Opinion: Why financing a brand new Suzuki Jimny is a brilliant idea... or is it?

Opinion: Why buying a Suzuki Jimny on PCP is a brilliant idea… isn’t it?

Opinion: Why financing a brand new Suzuki Jimny is a brilliant idea... or is it?

The Suzuki Jimny is a flawed, outdated 4×4 that has barely changed since 1998 and is well overdue the axe. Suzuki knows this, which is why it’s finally going to bring out a new model next year.

But, despite its faults, we quite like the outgoing Suzuki Jimny. It’s got character, in a way the Defender had (remember that?), yet its dinky dimensions make it a funny thing to drive. Being Japanese, it’s less likely to break down than a Defender, too.

So much so that, when taking my parents to a Suzuki dealer to convince them of the merits of a new Swift, I found myself convincing myself that buying a Jimny would be an excellent idea.

Of course, the sensible thing to do would be to hit Auto Trader and spend as little as £1,000 on a secondhand Jimny. The earliest examples may be nearly 20 years old, and possibly led a hard life, but they’ll fundamentally be the same as a brand new one. And the £12,000-plus saved would go a long way towards upgrading a ropey example.

However, that’s like saying a pair of secondhand hiking boots are identical to a brand new pair bought from Millets. They might look similar, and do the same job, but buying new gives you more choice and the chance to wear them in yourself. The boots will be yours from day one – never having been soiled by someone else’s smelly feet. So, if I buy a Jimny, I want a brand new one.

Unfortunately, a brand new Jimny starts at £12,999, and I’ve not got that kind of cash to spend on impulse on a Jimny. So I did what the majority of new car buyers do – and started looking into PCP deals. With 0 percent finance stickers plastered over the Swift, I was hoping that offer might extend to the Jimny. It doesn’t. But let’s not write it off as a mad idea just yet.

How does PCP work?

The majority of new car purchases are now made using some form of finance – usually Personal Contract Plan (or PCP). PCPs are usually split over three years (occasionally slightly more or less), and are made up of three main factors:

  • The deposit. This is often around 10 percent of the car’s value, but does vary a lot between manufacturers. It can be as little as £0, other times it’s a third or even half the car’s value. The bigger the deposit, the less you’ll have to pay each month.
  • The monthly payment. You’re essentially paying off the car’s depreciation here – not its value. If, for example, you buy a £15,000 car that’ll be worth £5,000 when your PCP is up, you’ll pay £10,000 during your time with the car. If your PCP runs for 36 months, and you pay a £1,500 deposit, that’ll equate to monthly payments of around £235.
  • The balloon payment. Also referred to as the ‘guaranteed future value’, this is how much the finance company thinks the car will be worth when the PCP is up. If you wish, you can pay this figure and buy the car outright (this could be worth doing if the balloon value is rather conservative… i.e. lower than what the car would be worth on the private market). Alternatively, you can hand your car back to the dealer at this point, without any extra fees to pay unless you’ve gone over the mileage allowances or there’s more damage than reasonable wear and tear. Most buyers decide to ‘swap’ their car for another new model, extending their PCP.

Based on the entry-level SZ3 (the one I want – no privacy glass, alloy wheels or leather seats on my Jimny, thank you very much), Suzuki’s offering a 6.9 percent APR PCP deal based over four years. That’s with a £2,273 deposit – not outrageous, even if it could buy you a secondhand Jimny outright – and 48 monthly payments of £195. That starts with a ‘1’, so is good enough for me.

What would I do after four years? Hand back the Jimny with nothing to show for my cash? Not a chance. By then, Suzuki reckons it’d be worth a meagre £4,372. So, if I divide that figure over the 48 months I’ll have ‘owned’ the Jimny so far, it works out at just £91.08 per month. If I stick that money into a savings account each month, after four years I’ll be able to buy my Jimny outright. And by that point, Suzuki will have replaced the Jimny and mine will be well into future classic status. It’s practically an investment.

It’s worth noting that there’s a 6,000-mile limit on this deal – no good for most if you want to drive a Jimny every day. But as it’d share a garage with a Toyota MR2 and I’d be planning on buying it outright anyway, the mileage limit wouldn’t be a huge concern for me.

There’s a ‘but’ though, and it’s a big one. Assuming I can afford the £2,273 deposit, and I’m definitely planning on keeping it after four years, I could just get a bank loan for the remaining £11,000 and buy the Jimny outright in the first place. With banks offering low interest rates on loans at the moment, that means I could buy a brand new Jimny for around £240 a month. More than the PCP alone, but less than the PCP plus the extra £91 going into a savings account allowing me to keep hold of it.

The moral of the story, I guess, is that it’s worth doing some research if you’re looking into car finance. PCP deals often work out if you want a new car every three years, but do your homework first. There are often cheaper ways of buying a new car.

Will I buy a Jimny? Watch this space…

>NEXT: The Suzuki Jimny needs a proper send-off