Pros and cons of PCP vs keeping old bike

[dern]

It's Friday so struggling to concentrate on work and the mention of PCP in another thread had me looking at what deals are available and half considering changing my bike, the KTM 1190 ADV S.

Reasons to keep the KTM...
- I like it, it's fast but it is pretty heavy
- I've never had any issues with the bike so far in the 5 years of ownership
- I have no debt, I'm not a massive fan of credit but have used it in the past, I don't have a big lump sum to put against another bike

Reasons to replace it with something on PCP
- The KTM is nearly 10 years old and KTMs don't have the best rep for reliability, it's complex, etc
- Costs will be more predictable and the failure rate will be lower with a new bike

I'm ok with all the other bikes being older as they never get used for distance but the KTM does. My next trip is to the south (ish) of France so its age is on my mind although while I'm pretty sure that it will be fine I'm not as sure as I would be with a new bike.

The bike I was considering was the Honda AS Africa Twin by the way.

Any thoughts or "stay away from PCP" stories? Cheers

[weeksy]

TBH with your description above, i'd stick with the KTM.

It's only 'credit' if you're finding it a challenge to pay it... otherwise, it's just a method of purchasing something.

[KungFooBob]

If the PCP rate is lower than the rate of HP or a personal loan it can be worth doing.

Occasionally you get 0% PCP, then when the 3/4 years are up you take out a smaller loan than you would have needed to pay off the the final lump sum.

Other than that, I don't think I'd bother with PCP.

I think it's good that other people use it, means theres plenty of 2nd hand three year old bikes available for loads less than a new one.

[westers151]

My mate in financial circles bangs on about "renting" assets so that you don't tie up your capital in them, plus it allows you to easily refresh it. That makes sense to me in a commercial sense, but I struggle with it in my own finances. I tend to buy ex demonstrators (cars and bikes), and then keep them for longer than 3 years, so PCP would cost me more.

If you like to refresh your bike often, it's a great way of making that affordable. That's my view, and works for me

[westers151]

If the PCP rate is lower than the rate of HP or a personal loan it can be worth doing.

Occasionally you get 0% PCP, then when the 3/4 years are up you take out a smaller loan than you would have needed to pay off the the final lump sum.

Other than that, I don't think I'd bother with PCP.

I think it's good that other people use it, means theres plenty of 2nd hand three year old bikes available for loads less than a new one.

Yeah, but 0% PCP isn't really 0%. The finance cost will have been built into the "purchase price", either by price inflation, or by taking it out of the profit margin in order to shift units.

[Supermofo]

In terms of the 1190 reliability, my mates 1290 Adv s has 115,000 miles on it now. Never broken down and everything inc leccy suspension still works. Finish has held up as well

[Dodgy69]

Keep the 1190. It's your touring bike and a brand spanker has more chance of getting nicked when parked up on some dodgy campsite or hotel carpark.

New bikes need to get back to the garage.

[Le_Fromage_Grande]

PCP is an expensive way to own nothing

[dern]

PCP is an expensive way to own nothing

Without disagreeing with you the other side of the coin is that it's a cheap way to have the use of a lot more than you otherwise would.

[Count Steer]

PCP is an expensive way to own nothing

Without disagreeing with you the other side of the coin is that it's a cheap way to have the use of a lot more than you otherwise would.

Or to put it another way it's renting a liability not an asset. (Still stinging from the 30k miles service+ bill for my car...which I own and, for a while after, wished I didn't ).

[Trinity765]

Depends how many miles you intend to do. If it's low milage, you may be even at the end of the term. If the bike has high milage you may be out of pocket.

Unless you get a new bike at the end of the term, on another PCP. It's practically the same as renting a bike.

[Cousin Jack]

IME 10 year old bikes were built to a better standard than new ones. Honda have certainly dropped some standards recently.

[wheelnut]

PCP is an expensive way to own nothing

Or a cheap way to free up cash for other things.

Other opinions are available.

[MyLittleStudPony]

PCP? That's the pension stealer of vehicle purchasing.

[Le_Fromage_Grande]

PCP is an expensive way to own nothing

Or a cheap way to free up cash for other things.

Other opinions are available.

When is borrowing money cheaper than paying cash?

[KungFooBob]

PCP is an expensive way to own nothing

Or a cheap way to free up cash for other things.

Other opinions are available.

When is borrowing money cheaper than paying cash?

When the interest rate on the loan is lower than the rate you have on your savings.

I'm not sure if this has ever happened.

[Le_Fromage_Grande]

You could possibly achieve that if you added the money to your mortgage when rates were stupidly low.

[Couchy]

PCP is an expensive way to own nothing

Or a cheap way to free up cash for other things.

Other opinions are available.

When is borrowing money cheaper than paying cash?

If I have £10k in cash and I pay it into my pension it’s then £12500, it then based on the last few years earns 7% a year. A PCP deal with a low interest rate costs less than that. If you’re of a certain age you could be better off putting some away into a pension.

[Le_Fromage_Grande]

Blowing the cash on drugs and bookers would be a better use of it than putting it in a pension (I'm not expecting a long life)

[KungFooBob]

Blowing the cash on drugs and bookers would be a better use of it than putting it in a pension (I'm not expecting a long life)

Coke and a Cash and Carry.

Hardcore!