Car credit hits £58bn out of total consumer credit of £200bn
Discussion
joeshaw123 said:
That's UK's national/government debt. And its more like £1.8T now?
Total consumer credit is £200B, that's all credit cards, store cards, personal loans and car finance (leases not included?), and not including mortgages. So £58B is a large proportion of it! Add to that as mentioned any unsecured personal loans that have been used to purchase cars (myself included here), and its probably much greater than that.
I think the majority of people have a general feeling of apathy towards this to be honest.
The majority of my friends/colleagues have no interest in cars but buy their new cars on PCP, it's just what they do. Trade in the 3-5 year old one to cover balloon/sign up for a new 3-5 year deal that they budget for. I would say 95% of them have one that is well within their means and they just budget for it accordingly out of their monthly salary, they like that its warrantied and maintenance plans can be included too. This bit doesn't worry me.
Sales will surely drop as interest rates rise.
I do feel like something has to give though. How can we consume 2.5M+ brand new cars a year? Over 50% of that is fleet sales. So in 3 years thats 1.3M, 3 year old fleet cars for sale, every year. How do we need so many?
Sorry for the ramble.
Much like you, everyone I know with a car on PCP (and the odd lease) is doing that mainly because it's just an appliance, and a affordable (not the cheapest, but affordable) and fixed cost route to getting one that'll keep working, or someone will pick up the bill for fixing it if it does go pop. Total consumer credit is £200B, that's all credit cards, store cards, personal loans and car finance (leases not included?), and not including mortgages. So £58B is a large proportion of it! Add to that as mentioned any unsecured personal loans that have been used to purchase cars (myself included here), and its probably much greater than that.
I think the majority of people have a general feeling of apathy towards this to be honest.
The majority of my friends/colleagues have no interest in cars but buy their new cars on PCP, it's just what they do. Trade in the 3-5 year old one to cover balloon/sign up for a new 3-5 year deal that they budget for. I would say 95% of them have one that is well within their means and they just budget for it accordingly out of their monthly salary, they like that its warrantied and maintenance plans can be included too. This bit doesn't worry me.
Sales will surely drop as interest rates rise.
I do feel like something has to give though. How can we consume 2.5M+ brand new cars a year? Over 50% of that is fleet sales. So in 3 years thats 1.3M, 3 year old fleet cars for sale, every year. How do we need so many?
Sorry for the ramble.
If rate rise, sales may fall a bit, as those that cant really afford it but do want a shiny new motor got for used cars (will used prices firm up? countering the interest rises on a PCP with better residuals GFV??), but for most I think they'll go for a slightly cheaper model, downside from 5 series to 3 series, Q7 to toureg, something along those lines, or tick a few less options boxes.
As has been reported this morning about falling sales, a lot of it is around uncertainty on what'll happen to diesels and brexit, rather than any particular credit bubble.
A friend of mine who knows NOTHING about cars asked for help choosing a new one, "I have to get rid of mine, it's a diesel".. people panic at whatever they read in the metro that morning.
ILoveMondeo said:
Much like you, everyone I know with a car on PCP (and the odd lease) is doing that mainly because it's just an appliance, and a affordable (not the cheapest, but affordable) and fixed cost route to getting one that'll keep working, or someone will pick up the bill for fixing it if it does go pop.
If rate rise, sales may fall a bit, as those that cant really afford it but do want a shiny new motor got for used cars (will used prices firm up? countering the interest rises on a PCP with better residuals GFV??), but for most I think they'll go for a slightly cheaper model, downside from 5 series to 3 series, Q7 to toureg, something along those lines, or tick a few less options boxes.
As has been reported this morning about falling sales, a lot of it is around uncertainty on what'll happen to diesels and brexit, rather than any particular credit bubble.
A friend of mine who knows NOTHING about cars asked for help choosing a new one, "I have to get rid of mine, it's a diesel".. people panic at whatever they read in the metro that morning.
That pretty much summarises it.If rate rise, sales may fall a bit, as those that cant really afford it but do want a shiny new motor got for used cars (will used prices firm up? countering the interest rises on a PCP with better residuals GFV??), but for most I think they'll go for a slightly cheaper model, downside from 5 series to 3 series, Q7 to toureg, something along those lines, or tick a few less options boxes.
As has been reported this morning about falling sales, a lot of it is around uncertainty on what'll happen to diesels and brexit, rather than any particular credit bubble.
A friend of mine who knows NOTHING about cars asked for help choosing a new one, "I have to get rid of mine, it's a diesel".. people panic at whatever they read in the metro that morning.
joeshaw123 said:
TartanPaint said:
What the hell do they do with all the cars which are handed back? Are there parking lots full of 3 year old, 24k mile cars somewhere? They don't seem to be on the market in sufficient quantity to account for all the new cars sold. That's just gut feel, I have no data.
This is what confuses me, in particular the 3 year old, 60k mile former fleet VAG/BMW/Mercs. Like I said in my previous post, over half of the 2.5M car sales are fleet so thats 1.3M fleet cars most likely getting handed back in 3 years time. Where do they all go?!https://www.statista.com/statistics/299972/average...
So 2.5/31 = 8%. Sounds about right - theres probably 8% per year of the oldest cars being scrapped
I blame all the wannabes who are signed up to finance deals on horrible over priced blinged up diesel Audi's.
You know who I mean - the ones who are proud of 'their' new car - which they hire for between £250 and £600 a month and have nothing to show but a hole in their finances at the end of the agreement.
You know who I mean - the ones who are proud of 'their' new car - which they hire for between £250 and £600 a month and have nothing to show but a hole in their finances at the end of the agreement.
rallycross said:
I blame all the wannabes who are signed up to finance deals on horrible over priced blinged up diesel Audi's.
You know who I mean - the ones who are proud of 'their' new car - which they hire for between £250 and £600 a month and have nothing to show but a hole in their finances at the end of the agreement.
You know who I mean - the ones who are proud of 'their' new car - which they hire for between £250 and £600 a month and have nothing to show but a hole in their finances at the end of the agreement.
Not this s
t again!Of course they have something to show for it.
At the very least they have the exclusive use of a brand new "blinged up diesel Audi", which is covered by manufacturer's warranty, offers peace of mind motoring, includes annual VED, and doesn't require a significant capital outlay that purchasing would entail.
Stakeholders want increased sales to boost shares and dividends. If everyone bought a car once every 10 years sales of cars would be a fraction of what they are now. So manufacturers invent this thing where you pay for a car the same as you would if you bought it outright, except you don't own it and you pay (in some cases) interest on the payments. Then you give it back at the end of the term to be sold again.
Do people need a new mobile every two years? I have an iPhone 6. I haven't upgraded to a 7 or an 8 because it is 9/10ths the same in functionality except I've saved myself paying out £800 and haven't thrown away a perfectly good phone that I have literally just paid another £800 for.
Companies need you to buy stuff to keep sales and profits up. There are millions of nearly new cars out there sitting around doing nothing and billions of just paid up phones sitting in drawers.
We live in a throwaway society which benefits the companies with bumper profits, and benefits the consumer with the latest and greatest thing. Which is fine, it's good to have new stuff, it encourages R&D into new tech and competition which ultimately makes things cheaper. The downside is enormous material waste and mountains of barely serviceable debt.
Do people need a new mobile every two years? I have an iPhone 6. I haven't upgraded to a 7 or an 8 because it is 9/10ths the same in functionality except I've saved myself paying out £800 and haven't thrown away a perfectly good phone that I have literally just paid another £800 for.
Companies need you to buy stuff to keep sales and profits up. There are millions of nearly new cars out there sitting around doing nothing and billions of just paid up phones sitting in drawers.
We live in a throwaway society which benefits the companies with bumper profits, and benefits the consumer with the latest and greatest thing. Which is fine, it's good to have new stuff, it encourages R&D into new tech and competition which ultimately makes things cheaper. The downside is enormous material waste and mountains of barely serviceable debt.
av185 said:
Latest I phone generation renters craving aspirational 
probably white A4 tdis that every man and his dog pcps get suckered in to upping the monthlies rip off car credit black hole shocker.....
You said it better than I could, a credit crisis created by morons aspiring to drive around in a 4 cylinder diesel Tdi low emission rattle boxes - innit flash bruv! probably white A4 tdis that every man and his dog pcps get suckered in to upping the monthlies rip off car credit black hole shocker.....rallycross said:
av185 said:
Latest I phone generation renters craving aspirational probably white A4 tdis that every man and his dog pcps get suckered in to upping the monthlies rip off car credit black hole shocker.....
You said it better than I could, a credit crisis created by morons aspiring to drive around in a 4 cylinder diesel Tdi low emission rattle boxes - innit flash bruv! probably white A4 tdis that every man and his dog pcps get suckered in to upping the monthlies rip off car credit black hole shocker..... pcper parked on the drive lording it over the neighbours identical soporific euro stbox.Oh wait.
:The Moose said:
£58bil. What's that - less than £900 per person? Hardly a major deal.
would it not be better to divide the sum by the number of people credit is available to rather than the whole population. Even then a lot of those for numerous reasons, such as still being in education, unemployed, cash buyers don't lease cars kambites said:
Jimboka said:
What’s the other 142 billion loaned against?!
Most of is unsecured - things like credit cards, overdrafts, bank loans, pay-day loans,...rallycross said:
You said it better than I could, a credit crisis created by morons aspiring to drive around in a 4 cylinder diesel Tdi low emission rattle boxes - innit flash bruv!
A credit crisis?An average household debt of £3,000 on a car isn’t a crisis, it sounds like a perfectly sensible number. That’s one in five households owing £15k, and the other four paying cash.
Willy Nilly said:
The Moose said:
£58bil. What's that - less than £900 per person? Hardly a major deal.
would it not be better to divide the sum by the number of people credit is available to rather than the whole population. Even then a lot of those for numerous reasons, such as still being in education, unemployed, cash buyers don't lease cars Gassing Station | General Gassing | Top of Page | What's New | My Stuff