PCP payment holiday
Discussion
fourstardan said:
How was that even possible to be accepted for.
Maybe because he owns 90% of his house and only has 10% mortgage maybe?Why purchase a depreciating asset, such as a Range Rover and tie up cash? Arguably if your car payments are more than your mortgage and you dont live in a s
thole, you are doing something right...For technical reasons on PCPs and leases this is difficult to do (given the calibration of GFVs). It would probably be better to allow payment holidays on end of life leases (as no market to sell vehicles into), than early term leases. At least there is a potential values return to pre Corona calculations in the long term.
Whether the finance companies will do anything, is difficult to determine. Ethically, morally they should do all they can - these are government shutdowns / but that action may depend on more government support.
fourstardan said:
Caddyshack said:
I think a holiday on loans, hp, pcp could be as helpful as a mortgage holiday to many. My Rangie costs more than my mortgage.
How was that even possible to be accepted for.Whilst this virus is unprecedented there is certainly an element of the housing crash about it.
Lenders are complicit in my opinion in offering tantalising deals to customers that make it seem like pretty much any car they want is within their grasp, and customers who - whilst they aren’t necessarily living hand to mouth - aren’t in a position to cope with repayments in the short term when they effectively lose their income (or a large part of it).
It has elements of the housing crash about it I think, neither party involved is blameless.
Once this all shakes out I think we’re going to see a different landscape when it comes to financing cars.
Lenders are complicit in my opinion in offering tantalising deals to customers that make it seem like pretty much any car they want is within their grasp, and customers who - whilst they aren’t necessarily living hand to mouth - aren’t in a position to cope with repayments in the short term when they effectively lose their income (or a large part of it).
It has elements of the housing crash about it I think, neither party involved is blameless.
Once this all shakes out I think we’re going to see a different landscape when it comes to financing cars.
JxJ Jr. said:
Mr Tidy said:
...it seems like another good reason to not have what you can't really afford!
Quite. Which is why it might be worth laying off judgements such as "...not really in the spirit of things...the decent thing would be to...".On the other hand though I don't think anyone could have predicted what's going on, many people have had sudden and large income drops and possibly gone from comfortablely affording the car to overnight not being able to. Still not the companies fault but hardly poor financial planning on the customers either?
Here's a specific example. When the crisis first really ramped up, say a fortnight ago, and it was apparent that certain sectors were going to be hit hard immediately, say taxi drivers servicing airports, the initial reaction from Alphera finance (backed by BMW I understand) was unhelpful in the extreme. Options ranged from we'll take the car back tomorrow to you can settle the balance, helpfully backed up by comments about how they would also damage the customer's credit history.
Over the course of the last week they have stalled on that position, claiming that they had no instructions from above. However in the last few days they have started to talk about putting together 'a new deal' with reduced payments but there is still no question of the typical three month payment holiday offered to mortgagees and many other borrowers. Final details are awaited.
In some ways this mirrors the position with unsecured lending. Two weeks ago Post Office Loans (unsecured), backed by Bank of Ireland, were not offering payment holidays. That suddenly changed at the end of last week whereby borrowers (not in arrears) could obtain a three month payment holiday, effectively extending the loan term by three months and with no impact on the credit history.
From my limited experience, none of this is surprising. The more mainstream and publicity conscious the lender, the more likely it is you will get help and sympathy. Once you get down to finance houses, you are talking about one step above unlicensed loan sharks, and you know how much sympathy they have when it comes to payment plans.
For those with deals backed by big players like BMW, it may pay to put pressure on the backer as much as the finance house. There is likely to be a massive issue with unaffordable houses and cars coming down the line, to use a popular expression.
Over the course of the last week they have stalled on that position, claiming that they had no instructions from above. However in the last few days they have started to talk about putting together 'a new deal' with reduced payments but there is still no question of the typical three month payment holiday offered to mortgagees and many other borrowers. Final details are awaited.
In some ways this mirrors the position with unsecured lending. Two weeks ago Post Office Loans (unsecured), backed by Bank of Ireland, were not offering payment holidays. That suddenly changed at the end of last week whereby borrowers (not in arrears) could obtain a three month payment holiday, effectively extending the loan term by three months and with no impact on the credit history.
From my limited experience, none of this is surprising. The more mainstream and publicity conscious the lender, the more likely it is you will get help and sympathy. Once you get down to finance houses, you are talking about one step above unlicensed loan sharks, and you know how much sympathy they have when it comes to payment plans.
For those with deals backed by big players like BMW, it may pay to put pressure on the backer as much as the finance house. There is likely to be a massive issue with unaffordable houses and cars coming down the line, to use a popular expression.
fourstardan said:
Caddyshack said:
I think a holiday on loans, hp, pcp could be as helpful as a mortgage holiday to many. My Rangie costs more than my mortgage.
How was that even possible to be accepted for.Edited by kieranblenk on Saturday 28th March 08:52
Serious question - I thought everyone on here had decided not to tie their cash up in a depreciating asset and had the money they could have used to buy the car outright invested elsewhere? Surely making the payments through the current crisis will be easy from their savings? Why would they need a payment holiday?
lonny said:
Serious question - I thought everyone on here had decided not to tie their cash up in a depreciating asset and had the money they could have used to buy the car outright invested elsewhere? Surely making the payments through the current crisis will be easy from their savings? Why would they need a payment holiday?
fourstardan said:
How was that even possible to be accepted for.
You don't have same affordability checks on finance that you do for mortgages. Added to that, many people who don't save, regard any surplus monthly salary as money safe to spend. Hence big numbers maxxed out on monthly payments, whether that includes a mortgage or not.av185 said:
lonny said:
Serious question - I thought everyone on here had decided not to tie their cash up in a depreciating asset and had the money they could have used to buy the car outright invested elsewhere? Surely making the payments through the current crisis will be easy from their savings? Why would they need a payment holiday?
lonny said:
Serious question - I thought everyone on here had decided not to tie their cash up in a depreciating asset and had the money they could have used to buy the car outright invested elsewhere? Surely making the payments through the current crisis will be easy from their savings? Why would they need a payment holiday?
I am sure plenty of people here don't have issues with financial liabilities, including on cars. I rarely see situations where "everyone" is in the same boat. 
lonny said:
Serious question - I thought everyone on here had decided not to tie their cash up in a depreciating asset and had the money they could have used to buy the car outright invested elsewhere? Surely making the payments through the current crisis will be easy from their savings? Why would they need a payment holiday?
All the money which they could/should have spent buying their car is of course wisely invested in a 'booming' stock market currently down around 25%. :nickfrog said:
lonny said:
Serious question - I thought everyone on here had decided not to tie their cash up in a depreciating asset and had the money they could have used to buy the car outright invested elsewhere? Surely making the payments through the current crisis will be easy from their savings? Why would they need a payment holiday?
I am sure plenty of people here don't have issues with financial liabilities, including on cars. I rarely see situations where "everyone" is in the same boat. av185 said:
lonny said:
Serious question - I thought everyone on here had decided not to tie their cash up in a depreciating asset and had the money they could have used to buy the car outright invested elsewhere? Surely making the payments through the current crisis will be easy from their savings? Why would they need a payment holiday?
All the money which they could/should have spent buying their car is of course wisely invested in a 'booming' stock market currently down around 25%. :I see the usual tts have ventured out of their ivory towers.
Given this is a once in a generation thing and or not seen since 1918, perhaps a bit of sympathy wouldn't go amiss. Imho asking for a payment holiday of a few months is prudent give how uncertain everything is. If they say no just cancel the DD and wait for them to collect the car in a few months. After that bangernomics for a few years?
TX.
ts have ventured out of their ivory towers.Given this is a once in a generation thing and or not seen since 1918, perhaps a bit of sympathy wouldn't go amiss. Imho asking for a payment holiday of a few months is prudent give how uncertain everything is. If they say no just cancel the DD and wait for them to collect the car in a few months. After that bangernomics for a few years?
TX.
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