Saturday 3 December 2016

Car to commute in? Saloon, SUV or MPV? Why the lower PCP rates?

Published 04/11/2015 | 02:30

For a long commute - you need a diesel.
For a long commute - you need a diesel.

Aidan Timmons and Eddie Cunningham answer your queries.

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I went back to work this year and now have a long commute - about a 90km round trip. My Toyota Yaris is old but in good condition and I am giving it to my eldest daughter. We don't have a lot of money but we need a good car for the journey and the winter. I have €12,000 and would value your advice.

Aidan: It is nice to hear you are getting back to work. Take that journey on a daily basis for 50 weeks of the year and you are covering more than 20,000km a year, plus whatever distance you are putting on at weekends. You need a diesel.

The trick here is to buy something with as low an odometer as possible. This is a little easier done nowadays than it was five years ago. Many people who should have bought petrol car bought diesels instead to get lower motor tax.

One consequence of that decision is that some diesel cars now have what many would consider typical petrol mileage. You might not fall over such examples, but search hard enough and you will find them.

Start with the Ford Focus. The diesel engine is good and the drive is great. You might just sneak into the first of the newer shape 2011 models here. There are lots of old 2011 models around and they came with loads of kit so they make for a nice car.

The Toyota Auris/Corolla 1.4 D4D is a super car too. You've owned a Yaris so the brand is familiar to you. Something worth mulling over is putting a sizeable chunk of your money into a deposit on a newer/new car and taking out finance, but that is a very personal decision. Eddie recently did a great piece on PCPs so can give you some things to watch out for.

Eddie: Good choices, as usual, from Aidan. I might broaden the menu a bit because there are some really good alternatives.

One of the most obvious is the Skoda Octavia. I know there has been a lot of negativity around Volkswagen Group cars over the past six or seven weeks, but you are still looking at a lot of car for the money. And you can check if it is affected by the recall. The dealer will tell you. I would be opting out by not mentioning it, so there. Big sturdy car for the commute. And as a cash customer you are in a doubly-strong position.

I like the KIA cee'd diesel too and depending on how you get on you could find yourself with a car that has a few years' warranty still on it.

I won't overwhelm you with too many more because sometimes a big menu is more confusing than a 'set choice' but the Peugeot 308 diesels are excellent and you could get a good deal on one.

As ever, given your dependency on a car to commute, please check your prospective purchase's service record. If there are any breaks in it, then I wouldn't touch it

For now I'd recommend you spend your €12,000 on a straight deal and leave the PCPs until next time.

Would you advise me to buy a saloon? I have two young children and have always had a saloon, but now I read so much about these crossovers and people carriers, I am wondering if I would get better value for my money. I have a budget of €20,000 along with my Toyota Corolla (2008) so I want something that will last me a good while.

Aidan: For a start, you have a healthy budget so every option is available to you.

Crossovers have become enormously popular and mainly to the detriment of saloon sales. From my own humble standpoint, Irish buyers have always loved SUVs but when the motor tax system changed in 2008, most of the existing SUVs came with unpalatable motor tax rates.

Most were also a little too big for what the average family needed, as the SUV was usually the second family car.

Crossovers are steadily growing in size and the current crop of new models from Hyundai and Kia are testament to that. If you were to explore this avenue further, I would suggest firstly going to a Toyota dealer with your Corolla and seeing what deal can be done on a new or demo model RAV4. It's a very well rounded machine and lots of Avensis drivers have swapped their three-box saloon for one, which might concisely answer your question in and of itself. Opt for a Luna model if you can. It is better equipped than the Aura.

Nissan's Qashqai is still as excellent as ever. The latest model came out last year and for many is still the car in this class to beat.

The Kia Sportage and Hyundai ix35 have just updated their models (the Hyundai is now called 'Tucson'… again). There should be some good deals on the last of the run-out models.

If you plan on expanding your family further, then perhaps it's best to look at an MPV or even an estate, but for now, a crossover should tick all of your boxes.

Or, if you want the tall sitting position of an SUV but more space, then the Honda CRV is the one to have.

You'll need to find a used 132 or 141 1.6 litre model as the old one has a 2.2 and is probably not what you are after.

Eddie: Aidan has hit the nail on the head by advising you to go to your dealer first - and if you don't get any joy there (and I'm sure you will) then you can go elsewhere because you have a trade-in that is valued across all marques.

Dealers love to see a Corolla coming in. They are good currency.

Before that, please sit down and work out what you want from your car over the next three or four years. Forget about current fads and what the people down the road are driving. You have got a lot of money at your disposal and you need to make sure you extract every euro of value from it. That means starting with you, your family and the likely needs and demands for transport of a young, possibly expanding, but certainly growing, family.

These few words apply right across the spectrum as people do tend to buy something because it is in fashion.

When you have that worked out - and take a little time at detailing what a typical day/weekend would involve - you will have a much clearer picture of what is best for you.

My gut instinct is that you will go for a Crossover or people carrier simply because they are that bit more versatile and accessible than your saloon. But you need to be happy with the higher position of those vehicles and the fact that they are bulkier, will take up more space on your drive or in your garage. You are lucky to be in a position to command such choice.

If you forced me I'd say switch to a people carrier. They are designed with families in mind. The Toyota Verso might be the one, seeing as you are already with the brand.

I know ye did a big piece here recently on PCPs, but I'd like to know the following: why is it, and who is paying for, what appear to be low rates? In some of the cases I have checked the rate is 3.9pc; many are under 5pc. Even at 6pc they are still a long way ahead of banks. Why is this? You didn't explain.

Eddie: I'll take this, Aidan, if you don't mind. Essentially the lower rates are due to two major factors.

The first is that carmakers such as the Volkswagen Group and BMW have their own banks. That means they can funnel a lot of money into making the purchase of one of their cars quite an attractive PCP option. That begins the merry-go-round: more cars are sold, there is a good return on the money 'loaned' (because there are ridiculously low deposit rates out there) and the PCP set-up is such there is likely to be a continuation of custom from buyers.

The second one is that many carmakers subvent the cost of the money.

In other words they take a financial hit so they can be competitive on PCP rates. Doing so, one presumes, involves lowering margins per car and/or reducing wriggle room at point of sale, etc, for dealers.

It is all about volume out there at the moment; market share is king and getting customers is the name of the game.

We hope that answers your question.

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