hawk20
MB Enthusiast
But your not borrowing that £7.5k, as at the end of there 3 years you don't fully own the car. That money never switches hands unless you want to buy the car outright at the end of the agreement.
PCP is a way of you putting less "equity" into the car, as you only pay its depreciation, not its fully price. At trade in time with PCP you have nothing, and have to raise a deposit for a car yourself, as you have no (or in some cases where the car is worth more than the GMFV) very little equity in the car.
Thats why the true cost of PCP vs HP isn't always clear, as if you put in a sizable cash deposit with a PCP deal, you have to save that up again to put the same amount into a car in 3 years time. So you have PCP repayment + cash sum to save /month vs 1 HP payment. In my limited experience the 1 HP payment is a cheaper option/month.
View it as a lease where you pay for the amount the car depreciates whilst its in your possession. If you still want the car to keep after the term, you have to pay the full GMFV, and this of course can be financed.
If you delete the first paragraph of this I agree.
In the other thread I gave a link to earlier, I show how more it costs to own the car outright via PCP that via an HP deal. It is surprisingly little.
BUT you need to check that the APR is competitive with AA, Direct LIne, Alliance and Leicester etc as the MB one really is. And the price is right, with discount. And the GFV is good. All three are needed to make a good deal.