Are the wheels about to fall of car finance?

[nickfrog]

VGTICE said:

Some are too simple to realise that the problem here is not with those who are prudent and have basic understanding of maths and finance which enables them to select the best option. The problem is the majority who think that low monthlies equal good deal ignoring other important aspects like the price, length of term, interest rate, first rental/deposit.

Some people are smarter than others. That is precisely why car lease/finance is so intensely yield managed and that some deals are terrible and others are terrific. Do you think Easyjet should sell every seat on a plane at the same price ?

Saying that all finance deals are poor is as absurd as saying they're all good. It's not a binary question.

Neither you or I have the data to distinguish if the majority of people are prudent or thick - because it doesn't exist as it's not a binary question either.

[VGTICE]

daemon said:

???

Heres what you wrote -

VGTICE said:

I remember before 2007/08 people like you were saying that subprime was minority

You need to let your modem buffer the page completely before you respond to posts. Here's what I wrote

VGTICE said:

I remember before 2007/08 people like you were saying that subprime was minority and there's no chance in the world anything bad could happen.

That small point at the end denotes the end of sentence which as a whole forms a logical structure. Basic stuff, primary school styleee.

daemon said:

I dont see it as an "incoming fk up" because with the mortgage crisis it was the individual who was hunted in to the ground for the shortfall. With this if there is a deficit in owed at end of term v actual value its the finance companys problem.

Amazing, which school of economics teaches these gems?

[nickfrog]

Yipper said:

Most PCH (lease) deals are a rip.

Is it still a rip if it's comfortably less than depreciation ?

[Granfondo]

He's got form for altering people quotes VGTICE!

[daemon]

VGTICE said:

daemon said:

???

Heres what you wrote -

VGTICE said:

I remember before 2007/08 people like you were saying that subprime was minority

You need to let your modem buffer the page completely before you respond to posts. Here's what I wrote

VGTICE said:

I remember before 2007/08 people like you were saying that subprime was minority and there's no chance in the world anything bad could happen.

That small point at the end denotes the end of sentence which as a whole forms a logical structure. Basic stuff, primary school styleee.

And in what way does the latter part of that sentence change the former????????????

Edited by daemon on Friday 23 June 22:58

[daemon]

VGTICE said:

daemon said:

I dont see it as an "incoming fk up" because with the mortgage crisis it was the individual who was hunted in to the ground for the shortfall. With this if there is a deficit in owed at end of term v actual value its the finance companys problem.

Amazing, which school of economics teaches these gems?

THATS the difference with any PCP / PCH "scandal". Previously it impacted individuals as they were hunted down for any shortfall if they were in negative equity. People were put out of their homes.

That WILL NOT happen with PCP / PCH because you simply hand the car back at the end of term, thus its the finance companys problem.

Also in the grand scheme of things, car loan lending is miniscule.

Ask a grown up to help you if you're not getting that.

Edited by daemon on Friday 23 June 23:02

[daemon]

nickfrog said:

VGTICE said:

Some are too simple to realise that the problem here is not with those who are prudent and have basic understanding of maths and finance which enables them to select the best option. The problem is the majority who think that low monthlies equal good deal ignoring other important aspects like the price, length of term, interest rate, first rental/deposit.

Some people are smarter than others. That is precisely why car lease/finance is so intensely yield managed and that some deals are terrible and others are terrific. Do you think Easyjet should sell every seat on a plane at the same price ?

Saying that all finance deals are poor is as absurd as saying they're all good. It's not a binary question.

Neither you or I have the data to distinguish if the majority of people are prudent or thick - because it doesn't exist as it's not a binary question either.

+1

Some people simply cant grasp that though.

[VGTICE]

daemon said:

VGTICE said:

daemon said:

???

Heres what you wrote -

VGTICE said:

I remember before 2007/08 people like you were saying that subprime was minority

You need to let your modem buffer the page completely before you respond to posts. Here's what I wrote

VGTICE said:

I remember before 2007/08 people like you were saying that subprime was minority and there's no chance in the world anything bad could happen.

That small point at the end denotes the end of sentence which as a whole forms a logical structure. Basic stuff, primary school styleee.

And in what way does the latter part of that sentence change the former????????????

It implies the size of the risk that subprime segment of the market carried back in the day, not the absolute size of subprime market (the bit you cherry picked did that but that wasn't my sentence, it was your vision of my sentence).

[CoolHands]

But even the thickest of people wouldn't buy that used BMW at that price if a new one is cheaper. So what happens to it?

[daemon]

VGTICE said:

It implies the size of the risk that subprime segment of the market carried back in the day, not the absolute size of subprime market (the bit you cherry picked did that but that wasn't my sentence, it was your vision of my sentence).

Ah right, so you believe you implied it, but didnt actually state it in the sentence?

Where in this sentence do you mention RISK?

"I remember before 2007/08 people like you were saying that subprime was minority and there's no chance in the world anything bad could happen."

I then made a statement based on what you actually said, not what you though you said, then you go off on one.

Brilliant.

Edited by daemon on Friday 23 June 23:08

[daemon]

CoolHands said:

But even the thickest of people wouldn't buy that used BMW at that price if a new one is cheaper. So what happens to it?

It'll be sold for a lot less than the asking price, and most likely not sold on a PCP deal, or even a BMW Finance deal for that matter.

Maybe part cash / part trade in / part cheap third party loan.

You'd have to be insane to take that PCP offer. I'd say its probably a BMW AUC website generated quote, moreso than the dealer "offer"

Edited by daemon on Friday 23 June 23:10

[Yipper]

daemon said:

Yipper said:

Most PCH (lease) deals are a rip. I looked at some Alfa 4C deals earlier this week. Of the ~400 on offer, only 2 were good value. In other words, 99% were a bit cr*p. Not a mainstream model, of course, but you see broadly similar ratios when looking at massmarket models from BMW etc.

PCH deals work best where the leasing company can get massive discounts by buying off the manufacturer in a large volume and the car has reasonable or better than average depreciation.

Deals on stuff like Golf Rs, etc tend to work very well.

I would never have thought that lease deals on Alfas were ever going to be great (based on the above)

Edited by daemon on Friday 23 June 22:07

Yes, volume and scale are commonly cited as reasons for cheap lease deals. But it is a bit of a myth. For example, there are roughly ~1200 Golf R PCH deals today and pretty much ~99% of them are cr*p.

What it usually comes down to is how desperate the carmaker is for growth in the quarter and how much the head UK sales / finance guy is willing to fiddle the depreciation slider on his little Excel spreadsheet. When a carmaker gets desperate, or a new broom is in charge and wants to show off and climb the greasy promotion pole, that is when you start to see the proper good lease deals.

[daemon]

Yipper said:

daemon said:

Yipper said:

Most PCH (lease) deals are a rip. I looked at some Alfa 4C deals earlier this week. Of the ~400 on offer, only 2 were good value. In other words, 99% were a bit cr*p. Not a mainstream model, of course, but you see broadly similar ratios when looking at massmarket models from BMW etc.

PCH deals work best where the leasing company can get massive discounts by buying off the manufacturer in a large volume and the car has reasonable or better than average depreciation.

Deals on stuff like Golf Rs, etc tend to work very well.

I would never have thought that lease deals on Alfas were ever going to be great (based on the above)

Edited by daemon on Friday 23 June 22:07

Yes, volume and scale are commonly cited as reasons for cheap lease deals. But it is a bit of a myth. For example, there are roughly ~1200 Golf R PCH deals today and pretty much ~99% of them are cr*p.

What it usually comes down to is how desperate the carmaker is for growth in the quarter and how much the head UK sales / finance guy is willing to fiddle the depreciation slider on his little Excel spreadsheet. When a carmaker gets desperate, or a new broom is in charge and wants to show off and climb the greasy promotion pole, that is when you start to see the proper good lease deals.

Yes, exactly. You can only get the massive discount if it suits the manufacturer to do so, and as you say, there are various reasons why that may occur.

[Granfondo]

CoolHands said:

But even the thickest of people wouldn't buy that used BMW at that price if a new one is cheaper. So what happens to it?

It's there for the salesman to show you how "cheap" the new one seems in the smoke and mirrors world of PCP!

[VGTICE]

This must be a wind up.

daemon said:

Where in this sentence do you mention RISK?

VGTICE said:

I remember before 2007/08 people like you were saying that subprime was minority and there's no chance in the world anything bad could happen.

https://en.oxforddictionaries.com/thesaurus/risk said:

Synonyms of risk in English:

risk

See definition of risk
noun

1‘to publish the story was indeed a risk’
SYNONYMS

chance, uncertainty, unpredictability, precariousness, instability, insecurity, perilousness, riskiness, gamble, venture
ANTONYMS

safety

[VGTICE]

Granfondo said:

CoolHands said:

But even the thickest of people wouldn't buy that used BMW at that price if a new one is cheaper. So what happens to it?

It's there for the salesman to show you how "cheap" the new one seems in the smoke and mirrors world of PCP!

Exactly! What happens to it? It's dressed nicely in low monthlies (which can only be achieved through massaging numbers on a shyster level) is what happens to it. Otherwise this scheme wouldn't and couldn't work. Tis that freaking simple.

[nickfrog]

Yipper said:

What it usually comes down to is how desperate the carmaker is for growth in the quarter and how much the head UK sales / finance guy is willing to fiddle the depreciation slider on his little Excel spreadsheet. When a carmaker gets desperate, or a new broom is in charge and wants to show off and climb the greasy promotion pole, that is when you start to see the proper good lease deals.

Do you really think it works like that ?

[Sa Calobra]

I'm going to close my interest in this thread by saying when the recession comes everyone should ensure that they have enough savings to cover all outgoings to companies for >2yrs if we loose our jobs.

Beit cash purchase, PCP, lease etc on top of all our monthly outgoings.

[berlintaxi]

Sa Calobra said:

I'm going to close my interest in this thread by saying when the recession comes everyone should ensure that they have enough savings to cover all outgoings to companies for >2yrs if we loose our jobs.

Beit cash purchase, PCP, lease etc on top of all our monthly outgoings.

What recession, I thought the Brexiteers were leading us to the land of milk and honey.

[liner33]

VGTICE said:

liner33 said:

You would say majority , I would say minority.

I remember before 2007/08 people like you were saying that subprime was minority and there's no chance in the world anything bad could happen. The fact that people are only interested in monthlies and don't care about purchase price, interest rates, term length can of course could be totally by accident. Or perhaps they are duped into it by shyster tactics, like the ones presented in this little training video.

People like me do understand the difference between minority and majority though and dont feel the need to keep changing the argument every time you start losing.

WTF has sub prime mortgages got to do with anything ? Yes there is lot of dodgy lending going on but just because a few people don't understand primary school level maths does not make pcp lending bad.