Why the PH hatred for PCP?

[Deep Thought]

TheStigsWeeBrother said:

Irispective of where it started it was caused by irresponsible lending/borrowing and it certainly had a knock on effect to the UK.

The crisis was caused in the US, not in the UK. The knock on effect was not because of debt levels here.

TheStigsWeeBrother said:

Salesmen love PCP because they can sell cars to people who otherwise would be looking at either far cheaper cars or pre-owned. (Not ph members obviously because they all have the funds to buy outright but it is invested getting double digit returns after tax)

Salesmen are paid to sell cars. PCP is a tool that helps enable that.

If people didnt buy a new car, then the salesman would sell them a used one? There is no excessive "love" by salesmen for PCP deals other than its a mechanism for enabling them to sell cars - which is their job.

[nickfrog]

Gordon_Roslin said:

To put it simply: dealers want you to PCP as it benefits them. If you want to do it fine but don't pretend you are financial heroes for spending £17,000 to borrow a 3 series for 3 years.

Gordon, what if I am spending a grand total of £5,200 including road tax for 2 years for a car that will depreciate more than £6k+ in that time ? Is that acceptable to you or is that "typical" millenial behaviour ? Would you have preferred that I spend £20k instead to trigger the £6k depreciation and miss out on HMRC's 40% uplift for pension contribution relief ? I am not expecting an answer from you.

Edited by nickfrog on Monday 4th February 22:22

[Superleg48]

Deep Thought said:

Salesmen are paid to sell cars. PCP is a tool that helps enable that.

If people didnt buy a new car, then the salesman would sell them a used one? There is no excessive "love" by salesmen for PCP deals other than its a mechanism for enabling them to sell cars - which is their job.

Erm, notwithstanding the enhanced commission these Salesmen receive for selling a Finance Deal.

[nickfrog]

Superleg48 said:

Erm, notwithstanding the enhanced commission these Salesmen receive for selling a Finance Deal.

What seems to be the problem ? Finance on cars didn't start last Tuesday, whatever form it takes. Some people are totally stupid with money, some less so. Irrespective of whether they own their car or not.

Some people even take PCP to trigger additional contributions and pay it off straight away, I know quite a few.

Edited by nickfrog on Monday 4th February 22:40

[nikaiyo2]

lornemalvo said:

Firstly, personal debt is not on the decrease, for just one source of information, please read : https://www.theguardian.com/business/2019/jan/07/a...

Secondly, I believe large personal debt did contribute to the depth of the financial crash. It was initiated largely by the misuse of sub prime loans both here and in the USA. It takes two parties for sub prime loans to become that commonplace, over keen lenders and borrowers who borrowed too much and got out of their depth. Just my opinion. I believe that willingness to live in a permanent state of debt is largely a generational thing. My parents' generation and my generation hated to be in debt, except when absolutely necessary, such as mortgage borrowing. We also borrowed to buy cars on HP but very few bought new cars. We bought an old banger, learned to maintain them ourselves to save money and gradually upgraded over the years.Younger generations are far less resistant to large levels of debt. Different attitudes altogether. Many have no choice but to be heavily in debt just to survive, but many do have a choice, and as a result too many people are two or three pay days away from homelessness, and too many people save little or nothing. Millions have no financial buffer at all, but have a shiny new car on the drive. I'm not knocking it, but I couldn't live like that. This is a sweeping generalisation and does not apply to many, but the proliferation of new cars and national debt levels do tell part of the tale. Again, just my opinion.

Lol the fking Guardian, really that is a source of information? Lol fukcing tax dodging hypocrites the lot of them.

Maybe give the Viz a go, it is less ranty garbage.

[Deep Thought]

Superleg48 said:

Deep Thought said:

Salesmen are paid to sell cars. PCP is a tool that helps enable that.

If people didnt buy a new car, then the salesman would sell them a used one? There is no excessive "love" by salesmen for PCP deals other than its a mechanism for enabling them to sell cars - which is their job.

Erm, notwithstanding the enhanced commission these Salesmen receive for selling a Finance Deal.

Erm, they'd get that on an HP deal too. Long before PCP deals were prevalent, the prevalent method of purchase was HP.

Lets not pretend that if there was no PCP everyone would be buying their cars with cash.

[Butter Face]

Deep Thought said:

Superleg48 said:

Deep Thought said:

Salesmen are paid to sell cars. PCP is a tool that helps enable that.

If people didnt buy a new car, then the salesman would sell them a used one? There is no excessive "love" by salesmen for PCP deals other than its a mechanism for enabling them to sell cars - which is their job.

Erm, notwithstanding the enhanced commission these Salesmen receive for selling a Finance Deal.

Erm, they'd get that on an HP deal too. Long before PCP deals were prevalent, the prevalent method of purchase was HP.

Lets not pretend that if there was no PCP everyone would be buying their cars with cash.

Yes, quite. We (in the main) don't normally give a stuff how people finance the car. The extra commission is nice, but finance involves a lot of extra work to make up for it so it's fair to expect extra payment for it.

[Welshbeef]

Ok let’s choose a decent PH car and see what the PH massive can find as a “good” pcp/PCH offering.

Car
E63 AMG touring.
Piano roof
Air cooled seats
Dynamic seats
Soft close doors
Or just bog standard

Who will raise to be challenge PH this is your quest

[Prinny]

Welshbeef said:

Ok let’s choose a decent PH car and see what the PH massive can find as a “good” pcp/PCH offering.

Car
E63 AMG touring.
Piano roof
Air cooled seats
Dynamic seats
Soft close doors
Or just bog standard

Who will raise to be challenge PH this is your quest

I found a FIATinstead.


That do?

[roadsmash]

Welshbeef said:

Ok let’s choose a decent PH car and see what the PH massive can find as a “good” pcp/PCH offering.

Car
E63 AMG touring.
Piano roof
Air cooled seats
Dynamic seats
Soft close doors
Or just bog standard

Who will raise to be challenge PH this is your quest

Obviously it’s not that simple. The most thought out purchase would involve:

Approaching multiple dealers.

Getting their best price for desired spec, cash vs PCP.

Comparing with leasing price.

Decide if you would plan to keep the car long term or only wish for 2-3 years of fun (ie would you plan on paying any balloon payment or not, and check if leasing would be a better option).

Check depreciation on said model and factor this in to a cash purchase, against leasing costs and again, whether you wish to keep the car long term.

Check insurance and RFL (tax) costs (leasing would include RFL). RFL on an AMG car ain’t cheap.

Factor in a service plan, GAP ins. etc.


.... as you can see there is much more to think about than just comparing a price on the web.

PCP is not for everyone, buying cash is not for everyone, leasing is not everyone.

BUT

People who do 1 of either are NOT idiots, it’s simply just the best option for them given their circumstances and plans for the car.

[Deep Thought]

Welshbeef said:

Ok let’s choose a decent PH car and see what the PH massive can find as a “good” pcp/PCH offering.

Car
E63 AMG touring.
Piano roof
Air cooled seats
Dynamic seats
Soft close doors
Or just bog standard

Who will raise to be challenge PH this is your quest

As has been pointed out, its not that easy with PCP as it will vary based on the discount agreed on the new car, mileage, duration, etc. Also i assume you mean new? If you mean used theres little chance of finding a decent PCP deal.

A cursory look around at Mercedes' website and broadspeed suggests the APR is going to be 5.6% and overall approx £10K discount available. From Mercedes website they're showing a residual value after 4 years of £26,000 which combined with the APR doesnt bode terribly well for a decent PCP offering.

https://www.mercedes-benz.co.uk/passengercars/buy/...

Roughly speaking, with extra discount applied thats probably £5K down and £709 a month for 4 years, making it £39,000 ish. Buy the same car with cash - say £58,000 and resell for the same residual of £26,000 would be a cost of £32,000.

Hardly unsurprising given its a fairly niche car and i dont think Mercedes are having to support it on the market.

[Welshbeef]

Prinny said:

I found a FIATinstead.


That do?

I like that - very cool.

[Gordon_Roslin]

nickfrog said:

Gordon, what if I am spending a grand total of £5,200 including road tax for 2 years for a car that will depreciate more than £6k+ in that time ? Is that acceptable to you or is that "typical" millenial behaviour ? Would you have preferred that I spend £20k instead to trigger the £6k depreciation and miss out on HMRC's 40% uplift for pension contribution relief ? I am not expecting an answer from you.

Edited by nickfrog on Monday 4th February 22:22

Mr N Frog, what exactly is your question? Cars cost money, the idea is to minimise that, unless you love your car so much that cost doesn't matter - in neither instance is PCP usually the best option. If you've managed to find one or two deals that are pretty good for PCP then yayyyyyyy I couldn't be more happy for you, it doesn't make PCP the best choice for most people. I don't understand your preposterous notion that a financial product designed to put handbags on the table of the finance manager's wife is somehow an amazing idea, because you might be able to find a small fraction of deals that are actually good within it.

If you wandered around the Sarengetti naked with steak strapped to your todger there's 'a chance' that you wouldn't be attacked by wilderbeest, doesn't make it a particularly good strategy does it?

Lastly, how dare you with your absurd assumption that I wouldn't answer, because you've somehow outfoxed me with some silly pontification about pension uplifts. Go to your local dealership and see how many goons forking out for PCPs are debating how it will affect their pension uplift.

People who PCP have made a bad mistake, almost invariably. They need to cope with that fact rather than coming on the internet to have a boring argument attempting to 'win' the debate about the £400 a month they are paying to borrow a BMW 3 series.

[Gordon_Roslin]

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Good example of another 'genius PCPer' here. 'I didn't read what I was signing - does my payment include the balloon or not' ...

[Deep Thought]

Gordon_Roslin said:

People who PCP have made a bad mistake, almost invariably.

How have people who PCP almost invariably made a mistake? Even IF they only got an "ok" deal, then hows that a mistake? They've got the car for the period they want, they are happy with the payments, they generally can afford them. What makes that a "mistake"?

I'm sure for every car or TV or phone or house you've ever bought, theres other people who got the same items or better ones for less. Does that make all those purchases you made a "mistake"? Or in the grand scheme of things were you happy with the things you got for the perhaps rather average price you got them at?

Gordon_Roslin said:

They need to cope with that fact rather than coming on the internet to have a boring argument attempting to 'win' the debate about the £400 a month they are paying to borrow a BMW 3 series.

Or maybe they dont actually have a car on PCP but can be objective about buying options?

[Deep Thought]

Gordon_Roslin said:

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Good example of another 'genius PCPer' here. 'I didn't read what I was signing - does my payment include the balloon or not' ...

Yeah he got a crap deal because he didnt read what he was signing or do his homework on the cost.

Is that not the same with anything in life?

[bad company]

Gordon_Roslin said:

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Good example of another 'genius PCPer' here. 'I didn't read what I was signing - does my payment include the balloon or not' ...

And your point is?

[Gordon_Roslin]

Deep Thought said:

Yeah he got a crap deal because he didnt read what he was signing or do his homework on the cost.

Is that not the same with anything in life?

Have you ever heard of a distribution curve? Most people sit in the middle, by definition ... which in this case means people getting guffy PCP deals. Then occasionally you will get some people at one end, who manage, through luck or judgment, to get a great deal. Mr N Frog seems to think that this small percentage of people necessitate erecting churches to the notion of PCP - I assume he probably has the words PCP tattooed somewhere on his person.

Then at the other end, you get people who don't even bother reading the paperwork, or are too dumb to know what they've signed up to - and many people go over the top in criticising PCP for these morons.

My point is that MOST people sit in the middle of this curve, i.e. paying over the odds compared to getting a 2 or 3 year old used car that they wouldn't even be able to tell wasn't new if they weren't told. they could bank that money and do something with it that isn't having it in an asset that's sat on the drive or in a car park 95% of the time. That's my point.

Do you even know what you're evangelising?

[Deep Thought]

Gordon_Roslin said:

Deep Thought said:

Yeah he got a crap deal because he didnt read what he was signing or do his homework on the cost.

Is that not the same with anything in life?

Have you ever heard of a distribution curve? Most people sit in the middle, by definition ... which in this case means people getting guffy PCP deals. Then occasionally you will get some people at one end, who manage, through luck or judgment, to get a great deal. Mr N Frog seems to think that this small percentage of people necessitate erecting churches to the notion of PCP - I assume he probably has the words PCP tattooed somewhere on his person.

Then at the other end, you get people who don't even bother reading the paperwork, or are too dumb to know what they've signed up to - and many people go over the top in criticising PCP for these morons.

My point is that MOST people sit in the middle of this curve, i.e. paying over the odds compared to getting a 2 or 3 year old used car that they wouldn't even be able to tell wasn't new if they weren't told. they could bank that money and do something with it that isn't having it in an asset that's sat on the drive or in a car park 95% of the time. That's my point.

Do you even know what you're evangelising?

That guys deal was clearly at the far end of the curve not at the middle of it.

The bulk of people pay a reasonable amount for a reasonable car and are happy with it.

I still don't get why you get so angry about it?

It's very hard not the think that you're one of those people with a chip on their shoulder about other people not saving up and therefore don't deserve a nice or new car....

Edited by Deep Thought on Tuesday 5th February 22:26

[bad company]

Gordon_Roslin said:

Have you ever heard of a distribution curve? Most people sit in the middle, by definition ... which in this case means people getting guffy PCP deals. Then occasionally you will get some people at one end, who manage, through luck or judgment, to get a great deal. Mr N Frog seems to think that this small percentage of people necessitate erecting churches to the notion of PCP - I assume he probably has the words PCP tattooed somewhere on his person.

Then at the other end, you get people who don't even bother reading the paperwork, or are too dumb to know what they've signed up to - and many people go over the top in criticising PCP for these morons.

My point is that MOST people sit in the middle of this curve, i.e. paying over the odds compared to getting a 2 or 3 year old used car that they wouldn't even be able to tell wasn't new if they weren't told. they could bank that money and do something with it that isn't having it in an asset that's sat on the drive or in a car park 95% of the time. That's my point.

Do you even know what you're evangelising?

There’s some truth in that but surely the same applies to:-

mobile phone contracts
Sky tv deals
Renting a house/flat
Fuel deals
Mortgages
Life insurance
Buying a pension

Life in fact. You need to look carefully at what you’re buying.