Are the wheels about to fall of car finance?
Discussion
HumanDoing said:
I'm making a macroeconomic point, not a 'sweeping statement'.
Let me quote your post for convenience:HumanDoing said:
People used to living on the monthlies and justifying it on the grounds of how cheap it is will be shafted.
As cheap credit dries up, people will realise how they are being juiced and want to avoid finance, but due to their lack of liquidity they won't be able to avoid it and will be forever ingrained as wage slaves with no hope of ever paying off even the most rudimentary of debts - except of course on here where everyone has their mortgage paid off at 32 and tens of thousands of pounds sloshing around their account from month to month.
As cheap credit dries up, people will realise how they are being juiced and want to avoid finance, but due to their lack of liquidity they won't be able to avoid it and will be forever ingrained as wage slaves with no hope of ever paying off even the most rudimentary of debts - except of course on here where everyone has their mortgage paid off at 32 and tens of thousands of pounds sloshing around their account from month to month.
HumanDoing said:
soiled diapers
I see you're recycling that classic. Do you realise how weird it is when someone continually refers to soiled nappies ?fido said:
it's not too late - buy that car and drive it around for another 3 years - or are you going to PCP another car?
I'm heading in a different direction and hoping to emigrate next year so I will most definitely be handing it back once I hit the 'break even' date which is currently January '18. If the emigration was off the cards I would still do the same.As for IQ, think that's a little too far, you can understand the differences and understand what you're doing dumb or smart. Age is different, im sure there is plenty of dumb tosh you've done in your past that 3 years down the line you cringed at, turns out car finance is a big one for people these days!
HumanDoing said:
nickfrog said:
Haven't we gone through this several times already ? Sweeping statements only highlight a lack of rational thought process or an inherent level of frustration, or both.
Credit wasn't invented last Tuesday. Some have always struggled to use it properly, some haven't. Nothing new here.
I'm making a macroeconomic point, not a 'sweeping statement'. It's well known that economists are concerned about levels of debt in this country, are they 'making sweeping statements as well? The chickens are preparing to roost and we are about to be engulfed by an avalanche of soiled diapers when people realise they can't live the life 'they can afford without access to cheap credit and ever increasing debt limits. Credit wasn't invented last Tuesday. Some have always struggled to use it properly, some haven't. Nothing new here.
Then the market contracted naturally and we're back to the newspapers fretting about new car sales being down and the effect that will have on the industry.
People will have a monthly budget and if they cant "afford" a new A4 TDI, they'll get an A3 TDI instead, or a pre-reg one, or a used one. Or whatever.
No diapers will be soiled. No teeth will be nashed.
Sa Calobra said:
Review their position every 2-3 months on new or used cars?
New would be bonkers.
Both, once they've had their current one for 6-9 months. Itchy feet kick in and they start coming around seeing what they can turn their £XXXpm budget into just by trading in their current car and maybe bunging in £500 or so. New would be bonkers.
nickfrog said:
HumanDoing said:
soiled diapers
I see you're recycling that classic. Do you realise how weird it is when someone continually refers to soiled nappies ?I really don't get the fascination, maybe it's from hanging around with 2 year olds for several years? It is plain weird.
4941cc said:
daemon said:
Then they're wholly misusing the product and people like you, being responsible salesmen will advice and direct people towards the right product / term when they do change their car.
They are indeed, but you can't tell them. The want is stronger than the reality of the situation. Motivated as we are by being paid for doing deals now and not for giving prudent financial advice, it's only going to continue...I do believe it will be classed as mis-sold as it is not responsible lending.
This is a perfect example that my Mum and Dad were offered on a nearly new car.
£37000*
£4000 deposit
Final payment £12000
48 x £691 @ 12.9%
I got them a quote from Lombard which was....
£37000
£4000 deposit
Final payment £1
48 x £721 @ 2.9%
When they took it into the dealer the dealer kept saying "But we are £30 a month cheaper and guarantee your car will be worth £1200."
I had to go in with them to explain to the dealer that they are not guaranteeing the car is worth £12k at the end at all, all they are guaranteeing is if they want to keep the car they had to find another £12000, where as for £30 a month more at the end, with Lombard, they need to pay a pound.
The guy genuinely looked shocked, he sat back in his chair with that "Mind Blown!" look on his face!
Now that is the problem with it, even the guys selling it don't seem to truly understand what it is they are getting people into. It is a very, very clever system, but it is designed as a debt trap to get repeat custom all wrapped up in a false great deal.
- Can't remember the exact figures but it was very close to that.
gizlaroc said:
And this is why I think PCP type finance will become the next "PPI" claim.
I do believe it will be classed as mis-sold as it is not responsible lending.
This is a perfect example that my Mum and Dad were offered on a nearly new car.
£37000*
£4000 deposit
Final payment £12000
48 x £691 @ 12.9%
I got them a quote from Lombard which was....
£37000
£4000 deposit
Final payment £1
48 x £721 @ 2.9%
When they took it into the dealer the dealer kept saying "But we are £30 a month cheaper and guarantee your car will be worth £1200."
I had to go in with them to explain to the dealer that they are not guaranteeing the car is worth £12k at the end at all, all they are guaranteeing is if they want to keep the car they had to find another £12000, where as for £30 a month more at the end, with Lombard, they need to pay a pound.
The guy genuinely looked shocked, he sat back in his chair with that "Mind Blown!" look on his face!
Now that is the problem with it, even the guys selling it don't seem to truly understand what it is they are getting people into. It is a very, very clever system, but it is designed as a debt trap to get repeat custom all wrapped up in a false great deal.
It's an interesting example but all you've done is compare a PCP deal with a HP deal, with a hugely differing APR between the two. I do believe it will be classed as mis-sold as it is not responsible lending.
This is a perfect example that my Mum and Dad were offered on a nearly new car.
£37000*
£4000 deposit
Final payment £12000
48 x £691 @ 12.9%
I got them a quote from Lombard which was....
£37000
£4000 deposit
Final payment £1
48 x £721 @ 2.9%
When they took it into the dealer the dealer kept saying "But we are £30 a month cheaper and guarantee your car will be worth £1200."
I had to go in with them to explain to the dealer that they are not guaranteeing the car is worth £12k at the end at all, all they are guaranteeing is if they want to keep the car they had to find another £12000, where as for £30 a month more at the end, with Lombard, they need to pay a pound.
The guy genuinely looked shocked, he sat back in his chair with that "Mind Blown!" look on his face!
Now that is the problem with it, even the guys selling it don't seem to truly understand what it is they are getting people into. It is a very, very clever system, but it is designed as a debt trap to get repeat custom all wrapped up in a false great deal.
- Can't remember the exact figures but it was very close to that.
Any prudent and mildly intelligent car buyer would likewise look at the differing finance options, compare APR's, total cost, etc.
I don't think that mis-selling a al "PPI" is an appropraite comparison, as the dealers are only offering a poor bargain (compared to what else might be avaialble on the market) rather than mis-selling a product that the purchaser cannot use at all, as was the case with PPI.
Mandat said:
gizlaroc said:
And this is why I think PCP type finance will become the next "PPI" claim.
I do believe it will be classed as mis-sold as it is not responsible lending.
This is a perfect example that my Mum and Dad were offered on a nearly new car.
£37000*
£4000 deposit
Final payment £12000
48 x £691 @ 12.9%
I got them a quote from Lombard which was....
£37000
£4000 deposit
Final payment £1
48 x £721 @ 2.9%
When they took it into the dealer the dealer kept saying "But we are £30 a month cheaper and guarantee your car will be worth £1200."
I had to go in with them to explain to the dealer that they are not guaranteeing the car is worth £12k at the end at all, all they are guaranteeing is if they want to keep the car they had to find another £12000, where as for £30 a month more at the end, with Lombard, they need to pay a pound.
The guy genuinely looked shocked, he sat back in his chair with that "Mind Blown!" look on his face!
Now that is the problem with it, even the guys selling it don't seem to truly understand what it is they are getting people into. It is a very, very clever system, but it is designed as a debt trap to get repeat custom all wrapped up in a false great deal.
It's an interesting example but all you've done is compare a PCP deal with a HP deal, with a hugely differing APR between the two. I do believe it will be classed as mis-sold as it is not responsible lending.
This is a perfect example that my Mum and Dad were offered on a nearly new car.
£37000*
£4000 deposit
Final payment £12000
48 x £691 @ 12.9%
I got them a quote from Lombard which was....
£37000
£4000 deposit
Final payment £1
48 x £721 @ 2.9%
When they took it into the dealer the dealer kept saying "But we are £30 a month cheaper and guarantee your car will be worth £1200."
I had to go in with them to explain to the dealer that they are not guaranteeing the car is worth £12k at the end at all, all they are guaranteeing is if they want to keep the car they had to find another £12000, where as for £30 a month more at the end, with Lombard, they need to pay a pound.
The guy genuinely looked shocked, he sat back in his chair with that "Mind Blown!" look on his face!
Now that is the problem with it, even the guys selling it don't seem to truly understand what it is they are getting people into. It is a very, very clever system, but it is designed as a debt trap to get repeat custom all wrapped up in a false great deal.
- Can't remember the exact figures but it was very close to that.
Any prudent and mildly intelligent car buyer would likewise look at the differing finance options, compare APR's, total cost, etc.
I don't think that mis-selling a al "PPI" is an appropraite comparison, as the dealers are only offering a poor bargain (compared to what else might be avaialble on the market) rather than mis-selling a product that the purchaser cannot use at all, as was the case with PPI.
What this thread is doing for me in the last few days is opening my eyes to a world that I have no experience or knowledge of.* It staggers me to see the earlier quote about people getting itchy & wanting to change after 6-9 months.
I’m not going to criticise, condemn or complain (good old Dale Carnegie) on anyone’s habits, how you pay for your car is your business, not mine.
But... that said, I have a question for the trade people in the thread ( I know it’s not the car salesman thread but still) basically:
What proportion of people are doing this? Is it 5%, 20%?
My feeling is that it’s got to be a very small percentage, it’s only that these cases are such outliers to normal that they stand out?
Following on from that, surely these people, whatever payment method they’re using, are taking a huge hit on trade-in values? How much / how long is this sort of thing sustainable for at the “bung in £500 to change” level? It doesn’t seem to make sense to me. I’m not sure whether I’m missing something, or whether the general public desire for new shiny things is vastly greater than in my little microcosm.
I’m not going to criticise, condemn or complain (good old Dale Carnegie) on anyone’s habits, how you pay for your car is your business, not mine.
But... that said, I have a question for the trade people in the thread ( I know it’s not the car salesman thread but still) basically:
What proportion of people are doing this? Is it 5%, 20%?
My feeling is that it’s got to be a very small percentage, it’s only that these cases are such outliers to normal that they stand out?
Following on from that, surely these people, whatever payment method they’re using, are taking a huge hit on trade-in values? How much / how long is this sort of thing sustainable for at the “bung in £500 to change” level? It doesn’t seem to make sense to me. I’m not sure whether I’m missing something, or whether the general public desire for new shiny things is vastly greater than in my little microcosm.
- FWIW, all my friends/neighbours/colleagues are either company car/allowance, or full on-bangernomic advocates (well except for Tommy across the road who bought a picasso new back in 2004 & still has it
)
Ahbefive said:
It really is an odd thing to keep repeating. I can only imagine how odd is sounds during actual conversation if he says it then too.
I really don't get the fascination, maybe it's from hanging around with 2 year olds for several years? It is plain weird.
I've never 'hung around with 2 year olds for several years', nor suggested in any way that I have. Please keep posts on topic rather than posting nonsense pulled from heaven knows where. I really don't get the fascination, maybe it's from hanging around with 2 year olds for several years? It is plain weird.
Prinny said:
What this thread is doing for me in the last few days is opening my eyes to a world that I have no experience or knowledge of.* It staggers me to see the earlier quote about people getting itchy & wanting to change after 6-9 months.
I’m not going to criticise, condemn or complain (good old Dale Carnegie) on anyone’s habits, how you pay for your car is your business, not mine.
But... that said, I have a question for the trade people in the thread ( I know it’s not the car salesman thread but still) basically:
What proportion of people are doing this? Is it 5%, 20%?
My feeling is that it’s got to be a very small percentage, it’s only that these cases are such outliers to normal that they stand out?
Following on from that, surely these people, whatever payment method they’re using, are taking a huge hit on trade-in values? How much / how long is this sort of thing sustainable for at the “bung in £500 to change” level? It doesn’t seem to make sense to me. I’m not sure whether I’m missing something, or whether the general public desire for new shiny things is vastly greater than in my little microcosm.
Its a very small percentage. The vast bulk of people use PCP deals as they were intended.I’m not going to criticise, condemn or complain (good old Dale Carnegie) on anyone’s habits, how you pay for your car is your business, not mine.
But... that said, I have a question for the trade people in the thread ( I know it’s not the car salesman thread but still) basically:
What proportion of people are doing this? Is it 5%, 20%?
My feeling is that it’s got to be a very small percentage, it’s only that these cases are such outliers to normal that they stand out?
Following on from that, surely these people, whatever payment method they’re using, are taking a huge hit on trade-in values? How much / how long is this sort of thing sustainable for at the “bung in £500 to change” level? It doesn’t seem to make sense to me. I’m not sure whether I’m missing something, or whether the general public desire for new shiny things is vastly greater than in my little microcosm.
- FWIW, all my friends/neighbours/colleagues are either company car/allowance, or full on-bangernomic advocates (well except for Tommy across the road who bought a picasso new back in 2004 & still has it )
I like to change my cars very regularly, therefore PCP or PCH wouldnt work for me (I've used PCP deals in the past though).
daemon said:
I like to change my cars very regularly, therefore PCP or PCH wouldnt work for me (I've used PCP deals in the past though).
Why wouldn't PCP "work"? You can change your cars as often as you like (assuming you can stomach the depreciation, interest rates and dealer markups which are the same conceptually regardless of purchase method...)silentbrown said:
daemon said:
I like to change my cars very regularly, therefore PCP or PCH wouldnt work for me (I've used PCP deals in the past though).
Why wouldn't PCP "work"? You can change your cars as often as you like (assuming you can stomach the depreciation, interest rates and dealer markups which are the same conceptually regardless of purchase method...)Buy at a year old and PCP it and you're probably looking at 10.9% APR or similar, so a painful amount of interest. Cash or a cheap loan probably best for that sort of thing.
daemon said:
Granfondo said:
Deamon is correct people in the main do use PCPs as they were intended that is to keep them locked into perpetual car prison and it is working perfectly! 
Thats a fairly feeble attempt at baiting me even by your low standards Of course maybe that was another of your "throw away comments" a la 20% retention for deposit but seriously you come back with that pearl!
You don't have to agree but your still wrong!
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