Are the wheels about to fall of car finance?
Discussion
NickCQ said:
djc206 said:
Ares said:
Unless early settlement has punitive penalties! Settlement figures in year one often have full term interest within.
You're entitled to withdraw from any financial product within the first 14 days without penalty are you not?berlintaxi said:
If you withdraw in the first 14 days the finance agreement is cancelled and you pay for the car as if you just paid cash in the first place, there is always the possibility of the garage asking for the inducement to finance the car back, but have never heard of it happening.
My contract with Ford very clearly stipulates that any deposit contribution must be repaid in full. I don't remember seeing that in my former agreements with Audi/VWFS.A friend bought a Golf R and wanted to pay cash, they encouraged him to take finance and then pay off in full after a few weeks that way they kept their bonus for it too.
The Bank of England is not expecting a world-wide financial armageddon, but it is concerned that in the UK consumer debt is rising at 10% per year whilst consumer incomes are rising at 2% per year. It has singled out credit cards and PCPs as the main areas of concern as theses have been rising most steeply. They have therefore issued guidelines to lenders as they did to mortgae providers last year, althoiugh in this case the stress test is about the total amount of credit held by an individual rather than the effect of a rise in interest rates.
The implications of this are that if residual values drop, borrowers who have over-extended themselves will have no equity to put towards the (probably) higher deposit on their next PCP and will be unable to borrow it on their credit cards so will be unable to have another car. However they are apparently only 3% of the market, so noone will be unduly worried. If there is a flood of used cars, then the manufacturers will no doubt store even more of them on disused airfields at book price and financed by the banks at advantageous rates while they drip feed them through the on-site auctions. I wouldn't be surprised if Bruntingthorpe aren't already preparing a couple more runways.
The implications of this are that if residual values drop, borrowers who have over-extended themselves will have no equity to put towards the (probably) higher deposit on their next PCP and will be unable to borrow it on their credit cards so will be unable to have another car. However they are apparently only 3% of the market, so noone will be unduly worried. If there is a flood of used cars, then the manufacturers will no doubt store even more of them on disused airfields at book price and financed by the banks at advantageous rates while they drip feed them through the on-site auctions. I wouldn't be surprised if Bruntingthorpe aren't already preparing a couple more runways.
Edited by Justin Case on Tuesday 8th August 12:00
Ares said:
I'm better off even without the return on capital. (But my investments are in a managed fund, primarily tracking the UK market, and are on very low risk profile). The points you make are relevant if factoring the opportunity cost as part of the saving.
The Alfa was available with £3250 off, given the spec I have. Half of which will be eaten up with the RFL. There is no way in hell a 4 year old, 60,000 mile Alfa will be worth £33k.
My 3yr 3mth old 640d (£74k list price, available at the time with £14500 discount) is currently worth £25-27k, even with the £5k Schnitzer performance kit and only 40,000 miles on the clock.
I reckon the Alfa will be close to, maybe under £20k at 4yrs/60,000miles. It will have lost over £40,000, c£840 per month. I'm paying c2/3rds of that?
Loving the man-maths.The Alfa was available with £3250 off, given the spec I have. Half of which will be eaten up with the RFL. There is no way in hell a 4 year old, 60,000 mile Alfa will be worth £33k.
My 3yr 3mth old 640d (£74k list price, available at the time with £14500 discount) is currently worth £25-27k, even with the £5k Schnitzer performance kit and only 40,000 miles on the clock.
I reckon the Alfa will be close to, maybe under £20k at 4yrs/60,000miles. It will have lost over £40,000, c£840 per month. I'm paying c2/3rds of that?
So comparing (a) pouring a large chunk of money away with (b) pouring an even larger chunk of money away, suddenly makes (a) seem like the sensible option.
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
Justin Case said:
The Bank of England is not expecting a world-wide financial armageddon, but it is concerned that in the UK consumer debt is rising at 10% per year whilst consumer incomes are rising at 2% per year. It has singled out credit cards and PCPs as the main areas of concern as theses have been rising most steeply. They have therefore issued guidelines to lenders as they did to mortgae providers last year, althoiugh in this case the stress test is about the total amount of credit held by an individual rather than the effect of a rise in interest rates.
The implications of this are that if residual values drop, borrowers who have over-extended themselves will have no equity to put towards the (probably) higher deposit on their next PCP and will be unable to borrow it on their credit cards so will be unable to have another car. However they are apparently only 3% of the market, so noone will be unduly worried. If there is a flood of used cars, then the manufacturers will no doubt store even more of them on disused airfields at book price and financed by the banks at advantageous rates while they drip feed them through the on-site auctions. I wouldn't be surprised if Bruntinthorpe aren't already preparing a couple more runways.
Agree with this.The implications of this are that if residual values drop, borrowers who have over-extended themselves will have no equity to put towards the (probably) higher deposit on their next PCP and will be unable to borrow it on their credit cards so will be unable to have another car. However they are apparently only 3% of the market, so noone will be unduly worried. If there is a flood of used cars, then the manufacturers will no doubt store even more of them on disused airfields at book price and financed by the banks at advantageous rates while they drip feed them through the on-site auctions. I wouldn't be surprised if Bruntinthorpe aren't already preparing a couple more runways.
Car finance in the UK is not a systemic issue albeit there is some interest as to where the loans have been packaged and collaterised.
The far greater likelihood is that there will be an intevention from the FCA as regards the way the products are sold, tighter controls mandated (currently non qualified individuals are incentivised on selling consumer debt products) and possibly fines/redress.
PTF said:
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
But then it is all relative to what your disposable income is.PTF said:
Loving the man-maths.
So comparing (a) pouring a large chunk of money away with (b) pouring an even larger chunk of money away, suddenly makes (a) seem like the sensible option.
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
Full circle as ever on these groundhog finance threads.So comparing (a) pouring a large chunk of money away with (b) pouring an even larger chunk of money away, suddenly makes (a) seem like the sensible option.
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
There's always a different/cheaper/better way to do things and If everybody thought the way you do there would be no new car market other than GT series Porsches and a few Ferraris.
Everybody's circumstances, financial position, needs, wants and desires are different.
I've little doubt Ares could buy the car outright if he wished to. His solution as outlined, for his circumstances is however a more cost effective one. Not aimed at you specifically but some people simply seem unable to grasp this thinking. Guess what ? He knows he's renting it, and that's all part of the plan.
RSK21 said:
Justin Case said:
The Bank of England is not expecting a world-wide financial armageddon, but it is concerned that in the UK consumer debt is rising at 10% per year whilst consumer incomes are rising at 2% per year. It has singled out credit cards and PCPs as the main areas of concern as theses have been rising most steeply. They have therefore issued guidelines to lenders as they did to mortgae providers last year, althoiugh in this case the stress test is about the total amount of credit held by an individual rather than the effect of a rise in interest rates.
The implications of this are that if residual values drop, borrowers who have over-extended themselves will have no equity to put towards the (probably) higher deposit on their next PCP and will be unable to borrow it on their credit cards so will be unable to have another car. However they are apparently only 3% of the market, so noone will be unduly worried. If there is a flood of used cars, then the manufacturers will no doubt store even more of them on disused airfields at book price and financed by the banks at advantageous rates while they drip feed them through the on-site auctions. I wouldn't be surprised if Bruntinthorpe aren't already preparing a couple more runways.
Agree with this.The implications of this are that if residual values drop, borrowers who have over-extended themselves will have no equity to put towards the (probably) higher deposit on their next PCP and will be unable to borrow it on their credit cards so will be unable to have another car. However they are apparently only 3% of the market, so noone will be unduly worried. If there is a flood of used cars, then the manufacturers will no doubt store even more of them on disused airfields at book price and financed by the banks at advantageous rates while they drip feed them through the on-site auctions. I wouldn't be surprised if Bruntinthorpe aren't already preparing a couple more runways.
Car finance in the UK is not a systemic issue albeit there is some interest as to where the loans have been packaged and collaterised.
The far greater likelihood is that there will be an intevention from the FCA as regards the way the products are sold, tighter controls mandated (currently non qualified individuals are incentivised on selling consumer debt products) and possibly fines/redress.
In a nutshell.
djc206 said:
Ares said:
Unless early settlement has punitive penalties! Settlement figures in year one often have full term interest within.
You're entitled to withdraw from any financial product within the first 14 days without penalty are you not?If you "cancel" the contract, then the full amount would be payable to the supplying dealer, not the full amount minus the incentive.
Edited by daemon on Tuesday 8th August 12:41
berlintaxi said:
If you withdraw in the first 14 days the finance agreement is cancelled and you pay for the car as if you just paid cash in the first place, there is always the possibility of the garage asking for the inducement to finance the car back, but have never heard of it happening.
I think thats wrong? You need to settle the finance with the finance company, not cancel the finance. The garage / supplying dealer never see the financial inducement / incentive in the first place. They merely get paid the full transaction amount by the finance house. You then pay full transaction amount minus incentive to the finance house.PTF said:
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
His maths isn't too bad though. 60,000 miles at £30,000 is 50p per mile.TA14 said:
PTF said:
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
His maths isn't too bad though. 60,000 miles at £30,000 is 50p per mile.PTF said:
TA14 said:
PTF said:
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
His maths isn't too bad though. 60,000 miles at £30,000 is 50p per mile.daemon said:
PTF said:
TA14 said:
PTF said:
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
His maths isn't too bad though. 60,000 miles at £30,000 is 50p per mile.daemon said:
berlintaxi said:
If you withdraw in the first 14 days the finance agreement is cancelled and you pay for the car as if you just paid cash in the first place, there is always the possibility of the garage asking for the inducement to finance the car back, but have never heard of it happening.
I think thats wrong? You need to settle the finance with the finance company, not cancel the finance. The garage / supplying dealer never see the financial inducement / incentive in the first place. They merely get paid the full transaction amount by the finance house. You then pay full transaction amount minus incentive to the finance house.Certainly with Mercedes they offered an inducement to take finance then just wanted the price of the car minus the inducement to withdraw from the agreement, no mention of having to repay the inducement to anybody.
berlintaxi said:
PTF said:
Either way it's blowing somewhere approaching £1 per mile on a nice car. To argue that one is slightly better than the other is quite funny to observe as someone who really finds it hard to stomach even a £2k depreciation loss per year on a car.
But then it is all relative to what your disposable income is.Ares said:
Unless early settlement has punitive penalties! Settlement figures in year one often have full term interest within.
I think that's a complete myth. I'm pretty sure they aren't legally allowed to do that. As for "having to hand the car back" during cooling off period. No, you just have to repay the amount that you've borrowed.
I've heard rumours about clauses requiring repayment of deposit contribution if cancelling during cooling off, but have never actually seend such a thing. I suspect salespeople don't get commission from finance company if you settle within 6 months, though.
Back from a hard morning "manual labouring" and first job is to apologise to Ashleyman in bringing him into the ongoing internet feud with RSK(the
)21 and his side kick Deamon his sphincter rimmer.
How sphincter boy chuckled about "captain of industry" quip but when anybody mentions his attempts,yes plural,he runs off to the mods to get people banned!
I have also been accused of derailing this thread but if you look back it was RSK(the)21 who starts the name calling and insults first and then sphincter boy has his we dig!
P.S. Who the fk is Gordy Bannatyne RSK?
Is he the guy who sold you the Alfa pup or the BMW salesman who pulled your pants down when you couldn't reject the pup after fking about with the ecu?
And in the immortal words of DUNCAN Bannatynes I'AM OOT
Unless of course I need to defend myself.
The censored word begins with C and rhymes with hunt but I don't think anybody would mistake him for anything else.
)21 and his side kick Deamon his sphincter rimmer. How sphincter boy chuckled about "captain of industry" quip but when anybody mentions his attempts,yes plural,he runs off to the mods to get people banned!
I have also been accused of derailing this thread but if you look back it was RSK(the
)21 who starts the name calling and insults first and then sphincter boy has his we dig!P.S. Who the f
k is Gordy Bannatyne RSK?Is he the guy who sold you the Alfa pup or the BMW salesman who pulled your pants down when you couldn't reject the pup after f
king about with the ecu?And in the immortal words of DUNCAN Bannatynes I'AM OOT
Unless of course I need to defend myself.
The censored word begins with C and rhymes with hunt but I don't think anybody would mistake him for anything else.
Edited by Granfondo on Tuesday 8th August 13:34
Granfondo said:
And in the immortal words of DUNCAN Banantyne I'AM OOT
Since I now know that you're a stickler for detail it's Bannatyne: https://www.bannatyne.co.uk/about-duncan-bannatyneGranfondo said:
Back from a hard morning "manual labouring" and first job is to apologise to Ashleyman in bringing him into the ongoing internet feud with RSK(the)21 and his side kick Deamon his sphincter rimmer.
How sphincter boy chuckled about "captain of industry" quip but when anybody mentions his attempts,yes plural,he runs off to the mods to get people banned!
I have also been accused of derailing this thread but if you look back it was RSK(the)21 who starts the name calling and insults first and then sphincter boy has his we dig!
P.S. Who the fk is Gordy Banantyne RSK?
Is he the guy who sold you the Alfa pup or the BMW salesman who pulled your pants down when you couldn't reject the pup after fking about with the ecu?
And in the immortal words of DUNCAN Banantyne I'AM OOT
Unless of course I need to defend myself.
The censored word begins with C and rhymes with hunt but I don't think anybody would mistake him for anything else.
Oh dear.)21 and his side kick Deamon his sphincter rimmer. How sphincter boy chuckled about "captain of industry" quip but when anybody mentions his attempts,yes plural,he runs off to the mods to get people banned!
I have also been accused of derailing this thread but if you look back it was RSK(the
)21 who starts the name calling and insults first and then sphincter boy has his we dig!P.S. Who the f
k is Gordy Banantyne RSK?Is he the guy who sold you the Alfa pup or the BMW salesman who pulled your pants down when you couldn't reject the pup after f
king about with the ecu?And in the immortal words of DUNCAN Banantyne I'AM OOT
Unless of course I need to defend myself.
The censored word begins with C and rhymes with hunt but I don't think anybody would mistake him for anything else.
You have had a tough morning haven't you ?
Surprised you got anything done what with reading through my post history to compose that little playground tantrum.
Toodle pip.
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