New car buying...i have a question

[VVM]

Hey all.

Looking to buy a new car in the next few months - Ford Fiesta ST if anyone is interested - and I have a question about finance.  Im not new to buying a car on PCP agreement, my current car is being payed that way.

Anyway, I have found this website:
http://www.carpricechecker.co.uk/checke ... ype=detail

Now my question is, whats the difference between a finance lease deal, and a PCP?  Someone explained it like this:
Finance lease:  dealer buys the car, gives it to you, and you pay the dealer back (as they take out the loan)
PCP: the loan is in your name, and you pay the finance company back.

Now, i dont know if that is correct...cany anyone enlighten me?

I may have further questions depending on your answers lol.

Cheers!!!   8-)

[Craig.]

a finance lease generally means your borrowing the car from the company. It's like a long term car hire. Your required to service it by there rules and places and stay within a certain amount of miles. At the end of the term you'll be given the choice to buy the car outright or take a new car on the same deal, or end the agreement. I'd look closely at the deal as the final payment is a lot of the time rather steep.

[expat]

Leasing, you never own your car unless you fork put at the end. You pay a down payment and pay a fixed monthly amount. If you divide the amount left by the amount you pay each month, you will see there is a large shortfall. You can either pay that at the end and then own your car, or "sell" the car back to the dealer and start again. You will be limited on mileage too and if you go over the contracted amount, the amount you "sell" the car back to the dealer before you get your next new car can really drop. The one drawback from leasing is, it is difficult to change your car company e.g from Ford to Toyota. That being the idea though. You either have to buy out or walk away at the end of a leasing deal or take another car from the same company.

I have never leased. I want to at some point own my car. Down payment, X amount left divided by X months, then it is yours. Saying that leasing suits some, but it is really worth checking out if this is what you want. Don't just ask here, there must be independent financial bodies that you can also ask.

Matt

PS Do you really want to be driving about in the words of Jeremy Clarkson, a Ford Tampon

[VVM]

cheers for the replys guys.

i have to say though, there seems to be little difference between the finance lease, and PCP...as the milage resrtictions etc are currently applying to me.

i never really want to ultimately own the car, as i will never keep it for more than 3 years.

i will look into it more before making a decision.

thanks again for your help!

[Craig.]

It's all down to your financial situation mate.
If you can afford the new car every 3 years while paying the monthly payments, then it would be a fair enough thing. If you would rather own the car outright after a set time, thus freeing you of monthly payments, then a personal loan works out better.

[C]

If you would rather own the car outright after a set time, thus freeing you of monthly payments, then a personal loan works out better.

Gives you more flexibily in disposing of the car too - and you aren't limited by what one dealer now believes it'll be worth in 3 years time, and of course the mileage restrictions etc.

I've always bought on personal finance. Whether you take finance via the dealer and their finance, or a personal loan from the bank is your choice, although the latter will be cheaper as the interest rate will possibly be a couple of % lower. On the car I just bought I went through the dealer arranged finance, but only after getting them to match the bank loans rate.

Oh, and finally, don't buy a new car. One or two years old is far better. Then someone else pays the excessive depreciation of the first year, and you'll still get the meat of the manufacturers warranty.

PS. Buy a Skoda Fabia VRs. A hot hatch that does over 50mpg, same top speed (well, 128mph instead of 129mph), 9.2s 0-60mph and 130bhp. Gp 9 instead of 13 insurance too...

[Ivan]

Oh, and finally, don't buy a new car. One or two years old is far better. Then someone else pays the excessive depreciation of the first year, and you'll still get the meat of the manufacturers warranty.

PS. Buy a Skoda Fabia VRs. A hot hatch that does over 50mpg, same top speed (well, 128mph instead of 129mph), 9.2s 0-60mph and 130bhp. Gp 9 instead of 13 insurance too...

For insurance, buy something that
1: isnt hot in the boy racer scene (bad driving, lots of accidents)
2: isnt a typical city car (loads of small dents)

And what C says... get a second hand car. Age doesnt matter that much anymore these days, but dont get the known trouble makes (renault laguna and megane). Ex corporate stuff has had good maitenance and is reasonably priced.

[VVM]

cheers again folks.

i dont have a problem with insurance tbh.  never had an accident (touch wood), no driving convictions and a i live in a good post code, so premiums are fairly cheap (for someone my age).

i hear what your saying about brand new also.  i have been looking at nearly new also.

like i said, im going to look around a fair bit before jumping into anything.

thanks again!

[Fozzer]

...as you live in England, consider something with Two Wheels...

...otherwise, you wont be going anywhere very fast!... ...!

Trust me......!

Payl...Meep...meep... 8-)...!

[VVM]

its a good idea fozzer i'll give you that, buts its not practical for me.  im in a car pool for work, plus i also do some company miles with other employees (free petrol woohoo!).

8-)