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I'm near retirement and am looking to buy a new car. Should I buy outright or go for something on a PCP?

I'm a year off retirement and am lucky to have a decent pension and lump sum. I want to get a new car this year, so should I buy cash now or still do a PCP for 3-5 years? Over the years I've owned a Volkswagen Golf GTI, Audi TT, Mercedes SLK, Porsche Boxster and now have a Volkswagen Golf R - I'm considering another Golf but fancy a MINI, maybe a John Cooper Works. I might move to Devon so need to consider narrow lanes.

Asked on 21 March 2023 by Susie

Answered by David Ross
Given you are in a strong negotiating position, whether you choose a PCP or buying outright really depends on your needs. Buying outright gives you the option of shopping around, while a PCP would mean a little less choice and paying a bit more overall, but also the option to change your vehicle more easily once you've paid 50 per cent of the total amount payable. From a purely financial perspective buying outright likely works out a little cheaper, but the most cost-effective option would be to buy a car that is between one and three years old to avoid the biggest chunk of depreciation.

You don't mention whether your current Volkswagen Golf R is owned outright or also on a PCP, but it would be well suited to narrow lanes being relatively compact. A MINI John Cooper Works is a little smaller still and would also be a good choice, although you might find it a little slow compared to your current Golf.
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