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PCP has become one of the most popular ways to finance a new car in Ireland. But while the monthly payment can look affordable, it doesn’t always tell you much about the true long-term cost.
In this video, I compare two people buying the same €40,000 car. One buys the car outright and keeps it for 15 years. The other uses PCP and replaces the car every three years.
We look at:
• Why focusing on a €450 monthly payment can make an expensive car feel more affordable
• How deposits and monthly payments can add up over multiple PCP agreements
• The impact of repeatedly driving cars through their highest-depreciation years
• What happens if the cash buyer invests the money they would otherwise have spent on car payments
• How the numbers could develop over both 15-year and 30-year scenarios
• Why visible spending and building wealth can lead to very different financial outcomes
PCP isn’t necessarily a bad decision. If you love having a new car and can comfortably afford it, that may be exactly how you want to spend your money.
The important thing is understanding the total cost and opportunity cost, rather than looking at the monthly payment alone.
If you’ve had a PCP, what did you do at the end — buy the car, return it, or roll into another PCP?
Figures used in the video are illustrative and depend on assumptions including investment returns, car costs, maintenance and future PCP terms. This content is for educational purposes only and does not constitute financial advice.
Credit to : The Financial PT