More Car Financing Shenanigans

The Nissan Ariya vs. The Tesla Temptation

Photo by Austin Ramsey on Unsplash

Alright, folks, buckle up. You must sick of me talking about car financing, but this is the last one. I promise.

(Until the next one.)

I’m three weeks into a 24-month PCP (Personal Contract Purchase) term with my 2023 Nissan Ariya. That’s right, a sleek, eco-friendly marvel that cost me £28,500, including a £2,500 cash deposit. My monthly payment? A cool £425. Insurance? £90. Haven’t even made my first payment yet. But here’s the kicker: my heart is set on a Tesla Model S.

But before diving into the nitty-gritty of my car conundrum, let’s talk about how PCP and HP differ.

Personal Contract Purchase (PCP)

PCP is a financing option where you pay a deposit and then make monthly payments for the duration of the term. At the end of the term, you have the option to either pay a lump sum (the Optional Final Payment or OFP) to own the car, return the car, or trade it in for a new one. The dealer sets a Guaranteed Future Value (GFV) which protects them from depreciation, but it also means I can drive a car that I couldn’t afford to buy outright.

Hire Purchase (HP)