Ask a car salesman anything...anything at all.
Discussion
RobDown said:
Why on earth would be PCP be abolished? Other than the minority on here who think it’s the root of all evil?
The FCA is concerned about there being undue incentives to sell the product but that’s it. Much of politicians and regulators time is spent in finding ways of making affordable credit available to the masses who need it (one reason why the BoE is keen to encourage the rise of alternative finance). It would be ridiculous for them to ban PCP
You can disagree if you like. But you’re wrong
Oh indeed. But an outbreak on the scale of PPI related to "have you been mis-sold PCP" could change things significantly, as it did with PPI, which we used to sell also. The FCA is concerned about there being undue incentives to sell the product but that’s it. Much of politicians and regulators time is spent in finding ways of making affordable credit available to the masses who need it (one reason why the BoE is keen to encourage the rise of alternative finance). It would be ridiculous for them to ban PCP
You can disagree if you like. But you’re wrong
The days of undue incentives have long since been stamped out. Interest rates being what they are has reduced dealer commissions, commissions paid to sales execs are practically negligible compared to what they were before all the tightening up of consumer credit regulations and general insurance sales.
Most PCP end term payments are there or there abouts the final value that I see unless customers massively exceeded mileage or the cars in horrendous condition.
I think from current residuals tightening up its going to be far more common for customers to have equity in any deal taken out of late or over the last 2 years the artificially high balloons not really being around so much as finance co's have got more risk averse.
I think from current residuals tightening up its going to be far more common for customers to have equity in any deal taken out of late or over the last 2 years the artificially high balloons not really being around so much as finance co's have got more risk averse.
Recently seeing a fair few Fiat 500's coming to the end of their PCP agreements in circa £1k negative equity.
Renault Clio and Captur are there or thereabouts when it comes to their balloon payment, Kadjar is struggling with negative equity circa £1k but this is a symptom of heavy pre registering a couple of years ago and it not being up there with the best sellers; pre facelft it aged very quickly.
Dacia is brilliant with PCP renewals, they always have decent equity at the end of their agreements, occasionally more than £1000 but always at least £500.
Renault Clio and Captur are there or thereabouts when it comes to their balloon payment, Kadjar is struggling with negative equity circa £1k but this is a symptom of heavy pre registering a couple of years ago and it not being up there with the best sellers; pre facelft it aged very quickly.
Dacia is brilliant with PCP renewals, they always have decent equity at the end of their agreements, occasionally more than £1000 but always at least £500.
Wooda80 said:
Most people who fail finance do not do so because they can't afford the payments.
There are lots of people out there, right across the social spectrum, who have plenty of income but simply do not pay their bills on time, whether that's due to being disorganised or arrogant, and that's what creates the history of missed or late payments that results in a finance decline.
These people know damn well that they aren't going to sail through normal finance acceptance channels, and as HTP says it's annoying when they don't declare this at the appropriate point. Often but not always they have the extra cash available to make up the larger deposit required and the higher monthly payment due to the exhorbitant interest rate doesn't seem to faze them either.
So what exactly happens if a customer tries to finance a car that is deemed unaffordable? Is it a straight decline or is the buyer asked to increase his deposit? Can the proposal be switched over to a cheaper car or would the customer need to reapply? There are lots of people out there, right across the social spectrum, who have plenty of income but simply do not pay their bills on time, whether that's due to being disorganised or arrogant, and that's what creates the history of missed or late payments that results in a finance decline.
These people know damn well that they aren't going to sail through normal finance acceptance channels, and as HTP says it's annoying when they don't declare this at the appropriate point. Often but not always they have the extra cash available to make up the larger deposit required and the higher monthly payment due to the exhorbitant interest rate doesn't seem to faze them either.
CSLM3CSL said:
So what exactly happens if a customer tries to finance a car that is deemed unaffordable? Is it a straight decline or is the buyer asked to increase his deposit? Can the proposal be switched over to a cheaper car or would the customer need to reapply?
As you say, if affordability is the issue then the proposal will be accepted but with a max advance ( a maximum lend ) which would therefore require a larger deposit,As it is the affordability of the repayment that is being assessed rather than the amount borrowed, it's worth asking if they would lend the full amount over a longer period ( hence lower payment ) assuming that you are not already at the longest term possible for the age of the vehicle.
If you decided to go for a less expensive vehicle from the same dealer then that would need some admin but wouldn't be counted as a fresh application.
Looking at it the other way, just because your application has been "max advanced" doesn't necessarily mean that they don't think you can afford it. The car will have a maximum value loan to value figure as well, but as this is usually around 110% of CAP retail it would mean that the car is very overpriced if this were the case!
There was a London Motorcycle dealer in the 80s who seemed to specialise in getting broke young bikers onto expensive bikes. One trick was apparently to finance comprehensive insurance as well as the bike, then downgrade the insurance for a refund, then use the refund as a deposit.
I was in there a couple of times (nice big showroom to browse round) and overheard people trying to get finance who clearly had no money at all, and were very vague about their income.
I was in there a couple of times (nice big showroom to browse round) and overheard people trying to get finance who clearly had no money at all, and were very vague about their income.
HTP99 said:
You get the likes of CarWow and some dealers (one in particular) will offer a car at £600 less than all the margin and they also have to pay CarWow £360 (or thereabouts) if the deal goes through so already on a £1k loss, but the dealer are anticipating/hoping that it will achieve a certain percentage over target achievement so it is a loss leader in anticipation of hitting target and a retrospective £1k per unit back to the beginning of the quarter.
I don’t get this. So if they have to hit their target to make nothing at all? Edited by HTP99 on Tuesday 16th July 20:20
irish boy said:
HTP99 said:
You get the likes of CarWow and some dealers (one in particular) will offer a car at £600 less than all the margin and they also have to pay CarWow £360 (or thereabouts) if the deal goes through so already on a £1k loss, but the dealer are anticipating/hoping that it will achieve a certain percentage over target achievement so it is a loss leader in anticipation of hitting target and a retrospective £1k per unit back to the beginning of the quarter.
I don’t get this. So if they have to hit their target to make nothing at all? Edited by HTP99 on Tuesday 16th July 20:20
Integroo said:
irish boy said:
HTP99 said:
You get the likes of CarWow and some dealers (one in particular) will offer a car at £600 less than all the margin and they also have to pay CarWow £360 (or thereabouts) if the deal goes through so already on a £1k loss, but the dealer are anticipating/hoping that it will achieve a certain percentage over target achievement so it is a loss leader in anticipation of hitting target and a retrospective £1k per unit back to the beginning of the quarter.
I don’t get this. So if they have to hit their target to make nothing at all? Edited by HTP99 on Tuesday 16th July 20:20
Edited by HTP99 on Sunday 21st July 17:39
RobinBanks said:
Speaking to a LR sales manager he was saying RRs are well underwater at end of term and it’s really affecting their secondhand stock as customers are handing back rather than trading in.
LR will just put them though a closed dealer auction, stock will be bought @ market value.Ask any (well most) BMs a question, any question, and they're programmed to say PCP.
PositronicRay said:
RobinBanks said:
Speaking to a LR sales manager he was saying RRs are well underwater at end of term and it’s really affecting their secondhand stock as customers are handing back rather than trading in.
LR will just put them though a closed dealer auction, stock will be bought @ market value.Ask any (well most) BMs a question, any question, and they're programmed to say PCP.
Joey Deacon said:
Wooda80 said:
@JoeyDeacon
It's just a shop at the end of the day. I can go into any shop and ask for a discount. Sometimes they'll say yes, sometimes no, sometimes something rude. Some shops like Renault and Honda in your example do special offers, other shops like CarWow do price match guarantees. Some shops will order stuff in for you, others will only sell what they stock. You aren't under any obligation to buy a product that you don't want or to a pay a price that you don't like.
How did you resolve it in the end? Did you place your order there anyway or did you buy a SEAT from the CarWow dealer or did you choose a different make?
I didn't like the Jazz and I certainly would not be paying £18k for one. The Renault dealer offered the carwow price without me even asking (they sell through carwow) but I just couldn't bring myself to pay that much for a Megane. The Leon was OK but it is clear a new model is coming out soon so I didn't want to be that guy who paid for the old model just as the new one was coming out.It's just a shop at the end of the day. I can go into any shop and ask for a discount. Sometimes they'll say yes, sometimes no, sometimes something rude. Some shops like Renault and Honda in your example do special offers, other shops like CarWow do price match guarantees. Some shops will order stuff in for you, others will only sell what they stock. You aren't under any obligation to buy a product that you don't want or to a pay a price that you don't like.
How did you resolve it in the end? Did you place your order there anyway or did you buy a SEAT from the CarWow dealer or did you choose a different make?
So the cash stayed in the bank and I have carried on driving my shed.
I just found all of them pretty boring and white goods, I would certainly not look back over my shoulder ever time I locked it and walked away. I am just curious about the average car buyer, do they literally pay full price for the first car they test drive?
Theguy5 said:
Do they just check your credit score or do you have to do the full financials form, monthly earnings, expenditure etc?
The dealer will usually just ask you who you are, where you live, your occupation, bank details and gross annual income and submit this to the finance company.The finance company will look at your credit file and see your other credit expenditure ( mortgage, personal loan, credit cards, other HP etc ). Some, like Black Horse, will ask you to state any commitments that are not part of a credit agreement ( so rent, school fees, maintenance to a former partner etc ) . They aren't bothered how much you spend on on catfood or coke.
lornemalvo said:
Your comment about everything just being white goods caught my eye. I've been deliberating for months what to buy, new or nearly new up to 25k or so but nothing out there excites me. Anything that does appeal a bit comes with horror stories about reliability (e.g almost anything VW based). Having had limited funds for many years, it's very frustrating
Similar experience here. There is so little out there that I'd look at and think "I'm really glad I spent £25,000 on that". I bought a brand new XC60 3.5 years ago for £35k odd which is in the hands of ex-wife; every time I drive it I'm astonished that these things are objects of desire for so many people.I bought an MX5 as the last hurrah of the high revving NASP roadster, with the intention of keeping it forever. Perfect choice for a man with three children
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