Only 3k in savings

Congrats OP, why not open an account on Degiro or Trading 212 and invest the amount that was going on monthly pcp payments into shares or better Investment Trusts (less risk)such as SMT , you'll retire a millionaire if you stick at it given your age now. The magic of compounding at your age will lead to a very nice (early) retirement

Where does it say he was paying it off in 1 year?

I'm a big fan of investing. But rule number 1 is always emergency savings, held in cash. Depending on a number of factors (age, dependencies, job stability, obligations etc), this can be anywhere from 1 to 12 months salary. Only after you have that tucked away should you consider investing with the excess.

But they should be the last people to borrow money. If someone isn't financially mature/savvy etc enough to manage savings and financial security etc, then they are not financially mature/savvy enough to be taking on risk and debt. The '08 crisis should have been enough for people to realise that.

How much a person should keep in liquid, safe form depends on a number of factors. Take 2 extremes:

Person 1 is in their early 20s, single, with no kids, in a permanent job in public sector, renting a room with no lease, doesn't have a car, no debts and still has a room in their financially comfortable parents house needs no more than a month's salary. They are unlikely to lose their job, nor have any reason to expect sudden large expenses. But even if the unimaginable happened, they would likely be helped by their parents and worst case scenario move back home. Likewise, if they do need to cut down on living standards for a while until they are back on their feet, it is only impacting themselves.

Person 2 is in their 50's, married, where they are the main breadwinner, with kids, with an underlying health condition, has an old car which they need for work, in a temp contracting role in a volatile sector with a large mortgage (and high LTV), with other debts and/or other financial commitments and whose parents are no longer alive (or otherwise unable to help them) would want a serious chunk of money in liquid, safe form. In this scenario, there is a significant chance that this person could experience a significant period of unemployment, either due to job market drying up or health reasons. There is also a significant chance that they may need to deal with a sudden large expense, be it for themselves or their kids/spouse. If they do come upon unfortunate circumstances (quite possible!), they also have nobody to help them or anything to fall back on. Tie in their job loss with a stock/property market crash etc, and they could be in serious trouble (so the last thing they would want to do is be forced to cash in and sell at a low point). Added to that is the guilt felt from having their spouse and children also share in the sudden & drastic cut to their living standards can make the idea unbearable for many people.

There is no specific amount, and is better expressed in terms of months of salary, and is ultimately down to each individual's risk aversion. The standard that most people agree on is between 1 month's salary (for those whose circumstances are close to person 1) to 12 month's salary (for those whose circumstances more align to person 2**), with most people being somewhere in between.

Remember, investing in something like the stock market will get you the best return on average and I strongly recommend it to most people for their excess* savings. But that average is only realised over the long term. Short term is down to luck, and could go drastically in either direction. A stock market downturn or crash is not a bad thing, as it will recover in time, as long as you can afford it give it time. Ultimately, for every euro you invest, you want to be able to cash in at a time that is highly profitable and suits your long-term financial plan, not when it is at a low point but you have an urgent and desperate need for cash. The purpose of emergency savings is to have money to meet realistic "negative" events that could occur. The purpose of investment is to use that capital and grow your wealth.

*excess, in this scenario being savings in excess of emergency funds + any moneys they anticipate spending/needing in the near future (buying a new car, deposit for a house etc).

Mod: removed profanity

Why stay clear of PCP? wouldn't it depend on the rate of interest and how much the person was individually able to pay initially?

From looking at the costs, they seemed to be the best option to repay a car over a set time period, rates are usually better than a CU loan.

I'm open to correction or opinion as I was planning to go that route myself.

Alternatively, he might be smart about whom he shacks up with