitelyNotAGuru 2 жыл бұрын

Yes of course, quite a few lucky people benefiting at the moment but I think the current situation is a once in a lifetime thing in all honesty

@dannystalford5029 Жыл бұрын

If your pcp was 3+ years, you lost about 5-6k in total, taking into account everything, so. No, even in your case, HP / simply buying would've been better

@Drzee1968 Жыл бұрын

Would love to see the maths behind that, I suspect that you may have got more than expected, rather than £9K over original purchase price then account for your monthlies and deposit, was it essentially free, or just a better deal than usual?

@satchiebabe6052 9 ай бұрын

Thanks for the reminder. I remember a dealership telling me this.

@waynem2895 7 ай бұрын

Hi. Can you explain how you got cash, when you sold the car to the dealership?

@r__b6095 2 жыл бұрын

Good video and analysis. For the cash vs PCH example for a new car it would be interesting to factor in the cost of depreciation. I would think if you buy in cash and sell after 3 years you could probably save money, I just wonder how much

@DefinitelyNotAGuru 2 жыл бұрын

Thanks, check out some of my other videos where I more or less do that. Much depends of what you buy and when but 9 times out of 10 you’re better of leasing. In my opinion of course 👍

@r__b6095 2 жыл бұрын

@@DefinitelyNotAGuru nice I'll take a look. The convenience factor of leasing also must be quite valuable. I'd rather lose a few percent and just give the car back than make a modest saving but have the effort and risk of selling myself

@theoneandonly34 2 жыл бұрын

One tip I always use is (if you’ve got the disposable savings) If you’ve got the cash of buying the car lying around. Buy the car in cash. Then pay yourself back each month depending on how long you’re going to keep the car. For example over 3 years you can pay £417 for a £15,000 car

@DefinitelyNotAGuru 2 жыл бұрын

That's a great idea, thanks for sharing.

@theoneandonly34 2 жыл бұрын

@@DefinitelyNotAGuru that way you’ll always have cash to buy a car + part exchange your old car. You will always be able to afford a better car each time. The only issue is that you have to put the money somewhere each month where you’re not going to touch it unless it’s for a new car!

@DefinitelyNotAGuru 2 жыл бұрын

@@theoneandonly34 yes 👍

@terrydonegan1622 Жыл бұрын

Great idea!!

@satchiebabe6052 9 ай бұрын

I like this idea 💡

@elscorpio2008 Жыл бұрын

If I may add, Hire Purchase is also more accesible to poor credit history individuals. This is because it allows the owner (the bank) to reposess the car easier in case of default.

@DefinitelyNotAGuru Жыл бұрын

👍

@denisbassom172 Жыл бұрын

Thanks, again

@DefinitelyNotAGuru Жыл бұрын

Thanks very much Denis, I just called you David on Ko-fi!!! Sorry about that. Really appreciate it.

@grahamavis6105 Жыл бұрын

Wish I'd found this channel before I went down the PCP route with my latest motor......... :(

@DefinitelyNotAGuru Жыл бұрын

👍

@chosenbreed 2 жыл бұрын

This is a great video. Thanks for the valuable insights. I'm still not clear on why PCP is so popular if it doesn't work out for the folks getting the cars. I mean why do they go for them? I've always felt uneasy about them myself but had no figures to back it up. You make some great points about not owning depreciating assets or at least not paying too much for them. Are there any stats for the depreciation? A depreciation curve if you will. You made the point that a lot of depreciation happens within the first few years of the car leaving the factory. What happens after that? I'm guess I'm trying to work out how best to buy a used car :-)

@DefinitelyNotAGuru 2 жыл бұрын

Thanks. PCP is a win win for the dealers and therefore is very skilfully sold. The best way to buy a used car is with cash or a bank loan, it’s as simple as that. Cars do the majority of their depreciation in the first 3 years and varies massively between manufacturers (I did a video on that so look at my back catalogue).

@wgriffiths2628 2 жыл бұрын

With regard to gap insurance. This can delay settlement, because the HP company and the Gap supplier can't agree the amount each is willing to pay if car is written off. Most people could end up without transport until its sorted. 🤨

@DefinitelyNotAGuru 2 жыл бұрын

Interesting point, thanks

@itsmikedev Жыл бұрын

Great video, covered a lot more than other discussions I've seen. I'm looking at buying a new Skoda Scala either at the end of this year, or early next year (a new facelift model should be due then) so this was helpful. My findings before watching this were much the same, bank loan APR was around 4.9% whereas Skoda's PCP rate was 7.8%, and I'd of course probably end up needing a loan for the £10,500 balloon payment after 48 months. It doesn't seem like Skoda offer leases, so my only two choices are PCP or bank loan. Even if there was a lease option, I'd probably still go with a bank loan because the depreciation isn't a massive factor for me - the whole excitement of factory-ordering a car is the fact that you'll have an attachment with the car, knowing me I may also become *too* attached to return it after the term ends :)

@itsmikedev Жыл бұрын

I wonder though, what are your thoughts on the extended warranty and servicing packages they offer when factory ordering cars? And I know you said they aren't willing to negotiate cash prices buying outright, but do you think they might be willing to negotiate the price of these warranty packages, if I buy the car with a bank loan?

@DefinitelyNotAGuru Жыл бұрын

Watch some of my recent lease deals videos, there are some great deals on the Scala.

@DefinitelyNotAGuru Жыл бұрын

You will often be treated like a second class citizen if paying cash.

@itsmikedev Жыл бұрын

@@DefinitelyNotAGuru That's a shame to hear, thanks for the heads up though I'll keep that in mind. I'll check out the other videos too :) Edit: Just watched the video, if I'm not mistaken these are all lease offers? I think I'd prefer being able to keep the car to myself, I'm not really too bothered about upgrading all the time.

@theaz 6 ай бұрын

It's all fantastic point but interest rate matters and each person has access in different rates. Keep that in mind.

@DefinitelyNotAGuru 6 ай бұрын

of course...

@bobb3261 2 жыл бұрын

Great video, although I thought with a PCP you might end up with equity in the car if for example mileage is less than anticipated plus you can sell it to any dealer at the end or before the term of the PCP period to realise any profit

@DefinitelyNotAGuru 2 жыл бұрын

Hi Bob, whilst that true you’ve often paid so much more in the first place that any “profit” is not what it seems. I’m not a finance professional but to my mind PCP very often only works for the dealerships.

@bobb3261 2 жыл бұрын

@@DefinitelyNotAGuru ok thanks

@waynem2895 7 ай бұрын

@@DefinitelyNotAGuru please give an example with numbers.

@DefinitelyNotAGuru 7 ай бұрын

@@waynem2895I have done in countless videos mate

@antonymcneillis 5 ай бұрын

I would love to see a Company Accountant’s view of the options for an EV. With all the corporate and personal tax benefits.

@DefinitelyNotAGuru 5 ай бұрын

👌

@wayneburgreave7401 2 жыл бұрын

Great Video Thanks Whats your thoughts on car warranty's on used cars ?

@DefinitelyNotAGuru 2 жыл бұрын

I'll be doing a video on them once I've done some more research. Main dealer/manufacturer warranty is always best but I'll be taking a close look at some others soon

@ginarae5739 Жыл бұрын

Great Article, well explained in 'plain English' ..except in my case; 'HP' directly from my Bank was considerably lower than a 'Loan' - I imagine it's because the HP finance is for a specific product, paid directly to the dealership via Bank Transfer from the lender. - 100% agree, PCP is the worst option.!!

@DefinitelyNotAGuru Жыл бұрын

Yes, HP seems the leader in the clubhouse now, especially since the interest rates increased. 👍

@ginarae5739 Жыл бұрын

@@DefinitelyNotAGuru my specific purchase: - £18k vehicle - £7k cash deposit. - £11k to finance on HP. - Total interest on finance, over 48 months was only £1k, ...£250 interest p/a is a bargain IMHO. - A Bank loan, from same lender, was considerably higher APR.. 2x that of it's own HP, Main Dealership APR was over 3.5x of the Bank's HP rate..!!

@DefinitelyNotAGuru Жыл бұрын

@@ginarae5739 great deal and yes, a bargain!

@alfredmandru 3 жыл бұрын

The online loan calculators lure you with low apr, but when you apply, aven with excellent credit score, the apr is higher.

@DefinitelyNotAGuru 3 жыл бұрын

Still a damn site cheaper than a PCP mate I'm sure

@alfredmandru 2 жыл бұрын

@@DefinitelyNotAGuru I meant the loan for balloon payment. Apr for loan less that 7.5k will be about 10%. Your calculation for PCP is too optimistic:) Interest for 5k loan will be 1.5k.

@smilezdover Жыл бұрын

Educative

@DefinitelyNotAGuru Жыл бұрын

Thanks

@aridi555 Жыл бұрын

Great video

@DefinitelyNotAGuru Жыл бұрын

Thanks for the visit

@aridi555 Жыл бұрын

As a Turkish man recently moved to England 🏴󠁧󠁢󠁥󠁮󠁧󠁿 I was thinking of getting a car but did not understand how things works here , you’ve made it very clear and understandable! This video helped me understanding it very clear thanks so much !

@DefinitelyNotAGuru Жыл бұрын

@@aridi555 That's great and welcome to England!

@stuartryde4132 2 жыл бұрын

Found your channel today, and found the cost of finance really helpful, PCH or Bank Lone it's going to be. But which 🤔

@DefinitelyNotAGuru 2 жыл бұрын

Glad you found me Stuart. As for your question, that’s for you to decide I’m afraid mate 👍

@roystonjames7794 2 жыл бұрын

Im into Vans, bought a van nearly new 15 years ago and still have the van, I am in the middle of buying another new van from the main dealer, I was buying the van through hire purchase. I ordered the van last october and expected delivery in June 22 and have since been told by the dealer that i am going to have to wait till october for delivery, I have saved that much by saving the payments that i would be paying plus a bit more that I have enough to pay for the van with a large top up from a bank loan saving about £6k in payments over 5 years, I will be keeping the van so im not bothered about depreciation, the dealership are ok with me paying in full when the van is ready

@DefinitelyNotAGuru 2 жыл бұрын

👍

@freeloaderfs Жыл бұрын

Really loving your videos, I have a question regarding insurance with a lease car will there be a high excess such as £1000 because it’s a lease car ? What do you recommend doing insurance wise ? My other concern is cost if alloys get scuffed or worst case someone bumps or scratches the car when your parked in supermarket or something is there a service u recommend to repair at a affordable price thankyou for all your help with these videos. On a last note is it better to do 2 or 3 years lease because I’m assuming when you hand the car back and want to re lease a new one I then have to put another £3000/£4000 down so will need to save that to one side ?

@DefinitelyNotAGuru Жыл бұрын

Hi, you can but cover for alloy and scratch damage (my sponsor is car2cover, mention the channel and you will get a £10 discount). As for the car insurance it’s literally no different from any other car. 3 year deals usually make most sense and, yes, you will need to save for a new deposit.

@mattdeeley8134 Жыл бұрын

Really informative page thanks for this, question on deposits on lease I’m looking at a 36 month term so I do 6 month or 9 month down payment ?

@DefinitelyNotAGuru Жыл бұрын

Up to you and your personal preference 👍

@mattdeeley8134 Жыл бұрын

Which would you recommend ? Would I be putting cash down to throw away potentially. I am looking at the cupra formentor 245 2.0 VZ2

@DefinitelyNotAGuru Жыл бұрын

@@mattdeeley8134 it’s 6 of one half a dozen of the other. Generally you’ll pay a tiny bit more over the three years if you put down a lower deposit but I mean tiny.

@mattdeeley8134 Жыл бұрын

@@DefinitelyNotAGuru thanks for your help I went for 9 to lower my payments

@Jeffybonbon 2 жыл бұрын

another important part you have missed about PCP is if you go over agreed milage they charge a penilty for every mile more you go over also If your deailer wont take the car back because its worth less than the agreed valuation the finance company will send out an inspector to take the car from you and they go over the car with great deatil and again will charge you if a fault is found on bodywork or trim I buy now cars around 5 years old Aston Or Jag or bentley from approved deilership with warranty keep them for 10 years and move on But my Currant XK convertable I am keeping because we are faceing high intrest rates and much bigger losses on second hand cars

@DefinitelyNotAGuru 2 жыл бұрын

👍

@davesimmons7907 2 жыл бұрын

I'm going to have the cash and am looking for a used car. I saw a video (American) where the guy said to go in as though you're going to take the finance so they have the car at the lowest price (because they think they're going to make it up on the finance) but then tell them you've changed your mind and want to pay it off. Have you noticed much difference in a used car price between cash and finance ?

@DefinitelyNotAGuru 2 жыл бұрын

They will probably throw in some discounts of some kind with finance deals but not without. Discounts at the moment are rare as hens teeth as the market is so strong and supply is short.

@DaBurgeo 2 жыл бұрын

Great video, Nice to see a comparison between all options. Surely with a PCP you have money left in the car at the end of the term to start again. Plus if the value has gone up (admittedly this is only a recent thing) you can then sell the car and pay pack the dealer. Or if the car has dropped more than anticipated the finance company takes the hit. With PCH the lease company will take any profit on the car at the end?

@DefinitelyNotAGuru 2 жыл бұрын

At the moment as used prices that’s often the case but only right now as used prices are so high. Watch my pcp vs lease comparison videos and you’ll see the saving you make on a lease usually massively outweighs any value you have in the car at the end of a pcp

@lgx2410 2 жыл бұрын

A benefit of pcp is you get the option and a GFV if you decide not to keep it.

@DefinitelyNotAGuru 2 жыл бұрын

Yep, however, that is actually a benefit or not is very dependent on how good the initial deal was and how it would look compared to alternatives over the same amount of time. The option to buy is almost always there with a lease too by the way, it’s just you don’t know what the magic number will be until you’re in the last few months of your deal. Thanks for watching 👍

@charliewoodie Жыл бұрын

Very helpful video. First time I leased a car was 4 years ago & very happy with the 3 year lease. Got new lease, including maintenance, 10/2021 & disappointed with the car. Asking lease company for early termination figure & was expecting about 50% of remaining payments (excluding maintenance as none done at that point), quoted 65% of remaining payments including the maintenance! My wife says I should never get another lease just pay cash. What do you think?

@DefinitelyNotAGuru Жыл бұрын

I’d say just make sure you’re happy with the car before you lease it!

@charliewoodie Жыл бұрын

@@DefinitelyNotAGuru I was at the time but my wife’s illness has changed our needs! What did you think of the 65% early termination quote?

@DefinitelyNotAGuru Жыл бұрын

@@charliewoodie I think it’s harsh, most charge 50% but not everyone, the fact you’ve got a maintained deal has park a pushed it up a bit.

@keithneilson6236 9 ай бұрын

with a lease - are you locked in for the term agreed? As in, if you were made redundant - can you cancel it? or would be be locked in no matter what for 2/3 years or whatever it is? Just wondering the nature there vs a bank loan, which of course, you could sell the car off. Thanks I've never considered a lease

@DefinitelyNotAGuru 9 ай бұрын

Basically yes you are. you generally have to pay back 50% of the remaining payments if you cancel early but it varies.

@ghostville Жыл бұрын

Hi, just came across this video, great job. I am thinking of getting a Honda crv 2019 (used) I felt pcp was the best option but I think I will go for a bank loan. I'm hoping to get like a £7k deposit. But to be honest I'm still confused, any advise?

@DefinitelyNotAGuru Жыл бұрын

Also look at HP, at the moment I’ve seen some good HP deals around - remember to shop around for the finance as you don’t have to get it from the dealer. I personally don’t like PCP - check out my used car buying guide on Amazon as it explains a bit about finance, links on my website notaguru.co.uk

@peromalmstrom7668 2 жыл бұрын

Informative. Thank You. I always add an additional component, that is 'Safety', though some see it as 'Personal Circumstances' which most discussions on Car Finance miss, as a personal view. A depreciation should always be balanced against product safety and product age. What is the value of a life, regarding the partner, children, family or your life? Not everything in life is financial when doing an estimate. Peace of mind which is connected to the safety of those we love or are responsible for, most I would conclude would find this valued at 'priceless'.

@DefinitelyNotAGuru 2 жыл бұрын

👍

@mi5t3rk3vlar 3 жыл бұрын

Enjoying the content, but something i noticed is when you mention leasing you aways say there is no option to buy the car at the end - I have had 3 lease each time it was an option i just asked for a quote - also it doesnt have to be always serviced at a dealer this depends on the lease company two of the cars i had were done at a specialist at a good saving.

@DefinitelyNotAGuru 3 жыл бұрын

Thanks for the feedback. The point regarding purchase is that you have no contractual right to buy at the end of the deal. In my experience with my cars and work vehicles, it's now very common to be offered the chance to buy, sometimes only if you ask, but there have been some cases where the finance company has refused the option to buy (including our last car (that we considered keeping) where they just pointed us to the car auction. Yes I think I covered the servicing point in another one of my videos but thanks for pointing it out. Keep watching ;)

@chrisbrown3278 2 жыл бұрын

Thank you , What happens to the initial deposit at the end of the pcp if you move to another pcp do you have to fund a new deposit or do you only get towards the new deposit the difference between the figure agreed ( balloon payment ) and the increased value ?

@DefinitelyNotAGuru 2 жыл бұрын

Hi Chris, the balloon payment is the balloon payment, factoring in that you've already paid that deposit/first payment. This is where PCP usually gets it hooks into you and why it's so popular with car dealers, they will say "we can give you £X off the deposit on your next one" - usually nothing outrageous that you couldn't find yourself using something like Carwow but lots of people fall for it and feel tied to a brand because of it. PCP is generally a great deal for the dealers. If the balloon payment is lower than the value, and it's worthwhile to do so, you could buy the car (pay the final payment) and then sell it privately or to WBAC etc.

@chrisbrown3278 2 жыл бұрын

@@DefinitelyNotAGuru thanks for you’re help with this

@DefinitelyNotAGuru 2 жыл бұрын

@@chrisbrown3278 pleasure mate

@karlhayes1077 Жыл бұрын

Never understood why pcp is popular. Recently leased the new Citroen C5X at £289 a month but if I bought same car from dealer with same initial payment it would be £418 ! With a £16000 final payment . 🤷🏻‍♂️

@DefinitelyNotAGuru Жыл бұрын

👍

@briandonnaly6660 2 жыл бұрын

can i ask how do you pay for your cars?? great video thanks for the advice.

@DefinitelyNotAGuru 2 жыл бұрын

I have one on a lease, one cash. If I wanted any other kind of finance I would only consider a bank loan 👍

@briandonnaly6660 2 жыл бұрын

@@DefinitelyNotAGuru thanks......i will get a bank loan as we have decided to get a second hand car no more than 3 yrs old. thanks for the advice.

@DefinitelyNotAGuru 2 жыл бұрын

@@briandonnaly6660 no problem mate, in my opinion it almost always beats any kind of car finance and gives you more flexibility with the car etc

@cocobutterist 2 жыл бұрын

With a PCP deal, can’t you sell the car halfway through the deal and break even? E.g taking out a 48 month agreement and selling the car 24 months in

@DefinitelyNotAGuru 2 жыл бұрын

First you have to buy yourself out of your PCP deal and obviously market prices may or may not be on your side

@-Chunk 2 жыл бұрын

Surely the A3 would be worth more than 15k in 3 years time? So wouldn’t you have cash in your pocket in the end??

@DefinitelyNotAGuru 2 жыл бұрын

Who knows mate? Used car prices are strong at the moment but they will most likely return to normal soon.

@Strider9655 2 жыл бұрын

From my perspective it's simple, if you can't afford it, don't get it. 6 years ago I had 18'000 in my current account, I went out and bought a £4000 used motor. Spending every penny you have on a car is a mugs game. PCP is even worse, it's a trap, once you're in, spending your disposable income on a car you'll never have enough money for that final payment and you're only option is to keep going back for another car every few years.

@DefinitelyNotAGuru 2 жыл бұрын

Yep, but if you can afford it - fill your boots. I’m in the cheap used motor category myself at the moment and loving it but have had some great lease cars over the years that actually worked out very economical as I didn’t have any breakdowns, tyres, road tax etc.

@iangreen946 Жыл бұрын

Hi im not sure your explanation on leasing is correct, you say you don’t want to own a car because it depreciates, however what do you think your paying every month on a lease car , I’ll tell you, the depreciation.

@DefinitelyNotAGuru Жыл бұрын

OK...I've done lots of videos on this Ian, I get your point but if you find the right deal you will pay far less than the depreciation. Cost of ownership/stewardship is the key point here. If you BUY a car and after 3 years it's lost £20k in value, but your lease payments would have been only £12 k (I have many examples of this on my channel) would you have been better off leasing or buying. Leasing is MASSIVELY misunderstood by most - it's not always the best way to go but it often can be.

@peterward6039 2 жыл бұрын

Why has it to be serviced by main dealer

@DefinitelyNotAGuru 2 жыл бұрын

Has to be serviced using all approved parts, just check terms of your lease but independent can often do it but they must use approved parts or warranty imay be voided

@ogriboy Жыл бұрын

I would say in my experience lease deals on the cars I look at are either the same or more than PCP due to incentives and end up overall cheaper than lease unless as you say you want to buy it. The major advantage of PCP is exit availability at 50% of payments should you need it without any credit penalties you cant do that with a lease your tied up like a hog.

@DefinitelyNotAGuru Жыл бұрын

I suggest you watch some of my lease deals of the month videos. My experience is quite the opposite but it's always a case of looking for the right deal. PCP "incentives" are often nothign more than smoke and mirrors and you have to ask yourself why dealerships try so hard to get you into a PCP.

@ogriboy Жыл бұрын

@@DefinitelyNotAGuru I have found that finance contributions and dealer finance contributions make up the difference in your cost comparison analysis and pitches it against lease for me along with some exit potential as noted. But each to his own I guess. Having said that my next vehicle is HP as I want to keep it for the longer term.

@DefinitelyNotAGuru Жыл бұрын

@@ogriboy yes, those are the two main "smoke and mirrors" points that I'm talking about. HP is far better than a PCP. As you say, each to his own.

@ogriboy Жыл бұрын

@@DefinitelyNotAGuru I guess the only way is to sit down and do a similar chart as yours with the actual deal in place and actual numbers for comparison. I cant quite see why real financial reductions which reduce the amount borrowed are smoke and mirrors when you can compare directly to the original MRRP. I will take a look at your lease vids though.

@DefinitelyNotAGuru Жыл бұрын

@@ogriboy That's 100% what I would advise doing. They are smoke and mirrors as you'd get the same discount levels from a cash purchase using a car buying service (or sometimes just via autotrader) and in no way counter-act the extra you often pay using the dealers own finance. They are desperate to get you into PCP and they can keep refreshing it and tempting you with further smoke and mirrors for years to come. Their business model is as much about selling finance and add-ons as it is about selling cars. Finance is available elsewhere but PCP is very often the worst (for the consumer) of the many available options; it's almost always the best for the dealer. I've done more recent videos on this which perhaps explain better. Car finance still has some very shady practices that would simply not be allowed in other financial services environments.

@leewalerzak Жыл бұрын

Iv always favoured pcp because they usually under value the gfv at the end of the agreement which leaves you a sizeable deposit to roll into another car I realise your paying less on a pch and could put the difference up for your next deposit on a pch but realistically who's gonna do that

@DefinitelyNotAGuru Жыл бұрын

Yes, you're paying more usually as you point out. Each to his own mate 👍

@alcoomer 2 жыл бұрын

A pcp you can take to any garage (vat register) as long as they use genuine parts

@DefinitelyNotAGuru 2 жыл бұрын

👍

@-Chunk 2 жыл бұрын

Don’t need MOT til 3 years old? I thought?

@DefinitelyNotAGuru 2 жыл бұрын

No MOT until it’s 3 years old, yep.

@-Chunk 2 жыл бұрын

If you have a car allowance, best to do the loan??

@DefinitelyNotAGuru 2 жыл бұрын

You need some advice on your situation mate as it sounds very odd. Loan is always better Han PCP.

@-Chunk 2 жыл бұрын

@@DefinitelyNotAGuru thanks for replying to every one of my frustrating comments!

@DefinitelyNotAGuru 2 жыл бұрын

@@-Chunk When people take the trouble to comment I always try to reply mate

@-Chunk 2 жыл бұрын

@@DefinitelyNotAGuru sorry to badger you again - but I’ve checked a few loans and they are all 7.9% Audi APR is 6.9% - value of the car they offer I think is fair too. I’ve seen higher OTR prices elsewhere

@DefinitelyNotAGuru 2 жыл бұрын

@@-Chunk try Tesco loans and money supermarket

@OG-dp1kx 4 ай бұрын

Hp is good if you want to keep the car forever

@DefinitelyNotAGuru 4 ай бұрын

👍

@richardalder7185 11 ай бұрын

I'm sorry but your maths is wrong on the second hand car purchase. You said your example for the bank loan was only costing you £617 over the 3 years for borrowing 15k. No bank would lend 15k over 3 years and make only £617. You forgot to take into account the deposit of £2500, therefore you are borrowing £12500 over 3 years, making the bank £3,117 in interest over the 3 years. The same has to be done for the HP figures.

@DefinitelyNotAGuru 11 ай бұрын

The loan is correct, at the time I made the video that deal was a available with no great effort.

@DefinitelyNotAGuru 3 жыл бұрын

This video has been made on the assumption that you have a good credit score and can access mainstream financing products.

@patm2273 2 жыл бұрын

My PCP contract is coming to its end in 2 months, my balloon payment will be about £5600, I have valued my car on WBAC and they have come back with a valuation of around £10000, I have maintained my car and basically looked after it so I would like to keep it, but I’m having trouble finding a loan as I also have a second car but it’s my wife’s car and she pays it but I had to get it in my name as she had a poor credit history before we met. So I am thinking of going down the leasing route, but I wounding if leasing a car would show up on my credit report the same way a loan of HP or PCP does? Cheers

@DefinitelyNotAGuru 2 жыл бұрын

@@patm2273 you do need decent credit to get most mainstream lease deals pat, you could approach one of the large brokers who may be able to source finance from a sub-prime provider but it’d likely be a fair bit more expensive than the deals you typically see in my videos. 👍

@buddleiabee Жыл бұрын

So with pcp can they put the price up at the end or is it fixed? These questions people need to know the answers to.

@DefinitelyNotAGuru Жыл бұрын

Fixed

@pja687687 Жыл бұрын

The Car doesn't have to be serviced by a main dealer on a PCH. This is wrong information.

@DefinitelyNotAGuru Жыл бұрын

Correct, it just needs to be serviced by a VAT registered garage using all approved parts, however, the first issue you will have if your dealer is trying to get out of a warranty claim is "we didn't service it, it hasn't been done properly" - main dealer servicing costs for a number of brands are actually pretty much the same as your local garage too.