Cash or PCP?

I am going to buy a new car in the near future and have been advised by the dealership that I should take out a PCP in order to take advantage of a £1000 manufacturer deposit contribution and a cut price service deal, saving around £1250 in total.

They said I could pay as little as 3 payments and then settle the PCP. They also told me it would only cost two months interest penalty plus the interest paid. If I put down a large deposit (30-40%) obviously the interest would be much less (and the penalty). Should I take this option, or should I push for a bigger discount as I am able to buy with cash and have the cash available?

Asked on 22 March 2012 by Jonners999

Answered by Honest John

You have to ask yourself where the discount is really coming from? If it is available for a finance deal but not for a cash deal, then what is financing the discount? It's the kind of question honest politicians should have been asking bankers 10 years ago. But there aren't any honest politicians. That is why bankers get away with stealing a thousand times the amount of money that earns a bank robber a 20 year stretch.

Tags: buying buying a new car pcp finance

Dear Honest John,

Please help me choose my next car. I would like it to have:

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