Are the wheels about to fall of car finance?

Are the wheels about to fall of car finance?

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Discussion

smartypants

38,963 posts

108 months

Thursday 18th October 2018
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Baron von Teuchter said:
It's lucky that i like old sheds. With £100k to spend on cars i'd probably have about 20 of them. Can't do that on PCP wink
Same. I'd have all sorts of crap. Currently got a 14yo 3 series, 9yo FFRR and a 30yo Kawasaki smile

Just can't find me a car I'd get excited about shoving £300+pcm into over 3/4 years. Last one I did that on was my TVR (personal loan). Well worth it biggrin


Earthdweller

1,483 posts

65 months

Thursday 18th October 2018
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Edible Roadkill said:
piston25m said:
Edible Roadkill said:
But they have their own finance arm of the company now they are in their own rights a bank. So why wouldn't they want to monopolise on used credit as well as new??
I suspect so people come into the dealership looking at used cars and leave with a new car. I could have a used one for £300 a month and £3000 down, or a new one for the same amount.

Trouble is we have a huge used car market flooded with ex-PCP cars and no one to sell them to. What will happen with that I don't know.
Clearly this is what happens as I see evidence to support this all the time I'm just at a loss as to how it's tangable business plan. The used cars must need to be resold and filtered out somewhere.
Ireland is flooded with them

It is having a massive impact and seriously distorting the market in the Republic

Cars in ROI are very highly taxed new and imports are also heavily taxed, but due to the huge difference in prices between the U.K. and ROI it still saves money importing from the U.K.

https://www.rte.ie/lifestyle/motors/2018/0512/9630...

Sheepshanks

16,624 posts

58 months

Thursday 18th October 2018
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Mandat said:
Edible Roadkill said:
Why the heck do people still PCP ???
There are pros and cons with all of the methods of financing a car, even when paying in cash.

PCP works differently to leasing, which is why it will appeal to some people and not to others.

A big part of the problem is that lots of people don't understand how it actually works.
Big issue with leasing is that it's not flexible so if your circumstances change you're pretty stuffed.

You could well be £K's out of pocket if you terminate a PCP too, but worst case with a lease you could be liable for the full rental, or heavy excess mileage penaties if your type of use changes.

Ares

8,026 posts

59 months

Thursday 18th October 2018
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Sheepshanks said:
Big issue with leasing is that it's not flexible so if your circumstances change you're pretty stuffed.

You could well be £K's out of pocket if you terminate a PCP too, but worst case with a lease you could be liable for the full rental, or heavy excess mileage penaties if your type of use changes.
Not always. I have a get out clause on mine (I'll check, but I think 3 months charge if under pro-rata mileage, otherwise quite a stinging over mileage charge)

....but, the lease was well over £150/mth cheaper than a PCP (plus saving the £450/yr RFL), so it'd take a fair chunk to be detrimental...plus, the PCP deals I've had previously have likewise had a charge, and there is often negative equity until 75% of the way through the contract...., unless you do a forced voluntary termination which can leave a black mark on your credit history.

However, as with all things, you factor changes into your life as much as possible. Anyone going into a long term contract needing that flexibility is perhaps looking at the wrong option.

Sheepshanks

16,624 posts

58 months

Thursday 18th October 2018
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Ares said:
Not always.
I did say 'worst case'. VWFS seem to allow termination for 55% of outstanding rentals. but people have said on other marques / funders they've been asked for 100% when they've enquired.


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Ares

8,026 posts

59 months

Thursday 18th October 2018
quotequote all
Sheepshanks said:
Ares said:
Not always.
I did say 'worst case'. VWFS seem to allow termination for 55% of outstanding rentals. but people have said on other marques / funders they've been asked for 100% when they've enquired.
I was replying to this:

Sheepshanks said:
Big issue with leasing is that it's not flexible so if your circumstances change you're pretty stuffed.

gizlaroc

12,013 posts

163 months

Thursday 18th October 2018
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Sheepshanks said:
Did you take that deal?

There are deals and deals, but that seems too good to be true so I wonder whether you'd be told "oops, sorry, we made a mistake"?

A colleague did get a loaded 520 Touring on similar monthy payments, and the car was discounted by approaching 20%, but it's a £10K cheaper car to start with than your example.
No.

To be honest I have stopped financing cars and buying older.
I had just sold my E350 estate to buy a 535i Touring, and as the guy was coming up on 4 trains from Newport to Norfolk I got a text from the 535i seller saying he had sold it to someone else.

I was off to France the following week and had also sold my E61 530d Touring, the idea was sell the E350 and the 530d and get the 535i and an old 1977 Mercedes 350 SL.

Anyway, the 530d was sold, but not gone, the E350 had gone and I was getting desperate.
I saw the deal posted on here for the G31 520d Sport Touring and called them, they had none left but said they could do me a 530d for £20 a month more.
They had one in blue with light leather in stock.
This was the Thursday, I asked if I could collect on the Saturday and they said they couldn't sort it that quickly as it needed a PDI and washing.
That was the end of that.

To be honest, I didn't realise what a good deal it was at the time, when I had looked round on the Friday for other deals it became obvious just how good it was, I called them back but it was gone.

I called a few dealers and they all said the deal had to be done by July 31st so didn't leave them much time to find a car in stock and I was also off to France the following Tuesday and not back till August 4th.

But it was a blinding deal. Normally the sort of deal you see on 7 Series or S Classes, not 5 seris that sell well anyway.


I kept the E61 530d, and to be honest, as nice as a newer 530d would have been I still love the E61.