New or used? PCP or personal loan?

[iliria]

Looking to pull the plunge on a Merc (C or E class) which I have meant to do for a while (but unfortunately life kinda took over). My mileage is around 10K per year and the majority is short innercity journeys. So the general wisdom is to get a petrol car or possibly a petrol-electric combi.

Now, the choices before me are either PCP for a brand new car or personal loan/cash for a second hand car.

If I went for PCP I could actually have a diesel too since the car would be under warranty for the 3 years I have it and so if something went wrong with the DPF then it's covered (or so I assume?). Plus with PCP I could have the latest every 2-3 years. On the other hand I have heard a lot of people say that a PCP is a waste of money.

If i got a second hand car I would go for petrol only or petrol-electric and would get nothing older than a 15 numberplate. I dont mind having my cars for longer than 3 years (my current car I have had for 8 years). I think in terms of money I wouldn't be wasting as much as a PCP. On the negative side people say that if something went wrong with a second hand the car would be out of warranty so it would be costly to repair. Not quite sure how much this argument holds considering that one of the main attractions of a Merc is its reliability.

So get the latest E-class (E220d AMG line) for £3k initial payment and then 36 monthly payments of £300ish which equals £13-15k?

Or get a second hand petrol C or E class (15 number plate) with low mileage for around £20k?

I know that on the surface the second hand option sounds better value for money but I also know that sometimes life is not as straight forward as just a few sums.

Any opinions please?

PS: please dont get me wrong; I am not tight with money but at the same time I am not wasteful with it either

 

[Abcan]

I think it would be more like 6k down and £400 a month for PCP on the new W213. I bought used S212 from MB dealer. It has a years warranty and I'll probably extend for a few more years. I like owning the car rather than a finance company owning it and don't tend to change every 3 years so buying out right suits me.

 

[Piff]

So, if you could get a low mileage 1 year old for £20K, after 3 years (same comparison as the new on on PCP) it would have about 40,000 miles on the clock and be worth about £9k as a private sale (or less if traded in). How much would be the loan cost over 3 years? Add that to the depreciation of £11k and you have your comparison to the £13-£15k pcp cost.

 

[TripleD]

Really depends on what you want and what you can afford.
PCP works well for me as I have a car allowance, so it's always about monthly payments rather than total value.
I look at changing every 3 years or so and try to go new/ex demo, nice feeling being the first owner, bad feeling that I lose more money than most people spend on a car!

Have you seen the loan rates you can actually get, ppl like Tesco advertise 3.4% but rarely do many get it.
If a car is under 25k I'd look at personal loan as pcp rates are high on used cars, if looking new then pcp or even pch is worth considering.

 

[Red C220]

Look at the real world mpg in my signature. One is an E220d the other is a 3.0 v6 twin turbo.

I do around 8000 miles a year in each car.

The answer to your question is determined predominantly by how long you expect to keep the car.

When we replace our diesel E it will be with a petrol, but I intend to keep the replacement for at least 5 years.

 

[Peter DLM]

Current deals on new E220 AMG are around 6 up front and £340 a month, 2 years, 10k.

 

[Deleted member 113659]

Couple of great leasing deals here:

https://www.contractcars.com/car-leasing/mercedes/c-class-leasing-offer/

https://www.contractcars.com/car-leasing/mercedes/c-class-estate-contract-hires-deals/

https://www.contractcars.com/car-leasing/mercedes/e-class-lease-deals/#alternative-payment-profiles

Ant.

 

[iliria]

Look at the real world mpg in my signature. One is an E220d the other is a 3.0 v6 twin turbo.

I do around 8000 miles a year in each car.

The answer to your question is determined predominantly by how long you expect to keep the car.

When we replace our diesel E it will be with a petrol, but I intend to keep the replacement for at least 5 years.

Well, if I did buy second hand I would certainly keep it for at least 5 years.

My present car is a Corsa and in the 8 years I've had it, it has never been serviced, never had any repairs, still has the original battery and spark plugs. All I have changed in it was the break discs once, break pads twice, and oil and filter every year. Oh yeah and tyres twice. I am sure that car is a Transformer

So, if you could get a low mileage 1 year old for £20K, after 3 years (same comparison as the new on on PCP) it would have about 40,000 miles on the clock and be worth about £9k as a private sale (or less if traded in). How much would be the loan cost over 3 years? Add that to the depreciation of £11k and you have your comparison to the £13-£15k pcp cost.

Good god! Is that how much they depreciate?

Current deals on new E220 AMG are around 6 up front and £340 a month, 2 years, 10k.

Peter, that works out at £14k over 2 years or 18k over 3 yrs.

The deal I have found is £3k upfront followed by 23 monthly payments of £280.

 

[iliria]

Couple of great leasing deals here:

https://www.contractcars.com/car-leasing/mercedes/c-class-leasing-offer/

https://www.contractcars.com/car-leasing/mercedes/c-class-estate-contract-hires-deals/

https://www.contractcars.com/car-leasing/mercedes/e-class-lease-deals/#alternative-payment-profiles

Ant.

Hi Ant. Thank you very much. They sound like very good deals indeed. It makes me puzzle how these companies can keep the prices so low when Mercedes showrooms charge a lot more.

 

[Little Lofty]

Couple of great leasing deals here:

https://www.contractcars.com/car-leasing/mercedes/c-class-leasing-offer/

https://www.contractcars.com/car-leasing/mercedes/c-class-estate-contract-hires-deals/

https://www.contractcars.com/car-leasing/mercedes/e-class-lease-deals/#alternative-payment-profiles

Ant.

Leasing used to be simple, 3+36, now it's 3/6/9 + 18/24/36/48 and now plus an additional £500. It might still be a good deal but I can't say I've ever seen a lease with 2 deposits.

 

[Deleted member 113659]

Leasing used to be simple, 3+36, now it's 3/6/9 + 18/24/36/48 and now plus an additional £500. It might still be a good deal but I can't say I've ever seen a lease with 2 deposits.

Yeah. I know what you mean. However, I think the £500 is their commission. Many other leasing deals don't advertise their commission rates. They only tell you on application.

At least this company seems to be a little more up front.

Ant.

 

[Delayed Steve]

My dealer tried push me into a pcp at 6% on a new car, I am lucky enough to have enough cash to pay for the car just sitting in the bank earning 0.025% ,so I preferred to pay for the car outright.
If you go for pcp be prepared to lose all the money you pay out, if you want to buy the car at the end of the deal be prepared to pay more than the cars worth to keep it. PCP suits some people but not me..
PPI lawyer's are looking at PCP deals for when the PPI thing comes to a end!
Any problems you have with a dpf filter won't be covered by the warranty after the first time.
You pays your money you make your choice, good luck with what you decide to do.

 

[iliria]

My dealer tried push me into a pcp at 6% on a new car, I am lucky enough to have enough cash to pay for the car just sitting in the bank earning 0.025% ,so I preferred to pay for the car outright.
If you go for pcp be prepared to lose all the money you pay out, if you want to buy the car at the end of the deal be prepared to pay more than the cars worth to keep it. PCP suits some people but not me..
PPI lawyer's are looking at PCP deals for when the PPI thing comes to a end!
Any problems you have with a dpf filter won't be covered by the warranty after the first time.
You pays your money you make your choice, good luck with what you decide to do.

I wasnt aware of the DPF filter being covered only once under warranty

I was given an offer on a C200d Executive SE. Brand new, 3k deposit + £250 per month over 3 years (fixed 5.3% interest) with a limit of 10000miles per year. The final value I have to pay if I want to keep the car is £14k.

Now, one thing i do not understand with PCP: if the final value of the car is £14k but when I take it in after 3 years the car actually has accumulated equity and is worth let's say £16k what happens to that £2k equity? If I hand the keys back do I get the equity refunded to me? Or can I take it if I decided to buy a second hand car instead?

 

[Red C220]

I wasnt aware of the DPF filter being covered only once under warranty

I was given an offer on a C200d Executive SE. Brand new, 3k deposit + £250 per month over 3 years (fixed 5.3% interest) with a limit of 10000miles per year. The final value I have to pay if I want to keep the car is £14k.

Now, one thing i do not understand with PCP: if the final value of the car is £14k but when I take it in after 3 years the car actually has accumulated equity and is worth let's say £16k what happens to that £2k equity? If I hand the keys back do I get the equity refunded to me? Or can I take it if I decided to buy a second hand car instead?

In theory if there's equity it is available to you.

The reality with MB finance products is there will be negative equity so this simply won't be a issue.

If you intend to keep the car beyond 2/3 years buy it outright or pay of the finance asap.

 

[iliria]

In theory if there's equity it is available to you.

The reality with MB finance products is there will be negative equity so this simply won't be a issue.

If you intend to keep the car beyond 2/3 years buy it outright or pay of the finance asap.

Well, the other option I have is to get a C200 SE petrol with 10000miles on the clock and registered in May 2016. It is an approved used and it is listed at £18900 which means that with a bit of haggling i could get it for £18k. I pay £3k deposit and then get a loan for £15k. The interest on the loan is 3.3% fixed and the interest I pay on it over 5 yrs is £1200. So the total cost of the car would be £19K. I keep it for 5 years at the end of which the car would have around 50000miles on the clock and I am assuming it would be valued around £7k?

So if I go for PCP I would lose £13k in 3 years = £4300 per year (deduct from that the fact that I will have the executive package and 2 years free servicing)

If, instead, I went for the used car option (and if the depreciation figures above are correct) then in 5 years I would have lost £12k = £2400 per year (plus i would not have the executive package upgrade on the car and I would not get 2 years free servicing)

Am i correct in assuming these figures? Because if I am then i might as well go for the used model.

At present time I have only paid £500 deposit (today) and have not signed any agreements so I think I still have time to change my mind.

 

[Delayed Steve]

You should change your title from iliria to Martin Lewis
You are going to lose a lot of money buying a MB, if you go pcp you will be in negative equity at the end so will lose everything you have paid, that's not just MB, I know people who sell for Ford and Toyota and they have the same problem.
I wouldn't bother with a SE they are stripped out poverty spec so are going to depreciate more, go for a sport at the least.
If you go for pcp the depreciation isn't your problem and that's what a lot of people like, you just hand it back and walk away.
In the end it's what suits you but you're going lose enough money to buy three new Corsa Stings in five years.

 

[Piff]

PCP figures you quote above (post 13) £3000 deposit + £250/month = total of £12,000 =£4,000/year incl servicing

 

[iliria]

Very true Steve. If I asked him for a job I bet I would get it

I went for the second hand C200 Executive SE petrol and paid outright. I would have gone for the sport version but I believe that it does have a stiffer suspension which wouldn't suit me. The executive package gives me the metallic paint, leather interior, reversing cameras and satnav which will do me fine.

I am keeping the car for at least 5 years so I will certainly get value for money and I will be able to see if a Merc lives up to its name. For me it will be a major upgrade anyway considering that the car I've been driving for the past 8 years is a 1.4 basic Corsa

I thought long and hard about it and PCP is definitely not for me. The Merc that i just bought has dropped from £31k to £18k within 1 year (and 10000miles on clock). I think that it has shed off the biggest chunk of depreciation.

My only question remaining is: I have been offered the GAP insurance for £250. Do I need GAP if I am buying outright?

 

[iliria]

PCP figures you quote above (post 13) £3000 deposit + £250/month = total of £12,000 =£4,000/year incl servicing

Sorry, I forgot to add the £1200 for trading in my old car which adds £400 per year over 3 years.

 

[Piff]

To check the used value at 5 years old, go on Autotrader and search for 5 year old 50,000 mile C classes of similar spec in your area. Should give a reasonable comparison of what they are selling for.Obviously you would get less than that if trading in.