Should I go for this new Nissan Note?

Should I go for this new Nissan Note?

New car purchase PCP or HP? Our only family car is 15 years old and needs to be replaced. We have gotten a €8000 car loan from our credit union which is repayable over five years (APR 8%). In recent weeks we have been looking at the second hand car market but to our surprise the possibility of buying a new 161 Nissan Note (1.5 Diesel) caught our attention as we recently strolled into a Nissan dealership. Buying a new car makes sense due to the lower car tax, a more economical diesel engine, everything is new in it, there is a three-year free annual servicing and a five year guarantee (not sure if that includes parts and labour). The Nissan Note model we are looking is priced at €18000 but this is offset by a €4000 trade-in against our car (which is worth €300 at most) . Hence the new Note car would cost us €14000. We could use the €8000 credit union loan towards the purchase of the new car but are leaning towards a PCP (over 36 months with a final payment) OR HP payments over 60 months with no final payment. Therefore, is PCP or HP better when buying a new car or have we become caught up in the 'recovery' and should stick to our credit union loan and buy a second hand car for €8000? Oh, just to say that we have no connection what so ever to Nissan. Regards, Paul and family

Our answer:

Hi Paul,

Well, PCP is a great idea as long as you're planning to trade the car in again at the end of the agreement and get another one. Otherwise, if you're planning to keep it, you have to make the repayments and put aside money for the final payment, which will probably be at least €8,000, depending on the agreement. 
 
If you're planning to keep the car for longer then a classic HP agreement would be a better idea. You'll still get all the benefits of warranty, servicing etc, but with no final big payment. It will cost a little more in terms of monthly repayments, but it could work better for you in the long run. 
 
However, I would say if you want to buy new, then just pay back the Credit Union loan. It's never, ever a good idea to have two loans to pay back at once. Just hand it back and take the finance from the car maker, or go back to the Credit Union and get a loan to cover the full cost of the car. Don't mix and match.

Otherwise, just stick to your existing budget and buy second hand. That's the safest option. 

Shane O'Donoghue

Have a motoring question? Ask us here!

Ask us anything motoring related and please provide as much information as possible so we can give you the most accurate advice.

For more information please read our privacy policy.