Would you buy another diesel?

IronGiant

Ah thanks.  So essentially they want the same deposit again to reset the clock by 2 years ?

ChuckMountain

Which is back to my point about you need to have saved the deposit each time or pay no deposit and higher payments so you don't leave a hole.

ChuckMountain

If you are a cash buyer (@Faust, @duffbeerdrinker ), incidentally you will get a better deal if you go for a PCP and then pay it off within the first 28 days which equates to very little interest but the benefit of the finance contribution.  The finance company won't like it but its what a lot of people do.

Faust

I've referred to it a number of times - ten years.

You've lost me now. How can there be anything cheaper than cash, other than stealing the car or getting someone else to pay for it?

ChuckMountain

If you walk into most new car dealers now, cash is no longer king.  

Assuming you were equally as good at negotiating a deal, the finance on the road price would be less than the equivalent cash price.  (The amount paid at the end of the term might be more)

The dealer will have so much margin physically in a car which as a cash buyer they could negotiate on, the same applies to the finance buyer.

However on top of that there is the deal kickbacks: - finance commission, commission on various items like GAP etc, which are all ridiculously overpriced and target incentives for x many cars etc.

Selling a car on finance gives them much more wiggle room on margins to allow them to do that "extra special deal in time for month end"

Then there's the finance company side of who will offer a further financial deposit contribution.  That isn't available to a cash buyer and these are often substantial, think from memory mine was £5k on my last car.

The kicker is then if do want to keep the car for a longer period and aren't going to swap it after the loan period then if you can pay it off with cash asap to save the interest payments.  In my example if I did that I would have got a £5k better deal than a straight cash buyer.

Stupid you might say but lets make everything far more complicated than it needs to be to maximise profit....

ChuckMountain

I didn't want to own my 3.0 Diesel A6 it is likely to be not worth the GFV and as I got a car allowance I am happy to keep paying x a month for a car that meets the rules.  (Which used to include an age limit)  I would also have to pay additional servicing costs and its no longer under warranty.

Not sure what I will swap it for yet, as I am 2 years into the deal.

I bought it more for the performance though as well as a reasonable economy, though my long term average is 26mpg over 16k ....

ChuckMountain

My answer to the original question would be if you were buying on 2-4 year PCP finance and the diesel car fitted your specs better then go for it.  

The caveat being make sure you adequate insurance protection in the form of GAP or Return to Invoice price.  This in the dealer costs £400 - 600 depending on make, but you can buy separately for £100-200 for the same cover.  If you don't have this and say the car got written off in year 2 then the difference between the market value and the outstanding finance would have to be paid by you.  Given the market values are likely to drop then this is going to be more of a problem.

If you are cash then best deal and residuals which is sounding likely to petrol

Faust

Yes but the bit you are missing is I will own my car from day 1 and I will still own it in ten years time.  Oh and by the way, who in their right mind pays list price for cars.  The wife got a new motor in the summer (cash of course) and still got a pretty decent discount and a decent trade in for her other.

I sleep well at nights because everything we have we own, nothing on tick.   As they say, to each is own but give me a cash sale for peace of mind every time.

Faust

Not sure how this example equates  with all these so called super PCP deals?

ChuckMountain

I don't think anybody is missing the point you own the car if you buy in cash.