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Driving Digest: Success on a plate?

09:00 21 March 2016

Could PCP be the answer to buying your new car?

Could PCP be the answer to buying your new car?


With March ushering in the latest 16 registration plate, and the biggest single month for car sales, motoring editor 
Andy Russell says try before you buy

any people don’t have thousands to spend on a new car but do have a couple of hundred pounds a month, which is why PCP is so popular. But many are still not clear how this form of finance works.

PCP, short for personal contract purchase, is similar in principle to hire purchase (HP), but you effectively pay off only depreciation in monthly instalments, commonly 36 months in line with most vehicle warranties, against a guaranteed minimum future value rather than the vehicle’s full cost. Because you pay off a smaller amount of money, the monthly repayments and deposit tend to be less.

At the end of a PCP agreement, there is a final value. Here you can give the vehicle back or part-exchange – it doesn’t have to be from the same manufacturer or dealer – and start a new PCP or pay the outstanding balance in cash or by refinancing so you own it.

If you choose to give it back the car must have not exceeded its agreed mileage, must have been serviced on time and need no repairs beyond normal fair wear and tear to avoid financial penalties.

Will sales March to new sweet 16 record?

March is traditionally the biggest month of the year for new car sales as it sees the first of the two annual registration changes.

March last year was the best month this century with nearly half a million cars registered in the UK, up 6pc on same month of 2014 to 492,774 units.

And with total new car registrations last year beating 2.6 million for the first time, sealing four years of consecutive growth, this March’s new 16 registration plate might even smash the half-million sales month barrier.

Test time: get it right

Few people buy clothes without trying them for size but it is surprising how many don’t try before they buy when it comes to a new car, a purchase costing thousands of pounds. A test drive is your chance to find out not only whether you like a car, but whether it meets your needs.

So here are my top 10 tips:

 Allow at least half an hour and drive on all kinds of road – a test drive in a town is of little use if you spend most driving time on main roads.

 Can you get in and out of the car easily?

 Can you adjust the seat and steering so you’re comfortable?

 Can you see the instruments clearly and reach the controls easily?

 Try reversing into a parking space to check all-round vision and blind spots.

 Take your children with you – are they comfortable in the back? It’s better to hear their objections before you buy, rather than every time you take them out!

 Take any child seats you use with you and check that they fit.

 Is there space for your regular shopping bags, luggage, golf clubs, pushchair etc? Can you fold the rear seats easily?

 Is the boot sill low enough? Will you be able to unload shopping and luggage easily from the back?

 Is it easy to fold down and move seats which is especially important in multi-purpose vehicles and people-carriers.


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