Will Corona effect the Supercar Market
Discussion
ghost83 said:
Drl22 said:
I think you’ve been reading too much daily mail.
Don’t you think restrictions will get tougher?21ATS said:
I employ a guy in China (my business imports 90% of it's product from China).
I was asking him how things are over there. He's in Guangzhou, about 100 miles or so north of Hong Kong. This is his response today:-
The virus is very terrible, China may face the second outbreak, many people do not believe in the number of the virus case here, we have stocked food for half to two years, because there is a high chance of another lockdown for more cities.
This is the problem. Never mind how long this takes to get back to "normal". When does normal start? When we've eradicated every episode of this virus?
We can't risk life returning back to normality until there is an effective vaccine for this problem. That genuinely could be 12-24 months away.
Anyone thinking this is going to be over in three months is delsional, the rest of the year at the minimum IMO.
Spot on 21ATS. I think a business owner such as yourself would appreciate the following article and also the sub article referenced, written by Henry Kissinger recently. Godspeed I was asking him how things are over there. He's in Guangzhou, about 100 miles or so north of Hong Kong. This is his response today:-
The virus is very terrible, China may face the second outbreak, many people do not believe in the number of the virus case here, we have stocked food for half to two years, because there is a high chance of another lockdown for more cities.
This is the problem. Never mind how long this takes to get back to "normal". When does normal start? When we've eradicated every episode of this virus?
We can't risk life returning back to normality until there is an effective vaccine for this problem. That genuinely could be 12-24 months away.
Anyone thinking this is going to be over in three months is delsional, the rest of the year at the minimum IMO.
Edited by 21ATS on Tuesday 7th April 13:54
https://www.icis.com/chemicals-and-the-economy/202...
Edited by TheAnimal on Tuesday 7th April 22:43
21ATS said:
It depends on the terms of their agreement and exactly what type of agreement they took out originally.
Voluntary termination explained here:- https://www.thecarexpert.co.uk/car-finance-volunta...
It's at this point that a number of people driving very expensive cars discover they have neither a PCP or HP agreement and can't simply hand the keys back, they have to sell, or buy out the agreement.
I think (don't quote me on this) many of the big number agreements are "Lease Purchase" which is a whole different kettle of fish. I'm pretty sure this is what I was quoted by Ferrari Financial services when I was looking to buy something two years ago.
This is a very important point I don’t think many will have picked up on.Voluntary termination explained here:- https://www.thecarexpert.co.uk/car-finance-volunta...
It's at this point that a number of people driving very expensive cars discover they have neither a PCP or HP agreement and can't simply hand the keys back, they have to sell, or buy out the agreement.
I think (don't quote me on this) many of the big number agreements are "Lease Purchase" which is a whole different kettle of fish. I'm pretty sure this is what I was quoted by Ferrari Financial services when I was looking to buy something two years ago.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
LaurasOtherHalf said:
This is a very important point I don’t think many will have picked up on.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
Never done lease purchase so don’t know much about it, why will it get some in serious trouble?The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
ghost83 said:
LaurasOtherHalf said:
This is a very important point I don’t think many will have picked up on.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
Never done lease purchase so don’t know much about it, why will it get some in serious trouble?The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
You cannot simply keep paying your monthlies until the end of the deal and hand the car back, you need to pay that balloon off by hook or by crook.
I looked at financing a couple of cars in ‘18 & ‘19 and all the usual suspects were touting this as the latest and greatest way of cheaply owning a high end car.
In fact, one company attempted to sign me up to one such deal whilst calling it a pcp. It got to the point of collecting the car whilst I read the agreement for me to find out but that’s a whole other story.
There will be a whole load of oracle finance customers who don’t have the option of handing back their cars at the end of the deal.
LaurasOtherHalf said:
It’s been a move to greatly reduce the monthly payments, the snag being your balloon payment at the end is not optional.
You cannot simply keep paying your monthlies until the end of the deal and hand the car back, you need to pay that balloon off by hook or by crook.
I looked at financing a couple of cars in ‘18 & ‘19 and all the usual suspects were touting this as the latest and greatest way of cheaply owning a high end car.
In fact, one company attempted to sign me up to one such deal whilst calling it a pcp. It got to the point of collecting the car whilst I read the agreement for me to find out but that’s a whole other story.
There will be a whole load of oracle finance customers who don’t have the option of handing back their cars at the end of the deal.
And with values likely to fall through the roof they’re going to have a car that’s worth a lot less than what they owe and they can’t use a pcp balloon to get out of the negative equity! Ouch! I’m guessing though a lot will have put them through limited companies and will wind the company up so the car just gets repossessed You cannot simply keep paying your monthlies until the end of the deal and hand the car back, you need to pay that balloon off by hook or by crook.
I looked at financing a couple of cars in ‘18 & ‘19 and all the usual suspects were touting this as the latest and greatest way of cheaply owning a high end car.
In fact, one company attempted to sign me up to one such deal whilst calling it a pcp. It got to the point of collecting the car whilst I read the agreement for me to find out but that’s a whole other story.
There will be a whole load of oracle finance customers who don’t have the option of handing back their cars at the end of the deal.
ghost83 said:
And with values likely to fall through the roof they’re going to have a car that’s worth a lot less than what they owe and they can’t use a pcp balloon to get out of the negative equity! Ouch! I’m guessing though a lot will have put them through limited companies and will wind the company up so the car just gets repossessed
Exactly, it's why I mentioned it originally but as pointed out buy Laura's OH it's flown over a few heads.It's the kind of product that allowed for overly inflated deferred payments on the assumption the car wasn't going to depreciate on a normal curve, so when the agreement came to an end or the YouTuber decided to move it on, they'd sell or part ex and the retained value in the car would theortically clear the outstanding. So it basically cost the deposit and the monthlies. That was of course before the world got a nasty wake up call.
Exit options are very limited. If you find yourself underwater you can't just bail like a PCP arrangement and hand the keys back. You're on the hook for the negative equity and you will be pursued.
TheAnimal said:
Spot on 21ATS. I think a business owner such as yourself would appreciate the following article and also the sub article referenced, written by Henry Kissinger recently. Godspeed
https://www.icis.com/chemicals-and-the-economy/202...
Interesting article, it pretty much sums up how I feel it's going to unfold. You can see the denial even on this thread.https://www.icis.com/chemicals-and-the-economy/202...
Edited by TheAnimal on Tuesday 7th April 22:43
We are witnessing a once in a century event unfold in front of us. I see no circumstances under which any businesses in hospitality or service will be able to operate normally until next year. Just think how many businesses, industries and employees that directly effects.
The government has taken unprecedented action with a financial package that demonstrates how serious a situation we're in.
Am I worried? No. Not because I'm comfortably sitting on a pile of cash and I'll be unaffected. I'm not worried because worrying is not going to help or change anything.
I'm resigned to the inevitable, much like a bather on a beach standing facing the ocean and watching a 20 meter Tsunami roll in straight at me at 30 - 40 mph. I know it's going to hit me and there's nothing I can do about it other than brace myself and hope.
LaurasOtherHalf said:
ghost83 said:
LaurasOtherHalf said:
This is a very important point I don’t think many will have picked up on.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
Never done lease purchase so don’t know much about it, why will it get some in serious trouble?The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
You cannot simply keep paying your monthlies until the end of the deal and hand the car back, you need to pay that balloon off by hook or by crook.
I looked at financing a couple of cars in ‘18 & ‘19 and all the usual suspects were touting this as the latest and greatest way of cheaply owning a high end car.
In fact, one company attempted to sign me up to one such deal whilst calling it a pcp. It got to the point of collecting the car whilst I read the agreement for me to find out but that’s a whole other story.
There will be a whole load of oracle finance customers who don’t have the option of handing back their cars at the end of the deal.
The old interest only method sort of worked as house prices rose and if you wanted out you could sell the house to clear the outstanding balance and pocket the capital appreciation (and have nowhere to live). Or if the house is worth less at the end, sell the house to partially clear the outstanding balance, have nowhere to live and be on the hook for the shortfall.
Fezzaman said:
LaurasOtherHalf said:
ghost83 said:
LaurasOtherHalf said:
This is a very important point I don’t think many will have picked up on.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
Never done lease purchase so don’t know much about it, why will it get some in serious trouble?The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
You cannot simply keep paying your monthlies until the end of the deal and hand the car back, you need to pay that balloon off by hook or by crook.
I looked at financing a couple of cars in ‘18 & ‘19 and all the usual suspects were touting this as the latest and greatest way of cheaply owning a high end car.
In fact, one company attempted to sign me up to one such deal whilst calling it a pcp. It got to the point of collecting the car whilst I read the agreement for me to find out but that’s a whole other story.
There will be a whole load of oracle finance customers who don’t have the option of handing back their cars at the end of the deal.
The old interest only method sort of worked as house prices rose and if you wanted out you could sell the house to clear the outstanding balance and pocket the capital appreciation (and have nowhere to live). Or if the house is worth less at the end, sell the house to partially clear the outstanding balance, have nowhere to live and be on the hook for the shortfall.
It sounded to me like the next big scandal as the two times I was pushed towards it, one was by deception (a 911) and the other (a FFRR) it was stacked to “beat any main dealer quote” by oracle finance.
And they could, the monthlies were miles cheaper and the initial deposit smaller-looks great if you want a flash car in the drive.
They could also push the product onto older cars (the 911 i was looking at was a 2010) which would be impossible on a PCP deal where age limits of vehicle apply.
It seemed to me like they’d found a way of sneaking this deal into people’s consciousness by way of everyone being totally blasé about buying a car in monthlies.
This looks the same apart from one tiny difference. That compulsory ballon payment.
If people are buying these older cars on a “PCP” I can just about guarantee it isn’t. Traditional repayment loan maybe, cash purchase maybe but PCP with balloon on a 5 year old Supercar, forget it. It will be a lease purchase.
When the times were good you could argue it made sense, “that GT3 will never loose money sir, I guarantee we’ll buy it back off you when you want to change, it’ll probably be worth more than what you’re paying now”.
Trouble is, the safety net of handing the car back doesn’t exist-exactly the reason I walked away from both deals.
LaurasOtherHalf said:
ghost83 said:
LaurasOtherHalf said:
This is a very important point I don’t think many will have picked up on.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
Never done lease purchase so don’t know much about it, why will it get some in serious trouble?The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
You cannot simply keep paying your monthlies until the end of the deal and hand the car back, you need to pay that balloon off by hook or by crook.
I looked at financing a couple of cars in ‘18 & ‘19 and all the usual suspects were touting this as the latest and greatest way of cheaply owning a high end car.
In fact, one company attempted to sign me up to one such deal whilst calling it a pcp. It got to the point of collecting the car whilst I read the agreement for me to find out but that’s a whole other story.
There will be a whole load of oracle finance customers who don’t have the option of handing back their cars at the end of the deal.
20% down, 3.9% pa for 3 years, final payment of c 60% of new price from memory
Edit: I meant 60% of purchase price as it was a used car
Edited by MDL111 on Wednesday 8th April 11:11
hunter 66 said:
If this continues for 6-12 months , I am keeping my RS and I can at least trade it in for a loaf of Bread ......the only thing worth buying will be a gun as we see in the US ..
YOUR BE LUCKY ACCORDING TO ALL THESE BORING DOOM AND GLOOM THREADS YOU WILL HAVE TO GIVE THEM MONEY AND YOUR RS , I'VE JUST BEEN GIVEN A LOAF OF BREAD BY MY LOCAL SHOP AS IT IS OUT OF DATE AND THE ONLY ONE LEFT ON THE SELF, IF YOU DELIVER THE RS I MIGHT CONSIDER A STRAIGHT SWAP BUT DON'T THINK ABOUT IT TO LONG AS I MIGHT CHANGE MY MIND, rat rod said:
YOUR BE LUCKY ACCORDING TO ALL THESE BORING DOOM AND GLOOM THREADS YOU WILL HAVE TO GIVE THEM MONEY AND YOUR RS , I'VE JUST BEEN GIVEN A LOAF OF BREAD BY MY LOCAL SHOP AS IT IS OUT OF DATE AND THE ONLY ONE LEFT ON THE SELF, IF YOU DELIVER THE RS I MIGHT CONSIDER A STRAIGHT SWAP BUT DON'T THINK ABOUT IT TO LONG AS I MIGHT CHANGE MY MIND,
Maybe take caps lock off? Considering it's your 3rd post in this thread in capitals, I assume you're trying to make a point. https://www.pistonheads.com/gassing/topic.asp?h=0&...
Looks like Ferrari Financial Services are jumping on the Lease Purchase bandwagon. Understandably, predicting future values could be a tad difficult, a doubt this will jump start the market in their favour however.
Are those who've jumped on the recent bargain basement PCP deals from the likes of McLaren and Aston the last owners of the "cheap" supercar?
Looks like Ferrari Financial Services are jumping on the Lease Purchase bandwagon. Understandably, predicting future values could be a tad difficult, a doubt this will jump start the market in their favour however.
Are those who've jumped on the recent bargain basement PCP deals from the likes of McLaren and Aston the last owners of the "cheap" supercar?
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