Are the wheels about to fall of car finance?

Are the wheels about to fall of car finance?

Author
Discussion

Wooda80

1,398 posts

22 months

Thursday 7th November
quotequote all
gizlaroc said:
I bought my Audi A4 in 1996 and that was on a balanced lease payment scheme, which is deposit, monthlies and a final payment.

I bought an E46 318Ti in 2001 on a PCP from BMW Norwich.

I have not really known a time where finance was not part of car sales, I'm 46.

My old man bought his Merc E320 in 1994 in a similar way he said, he is sure that was deposit, monthlies and balloon. It was £36,000 at the time, we got the keys to our first house on the same day he picked that car up, our mortgage was £36,000 too.
He said there is no way he had £36k lying around.
You bought a new Audi on a lease aged 23? Shame on you - PH wisdom states that at that age you shoud be driving a 10 year old ripper and enjoy changing the oil / brakes / gearbox in your spare time whilst saving all your spare cash for the deposit on a house.

I trust that as a consequence of your financial recklessness you are now living in a cardboard box under a bridge ( or maybe out of the back of your latest leased Audi ) smile

Abarth595turismo

246 posts

12 months

Thursday 7th November
quotequote all
Wooda80 said:
You bought a new Audi on a lease aged 23? Shame on you - PH wisdom states that at that age you shoud be driving a 10 year old ripper and enjoy changing the oil / brakes / gearbox in your spare time whilst saving all your spare cash for the deposit on a house.

I trust that as a consequence of your financial recklessness you are now living in a cardboard box under a bridge ( or maybe out of the back of your latest leased Audi ) smile
Probably on an interest only mortgage. smile

Court_S

1,489 posts

124 months

Thursday 7th November
quotequote all
Dr Jekyll said:
Am I right in thinking that most of those using PCP are in the kind of jobs that 25 years ago would have included company cars? Despite the impression given on PH the average person on £30K or so simply doesn't consider buying brand new and regards a 3 year old car as verging on extravagance.
Quite possibly. Now that BIK is savage on diesels, opting out for a PCP is often more attractive financially, especially when you can take advantage of incentives etc.

I opted out and bought my car; excluding fuel it’s cheaper compared to my previous company car (that includes factoring in servicing etc). If I walk away from it, I’m in exactly the same position as if I’d taken a company car. I.e paid X per month for four years with nothing to show at the end. Difference is I get to drive something I actually want.

s m

18,116 posts

150 months

Thursday 7th November
quotequote all
Deep Thought said:
gizlaroc said:
I bought my Audi A4 in 1996 and that was on a balanced lease payment scheme, which is deposit, monthlies and a final payment.

I bought an E46 318Ti in 2001 on a PCP from BMW Norwich.

I have not really known a time where finance was not part of car sales, I'm 46.

My old man bought his Merc E320 in 1994 in a similar way he said, he is sure that was deposit, monthlies and balloon. It was £36,000 at the time, we got the keys to our first house on the same day he picked that car up, our mortgage was £36,000 too.
He said there is no way he had £36k lying around.
And from memory Ford were doing PCP deals from the mid 80s - Choices 123 i think it was called.

gizlaroc

13,093 posts

171 months

Thursday 7th November
quotequote all
Wooda80 said:
You bought a new Audi on a lease aged 23? Shame on you - PH wisdom states that at that age you shoud be driving a 10 year old ripper and enjoy changing the oil / brakes / gearbox in your spare time whilst saving all your spare cash for the deposit on a house.

I trust that as a consequence of your financial recklessness you are now living in a cardboard box under a bridge ( or maybe out of the back of your latest leased Audi ) smile
Haha, thinking back it was actually 1998 when I bought it, it was 3 years old from memory.

N189 SPM, cloth seats, no air con, 1.9tdi non red i so a massive 90hp.

In all honesty, if I hadn't wasted so much on cars over the years I could have had a decent pension by now and probably been able to retire at 55, no chance of that now.


Lt. Columbo

2,074 posts

45 months

Friday 8th November
quotequote all
s m said:
Damn, ends 31st August? Missed that deal.

DJT

198 posts

108 months

Friday 8th November
quotequote all
Deep Thought said:
Thought this was of interest.

Its an advert from a local newspaper that i found here, dated 3rd July 2003 - some 16+ years ago.



Interesting in that all those cars are advertised as a deposit plus monthly payment.

Some would have us believe thats a new thing.
I assume that was the fire sale as they were going bust.

MDMA .

5,187 posts

48 months

Friday 8th November
quotequote all
DJT said:
Deep Thought said:
Thought this was of interest.

Its an advert from a local newspaper that i found here, dated 3rd July 2003 - some 16+ years ago.



Interesting in that all those cars are advertised as a deposit plus monthly payment.

Some would have us believe thats a new thing.
I assume that was the fire sale as they were going bust.
Looking at the deposits, it's about all they were worth anyway.

Deep Thought

23,902 posts

144 months

Friday 8th November
quotequote all
DJT said:
Deep Thought said:
Thought this was of interest.

Its an advert from a local newspaper that i found here, dated 3rd July 2003 - some 16+ years ago.



Interesting in that all those cars are advertised as a deposit plus monthly payment.

Some would have us believe thats a new thing.
I assume that was the fire sale as they were going bust.
No. MG Rover didnt cease trading until Apr 2005, so almost 2 years later.

The dealer is still going strong and has a big multi franchise site. smile

Of mild interest, they were offered the Rover franchise back again - or whatever they're called now - and respectfully declined it.

Edited by Deep Thought on Friday 8th November 13:38

Deep Thought

23,902 posts

144 months

Friday 8th November
quotequote all
MDMA . said:
Looking at the deposits, it's about all they were worth anyway.
Yeah, kick Rover. Thats new. rolleyes

horsemeatscandal

478 posts

51 months

Friday 8th November
quotequote all
s m said:
Cars are cheap now, eh?

If you (roughly) adjust for inflation, you can get a brand new Mondeo for 24 months and 24,000 miles for £195 (in today’s money) per month with a similarly adjusted balloon payment.


Edit: ballsed up quoting on phone.



Edited by horsemeatscandal on Friday 8th November 14:17


Edited by horsemeatscandal on Friday 8th November 14:19

Deep Thought

23,902 posts

144 months

Friday 8th November
quotequote all
horsemeatscandal said:
Cars are cheap now, eh?

If you (roughly) adjust for inflation, you can get a brand new Mondeo for 24 months and 24,000 miles for £195 (in today’s money) per month with a similarly adjusted balloon payment.
The deposit on that Mondeo deal would be £7285 in todays money with monthly payments of £386.18.

List price in todays money would be £23,152.


horsemeatscandal

478 posts

51 months

Friday 8th November
quotequote all
Deep Thought said:
The deposit on that Mondeo deal would be £7285 in todays money with monthly payments of £386.18.

List price in todays money would be £23,152.
Okay I may be wrong, I just looked quickly on my phone as £215 seemed expensive. I assumed it was a ~1995 car so according to the BoE calculator that deposit is £7695 in today’s (okay, 2018’s) money.

Stick that on a Zetec Mondeo today over the same miles/time and Ford’s calculator is showing £195 with a final payment of £9090 which is £4813 in 1995 (as opposed to £5439 in the ad). Unless I’ve missed something really obvious that seems Fantastic in comparison?

Granted, I have no idea what the spec level of a Zetec is but I’m sure overall it’s better than a mid-90s Mondeo. Probably more airbags.




Deep Thought

23,902 posts

144 months

Friday 8th November
quotequote all
horsemeatscandal said:
Okay I may be wrong, I just looked quickly on my phone as £215 seemed expensive. I assumed it was a ~1995 car so according to the BoE calculator that deposit is £7695 in today’s (okay, 2018’s) money.

Stick that on a Zetec Mondeo today over the same miles/time and Ford’s calculator is showing £195 with a final payment of £9090 which is £4813 in 1995 (as opposed to £5439 in the ad). Unless I’ve missed something really obvious that seems Fantastic in comparison?

Granted, I have no idea what the spec level of a Zetec is but I’m sure overall it’s better than a mid-90s Mondeo. Probably more airbags.
Yes, there would be a general complaint that cars are more expensive these days but the reality is, once you factor in inflation they're usually in line with that OR cheaper. Plus, the cars of today are higher spec'd, have more safety features, are more economical etc.

horsemeatscandal

478 posts

51 months

Friday 8th November
quotequote all
Deep Thought said:
Yes, there would be a general complaint that cars are more expensive these days but the reality is, once you factor in inflation they're usually in line with that OR cheaper. Plus, the cars of today are higher spec'd, have more safety features, are more economical etc.
Sorry, I thought you’d disagreed with my original comment, hence why I ‘showed my working’.

I guess maybe 20+ years ago PCP or similar was less mainstream and perhaps angled more towards the wealthier.

In response to a comment earlier, surely there are plenty of people on £30k who are happy to PCP a car? £30k is a good wage in a lot of places and some finance deals can’t be far off double figures, for say something like a C1, Aygo or similar?

Deep Thought

23,902 posts

144 months

Friday 8th November
quotequote all
horsemeatscandal said:
In response to a comment earlier, surely there are plenty of people on £30k who are happy to PCP a car? £30k is a good wage in a lot of places and some finance deals can’t be far off double figures, for say something like a C1, Aygo or similar?
Coupled with the fact most families have two incomes now - a spend of a couple of hundred or so on a car isnt much of a hardship each month.

Carl_Manchester

5,481 posts

209 months

Saturday 9th November
quotequote all
Wooda80 said:
I trust that as a consequence of your financial recklessness you are now living in a cardboard box under a bridge ( or maybe out of the back of your latest leased Audi ) smile
Life lessons for young people reading this thread aka Finance bragging post:

my first pcp = after 4 years, randomly received a £8000 cheque from Porsche finance for all interest charge refunded due to admin legal error. Went to vegas with proceeds.

my second pcp = after 911 turbo for 3 years and 50k miles was given a £25k cheque as value of car had increased. Went to vegas with proceeds.

Did not make double payments on mortgage.

(hopes better half is not reading this thread).



Buster73

3,561 posts

100 months

Saturday 9th November
quotequote all
gizlaroc said:
Haha, thinking back it was actually 1998 when I bought it, it was 3 years old from memory.

N189 SPM, cloth seats, no air con, 1.9tdi non red i so a massive 90hp.

In all honesty, if I hadn't wasted so much on cars over the years I could have had a decent pension by now and probably been able to retire at 55, no chance of that now.
Yes but the neighbours are never impressed about pensions they can’t see....

Wills2

16,161 posts

122 months

Saturday 9th November
quotequote all
Deep Thought said:
Thought this was of interest.

Its an advert from a local newspaper that i found here, dated 3rd July 2003 - some 16+ years ago.



Interesting in that all those cars are advertised as a deposit plus monthly payment.

Some would have us believe thats a new thing.
Credit has been around since Adam was a lad, I have no idea why some PH'ers think it's something new....



4941cc

25,794 posts

153 months

Saturday 9th November
quotequote all
Wills2 said:
Credit has been around since Adam was a lad, I have no idea why some PH'ers think it's something new....
And it'll be around helping people to buy vehicles for quite some time yet, so the wheel aren't about to fall of per se.

Finance products available to retail consumers, interest rates, residual values and preferred funding methods may change, but the general tendency to finance rather than save up and buy outright years later aren't changing any time soon it seems.

HP migrated to PCP, PCP is migrating to personal leasing/contract hiring and eventually that'll migrate to a non-ownership, rental per use model, which will be the most significant deviation.