New car on PCP or secondhand?

Hi,

I'm looking at getting a small family car that's going to have low running costs. I'm torn between taking out a PCP for a new car like a Nissan Pulsar or topping up the cash I have with a small credit union loan for a five(ish)-year old car like a Hyundai i20.

Any advice?

Thanks

Leah

Leah Murray (Ballina)

Jan 2016 Filed under: finance

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Expert answer

Hi Leah,

It all depends how long you want to keep the car for. If you're planning to change again in three years' time, then a PCP makes great sense as you get a new car (with a warranty) and you're basically protected from depreciation, plus your car is your deposit for your next car.

If you're planning to keep the car longer, then you're better off with a loan and a second hand car, although I'd suggest buying one younger than five years old and make sure you get a decent warranty with it, just to help keep costs under control.

Read our guide to car finance here

Neil Briscoe - Complete Car Advisor
@neilmbriscoe