PCP dilemma

[J4CKO]

Meant to be picking up my sons new car from Ford today, initially signed a PCP agreement last Friday but its really expensive so we said it would be better to do on a personal loan, he couldnt get a decent rate so I just borrowed the amount off my bank and he will pay me back, however the funds have not arrived in my bank.

So, he is home from Uni to pick the car up but we are short 12 grand or so, is he okk to pick it up on the PCP and then cancel it and pay for the car without any penalty ?

[tighnamara]

Not any help but do kids at uni really take out loans to that value for a car.

Serious question and not criticising but how can these companies allow students to take on such debt, no wonder the young of today can't handle or nderstand the value of money.

I would be having a word with the company and cancelling outright.

[RRLover]

Jacko,
Yes you can.

[J4CKO]

tighnamara said:

Not any help but do kids at uni really take out loans to that value for a car.

Serious question and not criticising but how can these companies allow students to take on such debt, no wonder the young of today can't handle or nderstand the value of money.

I would be having a word with the company and cancelling outright.

Its an apprenticeship he is on, he is based at a Uni, he earns a salary so can afford the payments, doesn't have any other outgoings to speak of, he is doing well (always int he top 3 in the class) on the course (Airline Tech) and should emerge after the four years with a good salary, worst comes tothe worst I pay for it

[tighnamara]

Picked that up wrong.
Sounds a great apprenticeship, all the best to him.

[Sheepshanks]

J4CKO said:

.. is he okk to pick it up on the PCP and then cancel it and pay for the car without any penalty ?

Watch the time-scale - strictly you've got 14 days from signing to Withdraw. If it goes beyond that then your settling and you'll have to pay a couple of months interest.

There's no penalty as such, but you do pay daily interest for the days outstanding until you withdraw. It'll be a trivial amount though.

[Jon39]

tighnamara said:

... but how can these companies allow students to take on such debt, no wonder the young of today can't handle or understand the value of money.

Remember your words. In a few years time you might be able to say, " I told you so".

The Bank of England have recently voiced their concern about vehicle finance, and in particular the scale of PCP lending.
It has even been established, that a person earning a minimum wage income, might manage to be accepted for a PCP on a new £19,000 Mazda sports car.
The lenders are packaging their loans, good and bad risks together, and then selling them on to other investors. You may remember the same thing happened last time around. It was property mortgages that time.

[drainbrain]

Jon39 said:

Remember your words. In a few years time you might be able to say, " I told you so".

The Bank of England have recently voiced their concern about vehicle finance, and in particular the scale of PCP lending.
It has even been established, that a person earning a minimum wage income, might manage to be accepted for a PCP on a new £19,000 Mazda sports car.

The lenders are packaging their loans, good and bad risks together, and then selling them on to other investors. You may remember the same thing happened last time around. It was property mortgages that time.

You seem to be suggesting that the UK crash was a credit crisis. That's a common misconception and basic misunderstanding. It wasn't a property debt or credit crisis. Which is why there weren't a multitude of repossessions.

The UK crisis was centred on liquidity difficulties, not irresponsible property debt.

Edited by drainbrain on Thursday 1st June 23:13

[scott_evo]

tighnamara said:

Not any help but do kids at uni really take out loans to that value for a car.

Serious question and not criticising but how can these companies allow students to take on such debt, no wonder the young of today can't handle or nderstand the value of money.

I would be having a word with the company and cancelling outright.

You are 100% correct, I'm a student, I've mortgaged 3 properties and can borrow around £20k on credit cards.... crazy.