Car credit hits £58bn out of total consumer credit of £200bn
Discussion
Audemars said:
Well if you arent earning lots and especially if you have yet to buy your final home
You should know ! I still don't know where you park your fleet of supercars though !It's entirely possible to own your home (the final one is usually a downgrade anyway) and prefer to pay less than depreciation.
I don't mind if you drive an older car. I prefer not to as in the scheme of things, the delta is very small, in my experience anyway.
I have just taken out a PCP with a main dealer because the difference between the cost of the car, plus my deposit and the GFV is literally a few hundred quid on £16k.
The car has the potential to depreciate lower than the GFV. So for a few hundred quid I see it as insurance. The GFV is not silly either seems about right.
The car has the potential to depreciate lower than the GFV. So for a few hundred quid I see it as insurance. The GFV is not silly either seems about right.
I don't see the problem.
Before PCP my wife bought a 3 year old £10000 car and used it for 3 years and sold it for £3000.
£7000 / 36 Months £194/month excluding interest or servicing which brings it up to about £250/month.
Her first PCP was a new BMW1 Series which cost the same £250/month.
Now she has a new BMW 3 series on PCP which costs her £325/month.
She doesn't care about owning it, is not interested in keeping it, needs a car and can easily afford it, £325 being less than 10% of her monthly take home.
I think it's a good deal personally. Especially as I work away at sea and she had a reliable car with dealer back up included.
Before PCP my wife bought a 3 year old £10000 car and used it for 3 years and sold it for £3000.
£7000 / 36 Months £194/month excluding interest or servicing which brings it up to about £250/month.
Her first PCP was a new BMW1 Series which cost the same £250/month.
Now she has a new BMW 3 series on PCP which costs her £325/month.
She doesn't care about owning it, is not interested in keeping it, needs a car and can easily afford it, £325 being less than 10% of her monthly take home.
I think it's a good deal personally. Especially as I work away at sea and she had a reliable car with dealer back up included.
Audemars said:
And stop allowing your brain to even think about brand new cars. It should be what is the most reliable very very used car can I buy.
Or, how about "it's a free country, how about you f
k off and I'll spend my money how I want".It's not Eastern Europe, there isn't an 18 year wait for a s
tty trabant.nickfrog said:
Steve H said:
And yet -
There is that. I have no doubt that VW FS, who my contract is with, get a very good deal out of VAG (obviously!) and covers its capex with money at very very low rates.nickfrog said:
The only thing I have to show for it is that the car cost me £5.2k over 2 years rather than £7.5k worth of depreciation even if I had bought at the max discount.
Maybe the banks are buying at a greater discount than any member of the public is likely to achieve and that makes the difference?The other aspect is aggressive yield management. My deal was actually more than what other Phers who got it at £4,700. There is always a good deal somewhere if you jump fast and are not bothered about the badge or the colour.
I assume that the Brunters type huge buffer stocks are better value than the ensuing drop in overall value that a sudden flooding of supply would generate. That's also yield management but at the back end.
The numbers being argued over above reflect this. as a private buyer a lease deal should be more expensive than a cash purchase, that it isn't suggests that the industry is heavily discounting.
Another thread on the pros and cons of leasing a car! Must be the 3rd this week. Who really gives a toss? I’d be more concerned about debt people who clearly can’t afford it have taken out to HP a fridge, freezer, toaster, 57” TV etc... than someone leading a new Merc for £300 a month.
CraigyMc said:
Audemars said:
And stop allowing your brain to even think about brand new cars. It should be what is the most reliable very very used car can I buy.
Or, how about "it's a free country, how about you fk off and I'll spend my money how I want".It's not Eastern Europe, there isn't an 18 year wait for a s
tty trabant.If you have £100 left over after bills etc don't think that that £100 is available to spend. Its is about £5 that is available. This is probably over your head to understand.
BoRED S2upid said:
Another thread on the pros and cons of leasing a car! Must be the 3rd this week. Who really gives a toss? I’d be more concerned about debt people who clearly can’t afford it have taken out to HP a fridge, freezer, toaster, 57” TV etc... than someone leading a new Merc for £300 a month.
Or lack of adequate pension planning for an ever more ageing populationI am not ruling out leasing, having sold cars privately recently there is an attraction to just dropping it off an it being someone elses problem, looks like mine is going to a PHer who has been great but the number of "Whats you last price for cash innit mate" and phone calls discussing what make the new ball joints were and other minute details it gets a bit old, then there was the chap who couldn't get comfortable due to being a bit powerfully built, a day wasted hanging round as the traffic was bad, got to put a price on your time. Can always part ex but to be honest, if you PX and then sign up to the dealers finance you may as well lease anyway.
I think the key is to limit your expectations, lease a new car by all means but try to keep to your budget, avoid the scope creeping from a Fiat 500 to that Evoque, and keep something back each month for the deposit on next one as you will otherwise have nothing.
I think the key is to limit your expectations, lease a new car by all means but try to keep to your budget, avoid the scope creeping from a Fiat 500 to that Evoque, and keep something back each month for the deposit on next one as you will otherwise have nothing.
Audemars said:
CraigyMc said:
Audemars said:
And stop allowing your brain to even think about brand new cars. It should be what is the most reliable very very used car can I buy.
Or, how about "it's a free country, how about you fk off and I'll spend my money how I want".It's not Eastern Europe, there isn't an 18 year wait for a s
tty trabant.If you have £100 left over after bills etc don't think that that £100 is available to spend. Its is about £5 that is available. This is probably over your head to understand.
This doesn't actually make your point any more clearly, or move things forward.
The Moose said:
£58bil. What's that - less than £900 per person? Hardly a major deal.
That's a meaningless statistic as the debt burden is not evenly distributed across the population.Too many people treat debt in this blase fashion!
The point is that while the car credit probably isn't as great an issue as other debt as most of it isn't susceptible to interest rate rises, the problem is that it is an amount of debt added to other debt liabilities that could rise in the near future. People on the bubble may be face with choice of giving up their house or their car.
Which do you think they will choose.....?!
A realignment of the market is overdue, with the inflated 'asset values' of certain cars on finance needing a reality check, and an interest rate rise would probably be the catalyst for that.
PS. This is not another debate on the pros/cons of leasing/financing a car over outright purchase (and anyone even remotely venturing into that territory is missing the point and being an idiot).
Edited by r11co on Friday 6th October 12:31
Audemars said:
CraigyMc said:
Audemars said:
And stop allowing your brain to even think about brand new cars. It should be what is the most reliable very very used car can I buy.
Or, how about "it's a free country, how about you fk off and I'll spend my money how I want".It's not Eastern Europe, there isn't an 18 year wait for a s
tty trabant.If you have £100 left over after bills etc don't think that that £100 is available to spend. Its is about £5 that is available. This is probably over your head to understand.
r11co said:
The Moose said:
£58bil. What's that - less than £900 per person? Hardly a major deal.
That's a meaningless statistic as the debt burden is not evenly distributed across the population.Too many people treat debt in this blase fashion!
The point is that while the car credit probably isn't as great an issue as other debt as most of it isn't susceptible to interest rate rises, the problem is that it is an amount of debt added to other debt liabilities that could rise in the near future. People on the bubble will have the choice of giving up their house or their car.
Which do you think they will choose.....?!
Anyone recall that statistic that highlights how few people could raise £300 in cash within a month? same across the pond, and it's scary.
The trickle down from a shock will be huge, that's how crashes happen so fast.
Leins said:
BoRED S2upid said:
Another thread on the pros and cons of leasing a car! Must be the 3rd this week. Who really gives a toss? I’d be more concerned about debt people who clearly can’t afford it have taken out to HP a fridge, freezer, toaster, 57” TV etc... than someone leading a new Merc for £300 a month.
Or lack of adequate pension planning for an ever more ageing populationt that will emerge in 30,40,50 years time. Ok everyone must be enrolled onto a workplace pension great but when it’s the lowest possible contribution and is going to be worth 25p a year in 40 years time what is the point? Audemars said:
Yes it's a free country full of broke selfish people.
If you have £100 left over after bills etc don't think that that £100 is available to spend. Its is about £5 that is available. This is probably over your head to understand.
But it’s not full of broke people at all. You can’t judge others by your own situation.If you have £100 left over after bills etc don't think that that £100 is available to spend. Its is about £5 that is available. This is probably over your head to understand.
Interesting statistic reported in the Independent today.
The average price of a used diesel car ROSE from August (£14360) into September (£14642).
So much for the tanking residuals on dirty diesels.
Cue chavs taking on more debt to fund those hideous white aspirational
Evoques and such like complete with illegal narcissistic chavplate....
The average price of a used diesel car ROSE from August (£14360) into September (£14642).
So much for the tanking residuals on dirty diesels.
Cue chavs taking on more debt to fund those hideous white aspirational
Evoques and such like complete with illegal narcissistic chavplate....
daemon said:
charltjr said:
I still don’t understand what’s supposed to cause this mass defaulting on loan agreements which will bring the whole “system” crashing down.
Interest rates go up, but these are fixed rate finance agreements so the cost doesn’t change. Sure, when the next deal time rolls around it might be unaffordable, so they go used/cheaper instead.
Where’s the massive sub-prime lending to cause the huge losses? I’m not seeing it.
Exactly. You're not seeing it because it wont happen.Interest rates go up, but these are fixed rate finance agreements so the cost doesn’t change. Sure, when the next deal time rolls around it might be unaffordable, so they go used/cheaper instead.
Where’s the massive sub-prime lending to cause the huge losses? I’m not seeing it.
The car market will crash if Wall Street crashes. A Wall Street crash may be caused by massive interest rates or surging unemployment or a war or major terror attack.
But governments are wise now to crashes. They just print more cash with the press of a button and the panic subsides.
Long story short -- car debt is relatively tiny... and even if there is a crash, the government will just bail everyone out and kick the can down the road.
Fill yer boots. Buy the best car you want. Enjoy it while you can.
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