A while back some folks here argued with me that they would go for PCP or HP when buying a car is it is cheaper... I cannot find that post and I wanted to understand that again as I am giving these options.

Price of car is 145k
PCP 49 months is 175k with roughly 1800 a month
HP 48 months is 165k with roughly 3k a month. I rounded all the figures.

So how is any of this cheaper than cash buy?

There was something suggested by someone here that I get a deal via PCP or HP then pay the car off in cash? How does that work...

Thanks

The point is that it depends; depends on promotions, contributions etc.

It is impossible to say that always, at any moment in time, one method is cheaper or better than any other method. I do the sums each and every time.

For example;
1. Sometimes there is a finance contribution which just isn't available when buying cash. In that case it can make sense to take a finance options.
2. Depending on the kind of finance on an offer it may be possible to buy, get a finance agreement in place and pay it off without penalties in the first 7 days. Then the finance is clearly cheaper, you had the benefits but didn't pay the interest.
3. Sometimes (often with brand new models) there are really good outright lease deals for just 12 or 24 months with no option to buy. As the leasing companies pre-order lots of cars their purchase power is way greater than yours. the limitations are often in colour and options, but they aren't daft and understand the game and often include good versions.
And so on...

There simply is no fixed answer, you need to do your calculations...

For example in your sums above you did not take into account any discounts, interest rates, finance deposit allowances, early termination fees or allowance etc. As such you aren't comparing like for like.

My general approach, but your mileage may vary, is to first of all get to the best cash price discount, then start working in any dealer, manufacturer, and finance contributions. And don't forget to utilise multiple dealers and suppliers either. Then do the sums and pick one that suits you....

Last edited by Bl4ckD0g on 19th Mar 2021 10:30am. Edited 1 time in total

Unless you think the car will be worth less than the GFV on a PCP with a low APR or it's a 0% finance offer, then it won't be cheaper than cash.

If there is a finance contribution, then take it and pay the balance off quickly and there won't be a penalty and you'll keep the contribution so it's like getting additional discount. I did that with my wife's Golf R, saved an extra £1500 on top of the £4000 discount.

Lease can be different as there are sometimes very good deals, but it's never worked out for me.

I look at the total cost over the period of each option and go with the lowest, but only once has that been a PCP, the rest were either straight cash purchases or a cheap bank loan for some of it if the cash was better used elsewhere. MY23 Panamera E-Hybrid
MY19 SDV8 Autobiography - Sold

Slightly off-topic, but this forum would be great if it had a "Like" or "Thanks" button on posts.

I would find myself liking a lot of Bl4ckD0g's posts for their useful content and the time taken to create. I read the one above and the recent Bitcoin ones with great interest for example!

Thanks Bl4ckD0g

Jon 1992 RR Classic 3.9 efi Vogue
===================
Both my fatties now gone...
Previous: 2011 L322 4.4 TDV8 Vogue SE /// 2002 L322 4.4 V8 HSE /// 2009 Discovery 3 2.7 TDV6 XS /// 2004 Defender 90 TD5 /// 1993 110 V8 Snatch Landrover /// 2005 Discovery 3 2.7 TDV6 SE (Aus) /// 1990 110 Isuzu 3.9 County (Aus) /// 1976 Series III Trayback (Aus)

Thank you I’m sure my directness is an acquired taste for some, but when one gets beyond that and look at the content I fully agree with you 🤣

PS I’m loving your name D3JON I always have to make a double take as it is so close to my number plate D5JNG and my real name. I actually wanted the D3 version 🤣

Thanks everyone.

I am going to ask for what the Financial contribution will be and what will be the costs for paying it in cash.

They did not reduce even 1 GBP off the price of the car when I placed order.

I don't like the forecourt cars much. None have special paint. Majority have black interior. Most are low spec. So I went with a brand new one in this case.

Jack, some online car retailers are offering a 17% discount on Range Rovers. You should be getting something off the RRP?

Jim

Definitely a good suggestion. Try something like carwow for a cash purchase price as a comparison. In addition a quick look online shows that there should be an instead further £5K off when taking out a PCP. Then just pay it off the following day and bingo you’ve got £5K extra saved. I’ll take a modest 15% please 🤣

Last edited by Bl4ckD0g on 19th Mar 2021 7:14pm. Edited 1 time in total

jackcramerr wrote:

Thanks everyone.

I am going to ask for what the Financial contribution will be and what will be the costs for paying it in cash.

They did not reduce even 1 GBP off the price of the car when I placed order.

I don't like the forecourt cars much. None have special paint. Majority have black interior. Most are low spec. So I went with a brand new one in this case.

Another thing to throw into the mix is whether you get any kind of car allowance from an employer. That can make leasing very attractive, or look at it as an interest rate subsidy on the payment if you’re buying on HP or PCP.

Bl4ckD0g wrote:

Thank you I’m sure my directness is an acquired taste for some, but when one gets beyond that and look at the content I fully agree with you 🤣

PS I’m loving your name D3JON I always have to make a double take as it is so close to my number plate D5JNG and my real name. I actually wanted the D3 version 🤣

That's my original username from Aulro.com from the days when I had a Disco3 'Down Under' (back in Blighty now) it just kinda stuck!

Jon 1992 RR Classic 3.9 efi Vogue
===================
Both my fatties now gone...
Previous: 2011 L322 4.4 TDV8 Vogue SE /// 2002 L322 4.4 V8 HSE /// 2009 Discovery 3 2.7 TDV6 XS /// 2004 Defender 90 TD5 /// 1993 110 V8 Snatch Landrover /// 2005 Discovery 3 2.7 TDV6 SE (Aus) /// 1990 110 Isuzu 3.9 County (Aus) /// 1976 Series III Trayback (Aus)

jackcramerr Is buying n SVautobiography? There could be an issue with dealer allocations; like, if they only get allocated one SVAb per quarter, they won’t discount because supply is limited. The answer to that would be to go to a dealer outside of the mainstream high income areas. Extreme example: Cornwall... I bet they struggle to sell their SVA allocation.

This can be simplified by using a broker, or the online alternatives. When I bought my car I used Autoedbid (if I remember) to get a fuel for discounts, then simply went to my dealer and demanded a better discount. Haggle haggle haggle. I ended up paying 0.3% more than the AutoeBid price but with the advantage of it being my local dealer in London.

In terms of finance, no idea, I only pay cash, but that is because I keep my cars for a long time. L405 P400e Autobiography (MY2020)... Silicon Silver / Espresso

Martin2 wrote:

£5,000 deposit contribution on Vogue, Westminster and Westminster Black models
£6,000 deposit contribution on Vogue SE models
£7,000 deposit contribution on Autobiography and Fifty models (except SV models)
This deposit contribution is conditional upon you taking out either PCP or Hire Purchase finance at 5.9% APR Representative with Land Rover finance.
[/i]

Been offered 1500 deposit contribution. They said early repayment is not something they like and requested I do not do it. Does that mean I can do it and I should do it?

They requested to see my bank statements as well. Is this normal? Not sure what they will see there as I hardly keep anything in account as I invest everything.

ilard wrote:

...

In terms of finance, no idea, I only pay cash, but that is because I keep my cars for a long time.

Seem silly to me to be so one-sided on it; you can be leaving free money on the table