Anyone know the background behind the Times story?
Discussion
This story is another example of how huge this used car market bobble really is. This market has been fuelled by low interest rates and as buyers have been attracted by low monthly payments rather than final costs/exposure, manufacturers have been increasing prices as nobody paid attention the the actual costs of the car. With these stories we are now seeing how a market is unravelling fast as very few can actually afford a £160k car (even secondhand).
Just read the original article (takes days to read the Sunday Times!).
Sorry, no sympathy.
I also had a longing desire to own a “nice car”. Never thought one day I’d drive a Vantage off an AM forecourt. But three things allowed this to happen:
1. I did my homework over years
2. I saved for even more years
3. I bought a 3 year old AM, allowing some other brave sole to take most of the financial hit
Yep - would have loved to have spec’d one from new. But knowing it’s 100% makes me feel even better.
As for dipping into a pension plan to kickstart the dream...
Do yer sums and read the contract before you sign anything! Not rocket science.
Sorry, no sympathy.
I also had a longing desire to own a “nice car”. Never thought one day I’d drive a Vantage off an AM forecourt. But three things allowed this to happen:
1. I did my homework over years
2. I saved for even more years
3. I bought a 3 year old AM, allowing some other brave sole to take most of the financial hit
Yep - would have loved to have spec’d one from new. But knowing it’s 100% makes me feel even better.
As for dipping into a pension plan to kickstart the dream...
Do yer sums and read the contract before you sign anything! Not rocket science.
hornbaek said:
This story is another example of how huge this used car market bobble really is. This market has been fuelled by low interest rates and as buyers have been attracted by low monthly payments rather than final costs/exposure, manufacturers have been increasing prices as nobody paid attention the the actual costs of the car. With these stories we are now seeing how a market is unravelling fast as very few can actually afford a £160k car (even secondhand).
That is indeed the problemThere are no issues in general terms with taking out finance, providing you put a chunky sum down, pay a reasonable amount each month and aren't taking on finance to buy a car for 'investment' purposes
In fact, when interest rates are so low as they are now, it makes sense (particularly for any form of finance other than the one in question in this post which has a variable rate)
But as I see it, you should look at the purchase price of the car and the finance you use to buy it as two almost unrelated issues, in that order. You decide whether the car is worth the asking price, look at how long you might keep it for, then work out if you can afford it using finance options available at the time providing you're putting a decent chunk down first
Alternatively, take out PCP where the finance company carries the risk of future value (a market which is surely about to see it's arse with fincos misjudging future values)
This particular case is the worse of all worlds, for the reasons I and others have already said. Low deposit, using pension for the deposit, short term agreement (2 years - one imagines depreciation in year 3 would be far less), low monthlies, huge balloon, unregulated agreement, etc. On top of that, he's barely used the thing !
Wow what a s
tshow Id even argue that buying a £170k car when earning £150k is pretty silly in itself never mind not reading or understanding the contract properly! I really don’t think anyone shelves out cold hard cash at that price level anymore so car firms have pushed up the list prices as all that matters is the monthly cost ...even a new M5 is £100k nowadays ! Still it’s nice to step in and buy something like this at half price after 3 yrs which is exactly what I did with my V12VS.
tshow Id even argue that buying a £170k car when earning £150k is pretty silly in itself never mind not reading or understanding the contract properly! I really don’t think anyone shelves out cold hard cash at that price level anymore so car firms have pushed up the list prices as all that matters is the monthly cost ...even a new M5 is £100k nowadays ! Still it’s nice to step in and buy something like this at half price after 3 yrs which is exactly what I did with my V12VS.UK 12 months to March 2016 _ 82.7% of new private cars were obtained using finance.
UK 12 months to March 2017 _ 86.5%.
https://uk.reuters.com/article/uk-britain-economy-...
I cannot believe that Valkyrie type buyers will use finance, but maybe I am wrong.
Over borrowing by countries, businesses and people has led to economic trouble many times in the past, but perhaps that famous saying will help us, 'it is different this time'.
I completely agree with the comments about finance allowing manufacturers to inflate retail prices. You can even search AT using monthlies instead of asking prices ffs. A few years ago I got really sick of salesmen asking 'what's your monthly budget?' when I enquired about a car purchase, instead of discussing the price and the part ex value.
Anyways....
On the subject of uber expensive cars and finance I have been told two stories this year about rather expensive purchases (by an AM dealer, so much for discretion). One was a DBSS where the buyer traded in their car as deposit and then had the DBSS on less than £500 pcm for a couple of years (now that really is equity erosion). And another regarding a Zagato SB that was financed in a similar way 'for the summer' only covering the interest costs.
Anyways....
On the subject of uber expensive cars and finance I have been told two stories this year about rather expensive purchases (by an AM dealer, so much for discretion). One was a DBSS where the buyer traded in their car as deposit and then had the DBSS on less than £500 pcm for a couple of years (now that really is equity erosion). And another regarding a Zagato SB that was financed in a similar way 'for the summer' only covering the interest costs.
soofsayer said:
I completely agree with the comments about finance allowing manufacturers to inflate retail prices. You can even search AT using monthlies instead of asking prices ffs. A few years ago I got really sick of salesmen asking 'what's your monthly budget?' when I enquired about a car purchase, instead of discussing the price and the part ex value.
.
Simple solution is to ignore the price list and focus on the transaction price. With my last 3 new cars the dealer was quite happy that I pay cash and offered discounts accordingly, although leverage from the brokers helped too. .
nickfrog said:
Simple solution is to ignore the price list and focus on the transaction price. With my last 3 new cars the dealer was quite happy that I pay cash and offered discounts accordingly, although leverage from the brokers helped too.
Surprised to see mention of cash discounts. I thought those days had gone, because dealers receive commission to sell finance schemes, so financially they presumably must dislike cash buyers. It has also recently been mentioned in a report about car finance, that if dealers can obtain a higher interest rate, they receive an even higher commission.
Depreciation is of course the biggest cost for most car users. Looking at your list of past and present cars, I am fairly confident that my car ownership must in total have cost me considerably less than you. Funny that, because this forum gives you a clue about one of the cars in my garage. My philosophy is never buy new, pay cash, don't buy very often, and keep most of the cars. DD at present is a pristine 20 year old MB coupe, purchased at 3 years old. I am told that it should still be capable of 150 mph, but not allowed in UK. Can use the power for acceleration, but not for speeds above limits.
Jon39 said:
Surprised to see mention of cash discounts. I thought those days had gone, because dealers receive commission to sell finance schemes, so financially they presumably must dislike cash buyers. It has also recently been mentioned in a report about car finance, that if dealers can obtain a higher interest rate, they receive an even higher commission.
Jon39 said:
Depreciation is of course the biggest cost for most car users. Looking at your list of past and present cars, I am fairly confident that my car ownership must in total have cost me considerably less than you. Funny that, because this forum gives you a clue about one of the cars in my garage. My philosophy is never buy new, pay cash, don't buy very often, and keep most of the cars. DD at present is a pristine 20 year old MB coupe, purchased at 3 years old. I am told that it should still be capable of 150 mph, but not allowed in UK. Can use the power for acceleration, but not for speeds above limits.
Loads of topics there Jon. I am certainly not trying to save money with my cars that's for sure. I track most of them so new works really well for me, 150mph can be perfectly legal in the UK although not many circuit have long enough straights . I don't like second hand cars generally but each to their own. nickfrog said:
Loads of topics there Jon. I am certainly not trying to save money with my cars that's for sure. I track most of them so new works really well for me, 150mph can be perfectly legal in the UK although not many circuit have long enough straights . I don't like second hand cars generally but each to their own.
You have a good way to enjoy your cars. Have you considered club racing or speed hillclimbing, to introduce a competitive buzz to your track driving ? I used to race many moons ago, but lost heart after too many engine rebuilds. Still have the car though, a 1960s Cooper S.
Aston Martin have use of the MIRA track for their customers. It includes a 1 mile straight. From standstill you can reach 170mph before needing brake. Interestingly, when repeating the run, but this time using only 5th gear, you can still achieve 160mph. The engines have tremendous torque.
Sorry - off topic, but we must have almost completed the subject.
Agent57 said:
So it seems the more people earn, the more they can afford to borrow.
I only borrowed to buy cars when I was young and couldn't afford to pay in cash.
I would never borrow money to buy a luxury item. But maybe that's just me.
I sympathise with your view.I only borrowed to buy cars when I was young and couldn't afford to pay in cash.
I would never borrow money to buy a luxury item. But maybe that's just me.
However, the ability to get credit has always been linked to your ability to pay it back, so your first statement is kind of a given.
This case is all about folk not understanding (or wishing not to understand) that an asset has a price when you purchase it and can/will depreciate over time and indeed appreciate again after a certain number of years too.
I fear this case we are discussing is all about someone considering the monthly payments rather than the asset he is purchasing. If I were his boss I would sack him on the spot.
Jon39 said:
UK 12 months to March 2016 _ 82.7% of new private cars were obtained using finance.
UK 12 months to March 2017 _ 86.5%.
https://uk.reuters.com/article/uk-britain-economy-...
I have come across a statement made by AML in 2017.
'The majority of our customers buy from our dealers in cash'.
Also interesting comments about the secondary market pricing.
Jon39 said:
Jon, we both know that that is all talk as they clearly don't practice what they preach. Even managed to oversupply with the recent Vanquish Zagatos. I suspect I'm right in saying that the last time there was a real waiting list was the 2005 launch of the Vantage. No?Gassing Station | Aston Martin | Top of Page | What's New | My Stuff