Are the wheels about to fall of car finance?

Are the wheels about to fall of car finance?

Author
Discussion

Dr Jekyll

20,366 posts

219 months

Saturday 9th November 2019
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What proportion of car acquisitions are of new cars (including pre registered) as opposed to used? HP and loans or savings are still the norm for used cars.

4941cc

25,857 posts

164 months

Saturday 9th November 2019
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Dr Jekyll said:
HP and loans or savings are still the norm for used cars.
Sub £10k used cars maybe. Main dealer used stock at up to 3-5 years old is still PCP eligible, so tends to go out on that. Likewise for independent traders, PCP often available now for vehicles up to 10 years old if the mileage will be under 80k at end of term. Very little HP sold on used at all. Loans/savings more common for generally older, cheaper stuff.

Ares

10,272 posts

78 months

Wednesday 13th November 2019
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4941cc said:
Dr Jekyll said:
HP and loans or savings are still the norm for used cars.
Sub £10k used cars maybe. Main dealer used stock at up to 3-5 years old is still PCP eligible, so tends to go out on that. Likewise for independent traders, PCP often available now for vehicles up to 10 years old if the mileage will be under 80k at end of term. Very little HP sold on used at all. Loans/savings more common for generally older, cheaper stuff.
Very little HP at all. PCP and Lease are the big boys.

Deep Thought

27,531 posts

155 months

Wednesday 13th November 2019
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Wills2 said:
Credit has been around since Adam was a lad, I have no idea why some PH'ers think it's something new....
That's not the point I was making though - there are people who think the way cars are now advertised only as deposit + monthly payment is a new thing.

JPJPJP

9,416 posts

126 months

Wednesday 13th November 2019
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Zopa is getting more into car finance

It commissioned research that shows many people don’t understand the detail of car finance.

Whether they need to understand the detail, or not, is another question

https://www.p2pfinancenews.co.uk/2019/10/09/zopa-b...

Wooda80

1,743 posts

33 months

Wednesday 13th November 2019
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JPJPJP said:
Zopa is getting more into car finance

It commissioned research that shows many people don’t understand the detail of car finance.

Whether they need to understand the detail, or not, is another question

https://www.p2pfinancenews.co.uk/2019/10/09/zopa-b...
The Zopa article in the link claims that "The vast majority – nine in 10 – were unable to pick out the lowest-cost option."

That's not surprising given how ambiguous Zopa's example is.

The table contains a column headed "Total Cost" so clearly the one with the lowest figure in that column should be ( and is ) the lowest cost option. But it's not the one with the lowest interest rate, rather it's the one with the smallest finance balance, so it's not the option with the lowest cost of finance.

More confusingly the table is titled "Choosing the best car finance deal..." The best car finance deal is the one which provides the lowest cost solution taking into account the amount available as a deposit, the desired monthly payment, the length of time the car is to be kept and whether or not you wish to have an interest in the car's value at the end of the agreement The best deal for me will probably be different to the one that's best for you.

Carl_Manchester

7,287 posts

220 months

Friday 24th April
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Time to buckle up the belts on this thread as the answer to the OP is now a big ‘yes’.

Leon R

928 posts

54 months

Friday 24th April
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If you go back to the beginning of this thread you will see it started 3 years ago and apparently it wasn't looking good then.

ging84

6,462 posts

104 months

Friday 24th April
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Even if car finance debt was a big bubble ready to 1 day burst, does the current crisis burst it, or does all the economic stimulus and interest rate cuts give them the cheap money they need to shore everything up?

Justin Case

1,811 posts

92 months

Friday 24th April
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I'm not sure if the wheels have fallen off car finance yet, but they have definitely fallen off the PCP Payment Holiday thread smile

Carl_Manchester

7,287 posts

220 months

Friday 24th April
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ging84 said:
Even if car finance debt was a big bubble ready to 1 day burst, does the current crisis burst it, or does all the economic stimulus and interest rate cuts give them the cheap money they need to shore everything up?
Unemployment is the problem.


ging84

6,462 posts

104 months

Friday 24th April
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Carl_Manchester said:
Unemployment is the problem.
But is it?
I mean sure if you are in the business of lending money many people not being able to pay is not good, but these are secured loans, they can repo the cars. The question is will these repo cars need to be sold quickly crashing thier values causing a downwards spiral, or can they hold them and get most of their money back over a longer period.

Deep Thought

27,531 posts

155 months

Friday 24th April
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Leon R said:
If you go back to the beginning of this thread you will see it started 3 years ago and apparently it wasn't looking good then.
No, the anti-PCPers were rubbing their hands three years ago, hoping the PCPers would get their comeuppance after the FCA investigation.

Damp squib as many (including myself) predicted, nothing much changed.

Different issue today, but again the car companies are already planning their bounce back with exceptional offers planned.


Deep Thought

27,531 posts

155 months

Friday 24th April
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ging84 said:
Even if car finance debt was a big bubble ready to 1 day burst, does the current crisis burst it, or does all the economic stimulus and interest rate cuts give them the cheap money they need to shore everything up?
It'll not burst. Deflate slightly short term, but not burst.

Deep Thought

27,531 posts

155 months

Friday 24th April
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Justin Case said:
I'm not sure if the wheels have fallen off car finance yet, but they have definitely fallen off the PCP Payment Holiday thread smile
Have you any recent holiday pictures to prove that?

hehe

Deep Thought

27,531 posts

155 months

Friday 24th April
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ging84 said:
Carl_Manchester said:
Unemployment is the problem.
But is it?
I mean sure if you are in the business of lending money many people not being able to pay is not good, but these are secured loans, they can repo the cars. The question is will these repo cars need to be sold quickly crashing thier values causing a downwards spiral, or can they hold them and get most of their money back over a longer period.
Whos repo'ing cars?

Probably lots more VTs but the finance companies need to find ways to resist that - with the likes of payment holidays, etc. A VT or having to repo is bad news for the finance company.

Back in 2009 ish, there was an exponential escalation in VTs and handbacks at the end of terms but the car companies had to find ways to absorb that and recover from it, which they did.

Butter Face

21,820 posts

118 months

Friday 24th April
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Carl_Manchester said:
Time to buckle up the belts on this thread as the answer to the OP is now a big ‘yes’.
And all it took was a worldwide pandemic. Mass unemployment, closure of hundreds of businesses, the almost collapse of many financial systems and complete lockdown of half the worlds population.

Those wheels were deffo ready to fall off eh!

And even after all that, it’ll keep on rolling after this is all over.
Friday 24th April
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Carl_Manchester said:
Time to buckle up the belts on this thread as the answer to the OP is now a big ‘yes’.
Who’s going to post up their holiday pics first?

Friday 24th April
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Deep Thought said:
Have you any recent holiday pictures to prove that?

hehe
Damn beat me to it lol 😂

Bob-2146

279 posts

30 months

Friday 24th April
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Carl_Manchester said:
Time to buckle up the belts on this thread as the answer to the OP is now a big ‘yes’.
Definitely, the whole car finance house of cards is coming down soon.

Lot of people evidently still in denial about it all though... here are the PCPers currently, there’s Brooking and Daemon in the back there: laugh