At first I was going to buy a used car for just £8,000 cash. Then I fancied something newer costing a good bit more at £15k.
I don't want to tie up £15k in a car at the moment. I'd rather tie up £8k now and pay the rest a few years later or spread out.
So I thought how about taking out a PCP and putting down an £8,000 deposit, 24 months. The dealer's website says the payments would be just £89/month with an optional final payment of £6,700.
They way I'm seeing it is: Total outgo if I wanted to own the car would be = 8,000 + 24*89 + 6700 = £16,836. Therefore I'd be paying £1,836 for the privelege of spreading the payments out - which I'm happy with.
When I told the dealer that this is what I wanted to do, he said "No way - that's not what you want to be doing!" He says that PCP's aren't meant to have such large deposits and if I want to buy it with such a large deposit then I'd be better off funding the other £7,000 with a bank loan instead of PCP. (But I don't want to do that because monthly bank loan payments would be £250 ish and I don't want a regular outgo as big as this in case it causes problems with mortgage affordability applications).
Is the dealer right? Is there something I'm not understanding about PCP? or is he just using a sales trick to try and make me take out a bigger debt / more interest?