Are the wheels about to fall of car finance?

[jimmybell]

http://www.telegraph.co.uk/news/2017/05/12/million...

Another angle on it - could Diesels be the trigger?

[funkyrobot]

My brother just handed back a 3 series he took out a PCP on in 2014. It was a 2010 318d, it had 40k miles on the clock when he got it and he had it for just under 3 years. In that time, he gave BMW financial services over £11,000 for the privilege.

Because he handed it back, he has nothing to show for it either.

Deary me. I can see why the manufacturers love this.

[funkyrobot]

jimmybell said:

http://www.telegraph.co.uk/news/2017/05/12/million...

Another angle on it - could Diesels be the trigger?

It never ceases to amaze me how stupid the people in power actually are.

[ashleyman]

funkyrobot said:

My brother just handed back a 3 series he took out a PCP on in 2014. It was a 2010 318d, it had 40k miles on the clock when he got it and he had it for just under 3 years. In that time, he gave BMW financial services over £11,000 for the privilege.

Because he handed it back, he has nothing to show for it either.

Deary me. I can see why the manufacturers love this.

He bought a 4 year old car with 40k miles on a PCP for 3 years?

That's £305 a month for what would have been a 4 year old car. And he was prepared to pay £305 a month for 3 years? Insane.

Not to insult your brother but there's good uses of PCP and bad. He just made a bad decision. I wonder what the GFV was...

[Milemuncher]

Is that Telegraph article a spoof? It rivals the BBC for factual innacuracy and The Daily Mail for unsubstantiated scare-mongering.

We're all doomed!

[Yipper]

funkyrobot said:

My brother just handed back a 3 series he took out a PCP on in 2014. It was a 2010 318d, it had 40k miles on the clock when he got it and he had it for just under 3 years. In that time, he gave BMW financial services over £11,000 for the privilege.

Because he handed it back, he has nothing to show for it either.

Deary me. I can see why the manufacturers love this.

Ouch.

Most car-finance deals, perhaps >80%, are weighted in favour of the seller (not the buyer). Finance can be extremely profitable if you target the right sectors and segments, like old folk in SUVs.

[funkyrobot]

ashleyman said:

funkyrobot said:

My brother just handed back a 3 series he took out a PCP on in 2014. It was a 2010 318d, it had 40k miles on the clock when he got it and he had it for just under 3 years. In that time, he gave BMW financial services over £11,000 for the privilege.

Because he handed it back, he has nothing to show for it either.

Deary me. I can see why the manufacturers love this.

He bought a 4 year old car with 40k miles on a PCP for 3 years?

That's £305 a month for what would have been a 4 year old car. And he was prepared to pay £305 a month for 3 years? Insane.

Not to insult your brother but there's good uses of PCP and bad. He just made a bad decision. I wonder what the GFV was...

I told him he was a fool. He didn't listen.

Thing is, how many other people get stung like that? I guess it's plenty because the amount of finance deals sold keeps steamrolling along.

GFV was between £6k and £7k if I recall correctly.

[daemon]

funkyrobot said:

My brother just handed back a 3 series he took out a PCP on in 2014. It was a 2010 318d, it had 40k miles on the clock when he got it and he had it for just under 3 years. In that time, he gave BMW financial services over £11,000 for the privilege.

Because he handed it back, he has nothing to show for it either.

Deary me. I can see why the manufacturers love this.

He looks to have been royally stiffed with that one.

You can buy a four year old 318D Sport for £12,500

http://www.autotrader.co.uk/classified/advert/2017...

A straightforward personal loan, £1500 down and financing the rest over 3 years and he could own that car outright for £322 a month @ 3.5% APR.

It shows you how bad PCP can be on used cars.

[Yipper]

Milemuncher said:

Is that Telegraph article a spoof? It rivals the BBC for factual innacuracy and The Daily Mail for unsubstantiated scare-mongering.

We're all doomed!

Its central theme is fair enough, though. Diesel car prices are collapsing and could drag half the industry into negative equity and financial losses.

[funkyrobot]

daemon said:

funkyrobot said:

My brother just handed back a 3 series he took out a PCP on in 2014. It was a 2010 318d, it had 40k miles on the clock when he got it and he had it for just under 3 years. In that time, he gave BMW financial services over £11,000 for the privilege.

Because he handed it back, he has nothing to show for it either.

Deary me. I can see why the manufacturers love this.

He looks to have been royally stiffed with that one.

You can buy a four year old 318D Sport for £12,500

http://www.autotrader.co.uk/classified/advert/2017...

A straightforward personal loan, £1500 down and financing the rest over 3 years and he could own that car outright for £322 a month @ 3.5% APR.

It shows you how bad PCP can be on used cars.

I've popped a reply to the excess mileage charges they are chasing him for in the VW excess mileage charge thread.

He has told me this morning he is just going to pay it though. Even more money in their pocket.

[daemon]

Yipper said:

Milemuncher said:

Is that Telegraph article a spoof? It rivals the BBC for factual innacuracy and The Daily Mail for unsubstantiated scare-mongering.

We're all doomed!

Its central theme is fair enough, though. Diesel car prices are collapsing and could drag half the industry into negative equity and financial losses.

Are they? Any evidence of that?

[berlintaxi]

daemon said:

Yipper said:

Milemuncher said:

Is that Telegraph article a spoof? It rivals the BBC for factual innacuracy and The Daily Mail for unsubstantiated scare-mongering.

We're all doomed!

Its central theme is fair enough, though. Diesel car prices are collapsing and could drag half the industry into negative equity and financial losses.

Are they? Any evidence of that?

Doubt it, if you look at Yippers' posts he likes to throw these ridiculous statements out there.

[liner33]

Plenty of articles suggesting its the case but I havent seen any hard evidence

https://www.theguardian.com/money/2017/mar/04/dies...

http://www.thisismoney.co.uk/money/cars/article-34...

https://www.thesun.co.uk/motors/3261529/toxic-tax-...

[Milemuncher]

Lots of newspapers trying to create a story with no supporting evidence?

Surely not.

[daemon]

Milemuncher said:

Lots of newspapers trying to create a story with no supporting evidence?

Surely not.

Thats exactly it.

[daemon]

liner33 said:

Plenty of articles suggesting its the case but I havent seen any hard evidence

https://www.theguardian.com/money/2017/mar/04/dies...

That one is wholly scaremongering.

liner33 said:

http://www.thisismoney.co.uk/money/cars/article-34...

That one suggests its a good time to buy diesels

liner33 said:

https://www.thesun.co.uk/motors/3261529/toxic-tax-...

And this one is from that well known, balanced news source, The Sun.

I think the diesel market has peaked - and lets be honest there were a load of people driving diesels who really shouldnt have been so it would be good if it was no longer seen as the "default" choice - but i dont think the market is "collapsing".

[Sheepshanks]

daemon said:

I think the diesel market has peaked -

I'm hoping used ones will go up in the price as they start to become in short supply!

daemon said:

and lets be honest there were a load of people driving diesels who really shouldnt

I know there's always something else you could buy but when my missus got her Tiguan there wasn't a petrol engine option. At least hers is EU6, but the complexity of the emissions stuff terrifies me. I really don't fancy running it out of warranty.

Against the grain though, it works well for local use - it chucks heat out almost instantly (has a chunky electric booster heater) and the dpf regens itself as needed.

Reading the Tiguan forum I visit, owners who swapped their old model diesel for the new model with petrol are finding the fuel consumption horrendous.

[Sa Calobra]

BigLion said:

We have far higher levels of home ownership than our euro counterparts...

I have a mortgage I don't on my house. The bank does.

There was a leasing industry body representative on BBC news this week saying there's no problem with customers paying x a month and committing to two years+. What an impartial commentator.

The been then screwed up the story by saying 'many people pay up to £100 or £200 a month'. Everyone I know with a leased car spends c£300+.

[daemon]

Sa Calobra said:

There was a leasing industry body representative on BBC news this week saying there's no problem with customers paying x a month and committing to two years+. What an impartial commentator.

Theres isnt - if its used correctly. The problem is the increasing percentage who arent using it correctly.

Its like mortgages - if used correctly they are great.

[Alex_225]

Was chatting to someone about their car and how they're getting rid of it as it's the end of the PCP deal they have. I asked how much the balloon payment was, about £10k. Car was worth more than that so I said, why not borrow £10k and buy the car, since they really liked it. Answer to that was, 'What if something breaks?' and 'I like new cars'. Like a BMW with 16k on the clock will be a sudden money pit.

Instead, start another PCP deal on a cheaper car than the previous model because the £8k deposit is now only £2k......I can't fathom this kind of mentality. As after then next PCP deal comes to an end where's no equity there so then what? Back to an older car? Downgrade to an even lower spec car? Just doesn't seem sustainable.

I'm not damning all PCP deals, I think there are some good deals out there at an almost disposable monthly amount for a really good car. I just don't understand paying so over the odds on mediocre cars.