BOE signals interest rises...car bubble to burst??
Discussion
garystoybox said:
Actually, i believe a higher salary would just give her more income to spend on additional debt to service. Not for a minute would it be more money to save or pay off exisiting debt. Buy now definately pay later! Hence, i'm actually doing her a favour with the minimum wage......
What a crass thing to say. Utterly pathetic. mike74 said:
It may sound crass but the fact is a large majority of the population are feckless, financially irresponsible debt junkies and ten bob millionaires, all living way beyond their means thanks to cheap and easy credit.
Absolutely. The entire finance industry assume this. 85% of people who buy supercars are buying them on finance. On new finance costs are easily above 5%, so the debate about current BoE rates is irrelevant. Finance companies and car manufacturers make a fortune on the current spread between wholesale and retail rates. So be it. I had a major client (household name) who sold financial products including ordinary loans (cars, holidays) you link to your house loan. When they briefed us (this was years ago) the proposition made brilliant sense. Why pay credit card companies huge interest when the mortgage rate was substantially less? And if the value of your home edged up over time, so your credit limit could increase too. And you could pay down the debt as you wish. Win:win.
Except the firm assumed in all their calculations only a tiny minority pay down anything. Everything compounds.
They then said, the deal would have life insurance and other products like Inheritance Tax cover available. I scratched my head as the penny began to drop fast. I said (carefully, it was a big client) ''so you're assuming the debt will never be paid and the when the punter dies, the insurance covers it?'' The client said ''exactly, lifetime value dear boy'' with a broad smile on his face. The client said people are simply incapable of paying down debt and this was an excellent way for them to manage it.
And make a huge profit too.You pays your money...........
mike74 said:
It may sound crass but the fact is a large majority of the population are feckless, financially irresponsible debt junkies and ten bob millionaires, all living way beyond their means thanks to cheap and easy credit.
The reality is, that unless you are super conservative, most of us have pushed ourselves just that little bit further than we should have done to buy a car/house etc. Then, depending on how scary the experience was, you do or don't do it again!One thing I will say though, having to wait for something is an experience lost on those that can afford to buy tomorrow what they decided they wanted today. I have a Caterham on order, which is taking a year to be delivered (5 months to go) and I think it is great to look forward to something for so long. It will be all the more special for the wait.
Interesting post with some interesting points.
I had no idea 85% of supercars were bought on finance. My dealer is desperate to sell me finance on my 488. As someone else said the interest on the loan will be at least 5% I would be better off borrowing money against my house at 2% than taking out a car loan at 5%
What else is amazing is it's become tough getting a mortgage on a house yet getting a loan on a car is easy.
Before I read this thread I thought an interest rate rise would not effect supercar prices but if 85% are financed and people on big salaries lose their jobs or have to relocate to the EU then demand might fall.
I had no idea 85% of supercars were bought on finance. My dealer is desperate to sell me finance on my 488. As someone else said the interest on the loan will be at least 5% I would be better off borrowing money against my house at 2% than taking out a car loan at 5%
What else is amazing is it's become tough getting a mortgage on a house yet getting a loan on a car is easy.
Before I read this thread I thought an interest rate rise would not effect supercar prices but if 85% are financed and people on big salaries lose their jobs or have to relocate to the EU then demand might fall.
garystoybox said:
Chrism355 said:
garystoybox said:
100% agree. The use of the word 'entitled' is accurate. Everybody thinks they have the right to this, that and the other, regardless of age, experience, earnings, etc. Not living in the real world! E.g. My cleaner, probably on minimum wage, turned up last week in a new BMW 140M!
Perhaps you should consider paying your cleaner more than minimum wage, then she could afford a higher standard of living without getting into debtGassing Station | Supercar General | Top of Page | What's New | My Stuff