‘YOU CAN GO through the Credit Union, or eh… win it?’
When it comes to car finance, and PCP specifically – things can get a bit overwhelming, especially if your mind is probably focused more on finding the perfect car than how you’ll pay for it.
In 2016, about one third of new cars were bought with a PCP, along with 12% of second hand cars – but do we really understand exactly what we’re signing ourselves up for?
This option comes with a number of terms and conditions to adhere to over the term and a large, final payment if you want to keep the car. It is only at this point that you actually own the car.
While generally we have four options to pay for a new car – hire purchase, personal loan, personal contract plan (PCP) and cash or savings, PCPs are more complex and therefore tend to cause a lot of confusion for people.
In fact, the ones we spoke to weren’t even sure what its acronym stood for:
“Sounds like a drug…”
“Some sort of a chemical?”
“Isn’t it connected to the internet?”
It’s no great surprise then, that a lot of us also aren’t entirely sure how it works - while a good few realised that it’s also an option for buying a used car, many also thought that you can simply end a PCP by handing back the keys.
And as PCP is considered a loan, unfortunately any missed payments can impact on your ability to borrow at a later stage even though it’s not from a bank – a very important fact that not many people realised.
How did you get on with your answers? You can find out everything you should know about car finance here.
Think you know enough when it comes to car finance? If you think it’s a tricky business, you’re not alone. Make sure you’re fully up to speed on the different ways to pay for your car by visiting the Competition and Consumer Protection Commission’s car finance section before the next time you buy a new car.
To embed this post, copy the code below on your site
have your say