Just arrived here myself, need a new(er) car, have money in a stocks ISA that would cover it, but historically doing ~10%, obviosuly investments can go down as well as up, however...
...In a dealer the other day and finance deal at 5.9% APR, bank loans similar, and I am loathed to withdraw savings to pay the car off directly as there is a fair chance the savings would outgrow a cheap loan.
PCP does really increase itnerest though, as you have a huge balance to pay interest on each month, and 5 year loan / HP to clear the cost entirely is only a few quid a month more and saves a fair chunk of interest.
Come back to the halfway house now, 50% deposit to hedge my bets on if investments crash, vs if the boom, and it gives a very affordable 4 year HP - which brings in additional consumer protections, and can sometimes help get a better deal on the vehicle or some extra warranty thrown in etc. - worth paying an extra 1-2% for IMHO, especially with 50% deposit as it is not a massive difference to have some extra protection against a lemon.
