Are the wheels about to fall of car finance?
Discussion
horsemeatscandal said:
People are buying their tyres on finance? Bloody hell.
This is an interesting thread. I bought my car on HP and while the APR was stupid I paid it off relatively quickly afterwards. In hindsight of course it would have been better to save for a year or so and then save myself a few hundred quid. I'll probably get a bank loan next time round if I don't pay cash. However, I have absolutely no interest whatsoever in PCP deals, although I can sometimes see the appeal. I just couldn't stomach paying so much money for something and probably never actually owning it. Is it just me or are new car radio/TV ads now making it much more clear that 'you will not own the vehicle'?
PCP finance is fairly similar to HP, but with the option of paying or not paying the optional final payment. Some people prefer the flexibility that this provides, and some don't. This is an interesting thread. I bought my car on HP and while the APR was stupid I paid it off relatively quickly afterwards. In hindsight of course it would have been better to save for a year or so and then save myself a few hundred quid. I'll probably get a bank loan next time round if I don't pay cash. However, I have absolutely no interest whatsoever in PCP deals, although I can sometimes see the appeal. I just couldn't stomach paying so much money for something and probably never actually owning it. Is it just me or are new car radio/TV ads now making it much more clear that 'you will not own the vehicle'?
Bill said:
How is it a fallacy?
Nearly all cars cost money, PCP PCH is just another way of spending it."Nothing at the end to show for it" Is to ignore how cash buyers lose in depreciation. They also have "nothing" other than the convenience and pleasure of driving it for the past few years, which lease drivers also have. It's a misguided quote.
wemorgan said:
Nearly all cars cost money, PCP PCH is just another way of spending it.
"Nothing at the end to show for it" Is to ignore how cash buyers lose in depreciation. They also have "nothing" other than the convenience and pleasure of driving it for the past few years, which lease drivers also have. It's a misguided quote.
This is true, but they still have nothing to show for it. Unless they took photos."Nothing at the end to show for it" Is to ignore how cash buyers lose in depreciation. They also have "nothing" other than the convenience and pleasure of driving it for the past few years, which lease drivers also have. It's a misguided quote.
Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
I don't care either way but it is a more expensive way of owning a (admittedly newer) car.
Bill said:
This is true, but they still have nothing to show for it. Unless they took photos.
Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
You are nearly there, but you need to give it some deeper thought.Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
What happens when the person who bought the car outright, sells it after a period? They will have paid out a sum of money in that time, and will also seeming have nothing to show for it?
Bill said:
This is true, but they still have nothing to show for it. Unless they took photos.
Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
I don't care either way but it is a more expensive way of owning a (admittedly newer) car.
I have bought 5 cars via PCP, I have never waited until the end of my term and with the exception of one that I chopped in after just 11 months have had equity in them. I understand perfectly why and how PCP works and go in eyes open, others do not and that is bloody stupid.Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
I don't care either way but it is a more expensive way of owning a (admittedly newer) car.
Mandat said:
Bill said:
This is true, but they still have nothing to show for it. Unless they took photos.
Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
You are nearly there, but you need to give it some deeper thought.Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
What happens when the person who bought the car outright, sells it after a period? They will have paid out a sum of money in that time, and will also seeming have nothing to show for it?
Granfondo said:
Mandat said:
Bill said:
This is true, but they still have nothing to show for it. Unless they took photos.
Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
You are nearly there, but you need to give it some deeper thought.Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
What happens when the person who bought the car outright, sells it after a period? They will have paid out a sum of money in that time, and will also seeming have nothing to show for it?
According to 99% finance xperts on here, there's no reason to worry. So I wouldn't. Just read this thread to put your mind at ease. http://www.pistonheads.com/gassing/topic.asp?t=165...
Tis all gud baby.
Tis all gud baby.
Mandat said:
Granfondo said:
Mandat said:
Bill said:
This is true, but they still have nothing to show for it. Unless they took photos.
Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
You are nearly there, but you need to give it some deeper thought.Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
What happens when the person who bought the car outright, sells it after a period? They will have paid out a sum of money in that time, and will also seeming have nothing to show for it?
Mandat said:
Granfondo said:
Mandat said:
Bill said:
This is true, but they still have nothing to show for it. Unless they took photos.
Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
You are nearly there, but you need to give it some deeper thought.Someone with a loan over three years will have circa 50% equity to move on with. Someone who has spent the same on PCP doesn't. Hence nothing to show for it despite making the same monthly payment.
What happens when the person who bought the car outright, sells it after a period? They will have paid out a sum of money in that time, and will also seeming have nothing to show for it?
daemon said:
MuscleSaloon said:
LordLoveLength said:
In Steven Wards 'Dealers Diary' pages in the latest Car Mechanics magazine he comments on the record stock levels appearing at bca car auctions over the last month. He feels that this will be bad for residuals.
And yet average prices are up year on year and auction demand has remained strong. ...
Mandat said:
You are nearly there, but you need to give it some deeper thought.
What happens when the person who bought the car outright, sells it after a period? They will have paid out a sum of money in that time, and will also seeming have nothing to show for it?
Apart from a wedge of cash.What happens when the person who bought the car outright, sells it after a period? They will have paid out a sum of money in that time, and will also seeming have nothing to show for it?
I know exactly where you are coming from, you are demonstrating the point I'm making. The car trade has shown people that they can get a new car for the same monthly payment, and persuaded them to ignore the fact that it ultimately costs them more.
And yes it's a new car.
But that to me isn't worth it.Gassing Station | General Gassing | Top of Page | What's New | My Stuff