Are the wheels about to fall of car finance?
Discussion
RSK21 said:
Ares said:
No signs here.
Friend just picked up a brand new, £86k FF Range Rover for £66k. He's pushed it through a PCP and is paying £525/mth (+VAT).
Off topic but that’s a good priceFriend just picked up a brand new, £86k FF Range Rover for £66k. He's pushed it through a PCP and is paying £525/mth (+VAT).
Assume it’s a 17 model on at that level of discount. Any chance you could share the dealer ?
Car was the exact spec he wanted (Black/Ivory exterior) but had the black leather.
Ares said:
RSK21 said:
Ares said:
No signs here.
Friend just picked up a brand new, £86k FF Range Rover for £66k. He's pushed it through a PCP and is paying £525/mth (+VAT).
Off topic but that’s a good priceFriend just picked up a brand new, £86k FF Range Rover for £66k. He's pushed it through a PCP and is paying £525/mth (+VAT).
Assume it’s a 17 model on at that level of discount. Any chance you could share the dealer ?
Car was the exact spec he wanted (Black/Ivory exterior) but had the black leather.
Simonium said:
Ares said:
No signs here.
Friend just picked up a brand new, £86k FF Range Rover for £66k. He's pushed it through a PCP and is paying £525/mth (+VAT).
If the VAT element is separate it doesn't sound like a PCP to me. PCH perhaps. Friend just picked up a brand new, £86k FF Range Rover for £66k. He's pushed it through a PCP and is paying £525/mth (+VAT).
The monthly in isolation is meaningless anyway - a while ago LandRover was doing 50/50 deals, pay half now and half later (or return the car). I wonder if some owners thought the car was free as they weren't paying a monthly?
Edited by Sheepshanks on Monday 8th January 10:39
gizlaroc said:
nickfrog said:
It could have an impact indeed but remember that the cars coming out of PCP/lease can be yield managed and/or stay in the networks, which helps to control values.
They can, and often do, the problem is, we are at the point where main dealers are having a very hard time trying to sell their used stock (which is meant to be the money maker) because even at 2 years old it is costing more than someone can be in a new car for. It is case of going cheaper and cheaper year on year (in real terms) to buy market share, problem is do you want the market share of something not making any real money?
My intention was to buy it. Problem was the deal and incentives I was offered on a brand new car sitting in the showroom (so immediate delivery) made the used example look silly expensive.
Consequence? I have procured my 1st vehicle using a PCP something I swore I would never do.
Another poster commented on how fresh and tight his five year old 105k miles E Class Estate felt.
Whilst Iagree that cars like this feel very fresh what puts me off the 3-4 year far more prestigious cars I could have for my new Pug money is how complex new cars have become and how prohibitively expensive they are if or rather when (and I speak from experience) , they go wrong.
4 years ago I bought a three year old MINI Cooper S Works Clubman. At the same time my cousin leased a BMW 135i. I thought he was a mug forking out deposit plus £240 a month for 3 years and have nothing to show for it. Turned out, after taking into account interest, depreciation and repairs I ended forking out even more. Who was the mug?
One thing is starting to put me off PCP and lease deals and that is job insecurity. I work in construction and last year was very shaky.
I'd hate to be jobless or change jobs and be given a non negotiable company car rendering mine surplus to requirements while I am stuck in an inflexible finance agreement.
This being the case if things don't pick up my next car may well be something cheap, simple, petrol enginef, Korean, bought for cash and still with a tail-end of manufacturer's warranty. A 1.8 petrol Chevy Cruze saloon would be perfect. If a lot of people are in the same boat and thinking the same way it's no wonder new car sales are falling off a cliff.
If you buy the 'right' car that is older the risks are really limited imho.
There is usually enough info out there about which engines have issues etc.
I have the E Class, they are pretty bullet proof, especially the NA 3.5 V6 petrol engine, no turbos, no EGRs. The W212 has suspension made of granite so will last. Etc. etc. etc.
But I do agree, a PCP on a new car means you know exactly how much you have going out each month, no nasty surprises.
I guess the only worry then is being left without work and a car you can't afford.
So basically, unless you are at the point in life where you don't have to think about money anymore, cars are a worry how ever you do them, and they will cost you how ever you do them, so finance them in the cheapest way possible or the way which will worry you the least.
There is usually enough info out there about which engines have issues etc.
I have the E Class, they are pretty bullet proof, especially the NA 3.5 V6 petrol engine, no turbos, no EGRs. The W212 has suspension made of granite so will last. Etc. etc. etc.
But I do agree, a PCP on a new car means you know exactly how much you have going out each month, no nasty surprises.
I guess the only worry then is being left without work and a car you can't afford.
So basically, unless you are at the point in life where you don't have to think about money anymore, cars are a worry how ever you do them, and they will cost you how ever you do them, so finance them in the cheapest way possible or the way which will worry you the least.
Simonium said:
Ares said:
No signs here.
Friend just picked up a brand new, £86k FF Range Rover for £66k. He's pushed it through a PCP and is paying £525/mth (+VAT).
If the VAT element is separate it doesn't sound like a PCP to me. PCH perhaps. Friend just picked up a brand new, £86k FF Range Rover for £66k. He's pushed it through a PCP and is paying £525/mth (+VAT).
He could have paid cash at £66k, then 'reclaimed' the VAT through his business. He chose to push it through a PCP via his business instead.
For Joe Public, they could have got/get the same deal - i.e., £66k cash or £525+VAT lease (or £630/mth PCP incl VAT)
gizlaroc said:
I have the E Class, they are pretty bullet proof,
I had an Estate. Bought it at seven years old and had it for seven years. Ran it as a daily along with an NC MX5 I had purchased outright as a heavily discounted pre-reg. I kept the Mazda for several years also. Reckon that was the best combination of vehicles I have ever run. Both were bullet proof, enjoyable to drive and between them covered every motoring base.
If you're on a limited income and are on a PCP because it's affordable fixed cost motoring then you will never get off the cycle unless you save up and buy outright. For some, (including myself) that's just not going to happen.
To buy a £10k car for instance if you can only afford to save £100 a month it would take 8 years.
The other option is to get a car loan but then that's also (higher) a monthly payment.
I'm currently on a PCP, I pay £340 a month. If I wanted to think about getting off the cycle but stay in the same type of car then I'd need to be saving £450 a month on top of the £340 so I could afford to spend £20k on a car in 4 years time. For some people thats not affordable so they're stuck with paying monthly.
I'm about to go and view a car this afternoon. Secured a personal loan in principle over 4 years with a low interest rate and will PX my PCP in for the car. I'll be paying £100 a month more than I do now but in 4 years time it will be my car and I won't have to pay a balloon. But of course in 4 years time, I'll probably be sick of the car and want to sell it as soon as it's paid off anyway.
To buy a £10k car for instance if you can only afford to save £100 a month it would take 8 years.
The other option is to get a car loan but then that's also (higher) a monthly payment.
I'm currently on a PCP, I pay £340 a month. If I wanted to think about getting off the cycle but stay in the same type of car then I'd need to be saving £450 a month on top of the £340 so I could afford to spend £20k on a car in 4 years time. For some people thats not affordable so they're stuck with paying monthly.
I'm about to go and view a car this afternoon. Secured a personal loan in principle over 4 years with a low interest rate and will PX my PCP in for the car. I'll be paying £100 a month more than I do now but in 4 years time it will be my car and I won't have to pay a balloon. But of course in 4 years time, I'll probably be sick of the car and want to sell it as soon as it's paid off anyway.
Tannedbaldhead said:
I thought he was a mug forking out deposit plus £240 a month for 3 years and have nothing to show for it. Turned out, after taking into account interest, depreciation and repairs I ended forking out even more. Who was the mug?
Yes, this is a very common misconception, which many people seem to fall for. Mandat said:
Tannedbaldhead said:
I thought he was a mug forking out deposit plus £240 a month for 3 years and have nothing to show for it. Turned out, after taking into account interest, depreciation and repairs I ended forking out even more. Who was the mug?
Yes, this is a very common misconception, which many people seem to fall for. ashleyman said:
If you're on a limited income and are on a PCP because it's affordable fixed cost motoring then you will never get off the cycle unless you save up and buy outright. For some, (including myself) that's just not going to happen.
To buy a £10k car for instance if you can only afford to save £100 a month it would take 8 years.
The other option is to get a car loan but then that's also (higher) a monthly payment.
I'm currently on a PCP, I pay £340 a month. If I wanted to think about getting off the cycle but stay in the same type of car then I'd need to be saving £450 a month on top of the £340 so I could afford to spend £20k on a car in 4 years time. For some people thats not affordable so they're stuck with paying monthly.
I'm about to go and view a car this afternoon. Secured a personal loan in principle over 4 years with a low interest rate and will PX my PCP in for the car. I'll be paying £100 a month more than I do now but in 4 years time it will be my car and I won't have to pay a balloon. But of course in 4 years time, I'll probably be sick of the car and want to sell it as soon as it's paid off anyway.
Agree with most of this other than a person who is only able to save £100 per month shouldn’t be spending £340 pm on a car.To buy a £10k car for instance if you can only afford to save £100 a month it would take 8 years.
The other option is to get a car loan but then that's also (higher) a monthly payment.
I'm currently on a PCP, I pay £340 a month. If I wanted to think about getting off the cycle but stay in the same type of car then I'd need to be saving £450 a month on top of the £340 so I could afford to spend £20k on a car in 4 years time. For some people thats not affordable so they're stuck with paying monthly.
I'm about to go and view a car this afternoon. Secured a personal loan in principle over 4 years with a low interest rate and will PX my PCP in for the car. I'll be paying £100 a month more than I do now but in 4 years time it will be my car and I won't have to pay a balloon. But of course in 4 years time, I'll probably be sick of the car and want to sell it as soon as it's paid off anyway.
irish boy said:
Agree with most of this other than a person who is only able to save £100 per month shouldn’t be spending £340 pm on a car.
Yeah, as much as I am an advocate for using finance, as often cheaper than if you use your cash (ie manufacturer subsidies and buying a more expensive car that is in warranty and at the right part of the depreciation curve) the above comment is bang on. My daughters friends are all in their early to mid twenties and all moan about how they ca't get on the housing ladder, how hard done by they are by the older generation etc. etc.
Yet they all have the last macbook, iphone, netflix, amazon, have big modern TVs and surround systems, eat out all the time and go out drinking every weekend and most of them have cars on finance too, and pretty new cars too.
I'm only 44, but we lived on noodles and drove round in a 15 year old Volvo for 4 years while trying to scrape together a deposit. I got rid of my mobile, ditched Sky, had a used TV and about the only 'toy' was a playstion, and if we went out it was round mates on a Saturday evening as we were all saving like mad.
Sorry, but I have to agree here, if you can't save £10k in a year, then you really shouldn't be spending nearly £5500 on a car imho.
No one needs to spend more than £200 a month on a car, in fact if we are honest with ourselves anything over £150 a month is simply being materialistic.
captain_cynic said:
Uggers said:
http://www.bbc.co.uk/news/business-42571828
Is this the point where the market has reached its peak and we will see a small but steady climb in finance for cars? Despite the fall in sales, in historical terms it has still been a decent year.
What is happening is that people are choosing to keep their current cars for longer or buying used cars as the prospect of buying or leasing a new car is not attractive. This is due to a fall in disposable and discretionary income (disposable = money you have left after taxes, discretionary = money you have left after bills and essentials). When discretionary income falls, expensive luxuries are usually cut first.Is this the point where the market has reached its peak and we will see a small but steady climb in finance for cars? Despite the fall in sales, in historical terms it has still been a decent year.
Those watching the used car market have seen it become less competitive for the same reason. More demand and less supply of used cars.
So we're going to see a contraction of the car finance market as we would expect to see when economies take a downturn. However it won't be the carpocolypse some are expecting (hoping for).
All that's happened is some f*ckwit at the DoT thought it would be a good idea to talk down the diesel market to collapse right before Brexit.
Strip out the diesel fiasco and the UK market is actually growing.
ashleyman said:
If you're on a limited income and are on a PCP because it's affordable fixed cost motoring then you will never get off the cycle unless you save up and buy outright. For some, (including myself) that's just not going to happen.
To buy a £10k car for instance if you can only afford to save £100 a month it would take 8 years.
The other option is to get a car loan but then that's also (higher) a monthly payment.
I'm currently on a PCP, I pay £340 a month. If I wanted to think about getting off the cycle but stay in the same type of car then I'd need to be saving £450 a month on top of the £340 so I could afford to spend £20k on a car in 4 years time. For some people thats not affordable so they're stuck with paying monthly.
I'm about to go and view a car this afternoon. Secured a personal loan in principle over 4 years with a low interest rate and will PX my PCP in for the car. I'll be paying £100 a month more than I do now but in 4 years time it will be my car and I won't have to pay a balloon. But of course in 4 years time, I'll probably be sick of the car and want to sell it as soon as it's paid off anyway.
Why the pull to get off the PCP cycle? Sensible money is going the other way. Risk free motoring with (currently) no real like-for-like financial penalty. To buy a £10k car for instance if you can only afford to save £100 a month it would take 8 years.
The other option is to get a car loan but then that's also (higher) a monthly payment.
I'm currently on a PCP, I pay £340 a month. If I wanted to think about getting off the cycle but stay in the same type of car then I'd need to be saving £450 a month on top of the £340 so I could afford to spend £20k on a car in 4 years time. For some people thats not affordable so they're stuck with paying monthly.
I'm about to go and view a car this afternoon. Secured a personal loan in principle over 4 years with a low interest rate and will PX my PCP in for the car. I'll be paying £100 a month more than I do now but in 4 years time it will be my car and I won't have to pay a balloon. But of course in 4 years time, I'll probably be sick of the car and want to sell it as soon as it's paid off anyway.
ashleyman said:
If you're on a limited income and are on a PCP because it's affordable fixed cost motoring then you will never get off the cycle unless you save up and buy outright. For some, (including myself) that's just not going to happen.
To buy a £10k car for instance if you can only afford to save £100 a month it would take 8 years.
The other option is to get a car loan but then that's also (higher) a monthly payment.
I'm currently on a PCP, I pay £340 a month. If I wanted to think about getting off the cycle but stay in the same type of car then I'd need to be saving £450 a month on top of the £340 so I could afford to spend £20k on a car in 4 years time. For some people thats not affordable so they're stuck with paying monthly.
I'm about to go and view a car this afternoon. Secured a personal loan in principle over 4 years with a low interest rate and will PX my PCP in for the car. I'll be paying £100 a month more than I do now but in 4 years time it will be my car and I won't have to pay a balloon. But of course in 4 years time, I'll probably be sick of the car and want to sell it as soon as it's paid off anyway.
I'm note sure what point you are actually trying to make.To buy a £10k car for instance if you can only afford to save £100 a month it would take 8 years.
The other option is to get a car loan but then that's also (higher) a monthly payment.
I'm currently on a PCP, I pay £340 a month. If I wanted to think about getting off the cycle but stay in the same type of car then I'd need to be saving £450 a month on top of the £340 so I could afford to spend £20k on a car in 4 years time. For some people thats not affordable so they're stuck with paying monthly.
I'm about to go and view a car this afternoon. Secured a personal loan in principle over 4 years with a low interest rate and will PX my PCP in for the car. I'll be paying £100 a month more than I do now but in 4 years time it will be my car and I won't have to pay a balloon. But of course in 4 years time, I'll probably be sick of the car and want to sell it as soon as it's paid off anyway.
Irrespective of whether you pay a monthly fee for PCH, HP, PCP or bank loan, or even if you are saving up to buy a car outright, there is still going to be a monthly cost of £x associated with the ownership / use of the car. There is no getting away from this universal truth.
The £x amount will be greater or smaller than depending on your combination of circumstance, but it will be there nonetheless.
Mandat said:
I'm note sure what point you are actually trying to make.
Irrespective of whether you pay a monthly fee for PCH, HP, PCP or bank loan, or even if you are saving up to buy a car outright, there is still going to be a monthly cost of £x associated with the ownership / use of the car. There is no getting away from this universal truth.
The £x amount will be greater or smaller than depending on your combination of circumstance, but it will be there nonetheless.
There is always monthly cost associated with a car unless you pay with cash. Irrespective of whether you pay a monthly fee for PCH, HP, PCP or bank loan, or even if you are saving up to buy a car outright, there is still going to be a monthly cost of £x associated with the ownership / use of the car. There is no getting away from this universal truth.
The £x amount will be greater or smaller than depending on your combination of circumstance, but it will be there nonetheless.
My point was that if you've got a PCP because it's affordable motoring, if you can't afford to also save for a car and have a PCP at the same time then you're forever going to be on 'the cycle'.
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