New Car Advice

[thebigfella]

who regulates these PCP products though?

not the Central Bank!!
In fact, nobody!

its a disaster waiting to happen

THey would have to have a banking license - which means they are regulated.

[thebigfella]

PCP is the next big credit bubble car crash, a vanity product for people thinking they need new big cars which they actually cant afford

If they can make the payments, then they can afford. If you don't want to keep the car or can't afford too at the end, then ultimately you hand back.

The post ultimately strikes of begrudgery.

far from begrudgery, just a caustic eye on credit bubbles over a lifetime.............if it walks like a duck and quacks like a duck then its a f**king duck in my book. PCP is a credit crash world wide waiting to happen

When you called it a vanity product for people thinking they need new big cars - you come across as a knob and a begrudger.

What car people drive is irrelevant to the arguments on PCP for financing. If someone wants to buy a car through PCP, then it's their business - if they can afford the repayments then ultimately they can afford it.

[thebigfella]

PCP is the next big credit bubble car crash, a vanity product for people thinking they need new big cars which they actually cant afford

If they can make the payments, then they can afford. If you don't want to keep the car or can't afford too at the end, then ultimately you hand back.

The post ultimately strikes of begrudgery.

far from begrudgery, just a caustic eye on credit bubbles over a lifetime.............if it walks like a duck and quacks like a duck then its a f**king duck in my book. PCP is a credit crash world wide waiting to happen

Was listening to a fella on the radio who reckoned it's a bubble alright but not likely to affect the users hugely (any individual will be in hoc for a relatively low sum) but could have a huge effect on car dealerships who might be in too deep on these if a lot of people were to default. Anyone know how the details of how dealerships finance these?

Ther dealerships are a separate entity to the financing company - BMW dealers for example make the application to BMW Finance on your behalf. The dealer "should" still get their cash irrespective of whether you default or not.

[thebigfella]

Looked at PCP but wasn't going to work for us. We have 2 cars, we always buy a car and pay it off over 3 years or so, then change the other one and do the same again. If we take out a PCP on a new car, then what do you do when you need to change the other car. It would mean paying 2 PCP deals at the one time. The guts of £500 a month on cars and you don't own them ffs.

Why wouldn't you run the PCP for 3 years and pay off the remaining before doing a PCP deal on the 2nd car? Would it not ultimately be the same as paying a loan back over 3 years anyway?

What do you mean pay off the remaining? As in a lump on what's left on the pcp car?

PCP deals basically require you to make a set number of payments (usually at a lower amount than if you were paying back the full amount borrowed) and at the end you have a few options:
- pay the remaining amount of the loan and keep the car
- hand it back and "hopefully" the guaranteed value covers the remainer of the finance
- trade it in and use the trade in to cover the remainder of the finance (bit simplistic but this is what the dealers want)

So if you got a 0% PCP deal for 10k over 3 years - why would you not pay the PCP for 3 years and put aside the remaining money (you would be paying with a loan) every month to make the lump payment at the end of the 3 years?

With a 10k loan you won't get a 0% rate, so it may make sense to do the above.

Also be aware dealer discounts are heavily subsidised by the (separate) finance company. So you may not get as good a discount as you would with taking it out as it is on top of the max a dealer and can salesman can offer. You can take out PCP and avail of the discounts but pay off the moment you leave the dealer with zero interest. I do it all the time as you could be talking anything up to 10k subsidised by the Financing Company (these are usually entities within the manufacturer).

It's not just a simple PCP is bad argument. There are deals to be had by playing the game.   

[Orchard park]

PCP is the next big credit bubble car crash, a vanity product for people thinking they need new big cars which they actually cant afford

If they can make the payments, then they can afford. If you don't want to keep the car or can't afford too at the end, then ultimately you hand back.

The post ultimately strikes of begrudgery.

far from begrudgery, just a caustic eye on credit bubbles over a lifetime.............if it walks like a duck and quacks like a duck then its a f**king duck in my book. PCP is a credit crash world wide waiting to happen

When you called it a vanity product for people thinking they need new big cars - you come across as a knob and a begrudger.

What car people drive is irrelevant to the arguments on PCP for financing. If someone wants to buy a car through PCP, then it's their business - if they can afford the repayments then ultimately they can afford it.

when a generation can only tell you how much a month their car costs facilitated by PCP schemes most don't understand,  then there is a serious societal issue. People in the 20s and early 30s going for brand new fancier BMWs or audis because its only 100 a month extra trype mindset.

so less of the knob abuse whoever you are.

presumably a BMW driving PCP holding "consumer"

[magpie seanie]

PCP is the next big credit bubble car crash, a vanity product for people thinking they need new big cars which they actually cant afford

If they can make the payments, then they can afford. If you don't want to keep the car or can't afford too at the end, then ultimately you hand back.

The post ultimately strikes of begrudgery.

far from begrudgery, just a caustic eye on credit bubbles over a lifetime.............if it walks like a duck and quacks like a duck then its a f**king duck in my book. PCP is a credit crash world wide waiting to happen

When you called it a vanity product for people thinking they need new big cars - you come across as a knob and a begrudger.

What car people drive is irrelevant to the arguments on PCP for financing. If someone wants to buy a car through PCP, then it's their business - if they can afford the repayments then ultimately they can afford it.

That worked well in the property crash!!! Making high repayments impacts other areas of the economy.

The criticism of PCP made by Orchard Park and manfromdelmonte is largely correct in my view. It's a short term quick fix for car dealers which is now their core business I'd guess. It has in my view allowed people to get new cars they can't really afford. It's expensive for the customer and while I understand it does away with some hassle I think it's a rip off. It's not begrudgery to say that as personally I really couldn't care less what the next person drives - good luck to them. What does bother me though is if/when this crashes I'm going to end of paying for it somehow. And lets be realistic - there is a certain degree of vanity involved in it for a lot of people. That's grand but let them and the motor industry who are creaming it off these deals, pay for it.

[Orchard park]

likewise Magpie I couldnt care less what any individual drives or leases / PCPs / owns. Its the overall societal impact that quick fix creative financial "products" have caused in the recent past and that this one again threatens........

every can drive a ferrari if they want once i don't end up footing a levy or bill for 10 years when it goes tits up

[theskull1]

I totally agree. Its a price people many are willing to pay for instant bling in the driveway.

[north_antrim_hound]

PCP is the next big credit bubble car crash, a vanity product for people thinking they need new big cars which they actually cant afford

If they can make the payments, then they can afford. If you don't want to keep the car or can't afford too at the end, then ultimately you hand back.

The post ultimately strikes of begrudgery.

far from begrudgery, just a caustic eye on credit bubbles over a lifetime.............if it walks like a duck and quacks like a duck then its a f**king duck in my book. PCP is a credit crash world wide waiting to happen

When you called it a vanity product for people thinking they need new big cars - you come across as a knob and a begrudger.

What car people drive is irrelevant to the arguments on PCP for financing. If someone wants to buy a car through PCP, then it's their business - if they can afford the repayments then ultimately they can afford it.

That worked well in the property crash!!! Making high repayments impacts other areas of the economy.

The criticism of PCP made by Orchard Park and manfromdelmonte is largely correct in my view. It's a short term quick fix for car dealers which is now their core business I'd guess. It has in my view allowed people to get new cars they can't really afford. It's expensive for the customer and while I understand it does away with some hassle I think it's a rip off. It's not begrudgery to say that as personally I really couldn't care less what the next person drives - good luck to them. What does bother me though is if/when this crashes I'm going to end of paying for it somehow. And lets be realistic - there is a certain degree of vanity involved in it for a lot of people. That's grand but let them and the motor industry who are creaming it off these deals, pay for it.

PCP and it's percentage of turnover is dictated by the area of the dealership. I know a guy in west Belfast and 80% of his new sales is mobility cars and the rest PCP.
People paying cash for new cars now are very rare when you consider company leases are 100% tax deductible.

[Maroon Manc]

Leasing is becoming huge over here, only difference to PCP is there's no option of a balloon payment at the end.

I'm nearly 2 years through my first lease with another year to go, not looking forward to handing it back and finding out what they class as wear and tear.

I'd imagine new car sales would be shocking without people leasing over here, anyone I know who's leased would never have bought a new car. Surely this is going to have some knock on affect with second hand cars?

[thebigfella]

PCP is the next big credit bubble car crash, a vanity product for people thinking they need new big cars which they actually cant afford

If they can make the payments, then they can afford. If you don't want to keep the car or can't afford too at the end, then ultimately you hand back.

The post ultimately strikes of begrudgery.

far from begrudgery, just a caustic eye on credit bubbles over a lifetime.............if it walks like a duck and quacks like a duck then its a f**king duck in my book. PCP is a credit crash world wide waiting to happen

When you called it a vanity product for people thinking they need new big cars - you come across as a knob and a begrudger.

What car people drive is irrelevant to the arguments on PCP for financing. If someone wants to buy a car through PCP, then it's their business - if they can afford the repayments then ultimately they can afford it.

That worked well in the property crash!!! Making high repayments impacts other areas of the economy.

The criticism of PCP made by Orchard Park and manfromdelmonte is largely correct in my view. It's a short term quick fix for car dealers which is now their core business I'd guess. It has in my view allowed people to get new cars they can't really afford. It's expensive for the customer and while I understand it does away with some hassle I think it's a rip off. It's not begrudgery to say that as personally I really couldn't care less what the next person drives - good luck to them. What does bother me though is if/when this crashes I'm going to end of paying for it somehow. And lets be realistic - there is a certain degree of vanity involved in it for a lot of people. That's grand but let them and the motor industry who are creaming it off these deals, pay for it.

PCP is not comparable to the property crash. Cars are depreciating assets, the whole property bubble was based on the premise that property prices will continue to rise. The exposure risk is much lower and the financing companies are separate legal entities which would be allowed to crash (as they don't offer other banking services).

PCP may not be the cheapest way to buy a car but whether a person can or cannot afford something is subjective. Ultimately Mortgages allow you to buy a property you can't really afford otherwise - irrespective of the controls in place. Sure we all used to rent TVs that we couldn't afford. Finance products evolve - we used to have the exact same arguements about the lads who took out credit union loans to buy their Nova.

Nothing Orchard Park has said have given any indication of why these products are bad. His opening gambit attacked the people availing of them as vain and financially reckless.

On societal issues - maybe look at the bigger economic picture too than taking the ants penis view and focusing the consumers availing of the product.

[Orchard park]

I didn't attack the people

I attacked the product that preys on people who dont look deeper than how much per month.

Obviously you are earning commission from PCP as i have never seen someone so touchy on what is a potential economy hand grenade

[JohnDenver]

Looked at PCP but wasn't going to work for us. We have 2 cars, we always buy a car and pay it off over 3 years or so, then change the other one and do the same again. If we take out a PCP on a new car, then what do you do when you need to change the other car. It would mean paying 2 PCP deals at the one time. The guts of £500 a month on cars and you don't own them ffs.

Why wouldn't you run the PCP for 3 years and pay off the remaining before doing a PCP deal on the 2nd car? Would it not ultimately be the same as paying a loan back over 3 years anyway?

What do you mean pay off the remaining? As in a lump on what's left on the pcp car?

PCP deals basically require you to make a set number of payments (usually at a lower amount than if you were paying back the full amount borrowed) and at the end you have a few options:
- pay the remaining amount of the loan and keep the car
- hand it back and "hopefully" the guaranteed value covers the remainer of the finance
- trade it in and use the trade in to cover the remainder of the finance (bit simplistic but this is what the dealers want)

So if you got a 0% PCP deal for 10k over 3 years - why would you not pay the PCP for 3 years and put aside the remaining money (you would be paying with a loan) every month to make the lump payment at the end of the 3 years?

With a 10k loan you won't get a 0% rate, so it may make sense to do the above.

Also be aware dealer discounts are heavily subsidised by the (separate) finance company. So you may not get as good a discount as you would with taking it out as it is on top of the max a dealer and can salesman can offer. You can take out PCP and avail of the discounts but pay off the moment you leave the dealer with zero interest. I do it all the time as you could be talking anything up to 10k subsidised by the Financing Company (these are usually entities within the manufacturer).

It's not just a simple PCP is bad argument. There are deals to be had by playing the game.

Just curious if such a deal you mention actually exists? Or is it like these 0% APR finance deal where the initial buy price itself is inflated to factor in the lost interest.

[thebigfella]

Looked at PCP but wasn't going to work for us. We have 2 cars, we always buy a car and pay it off over 3 years or so, then change the other one and do the same again. If we take out a PCP on a new car, then what do you do when you need to change the other car. It would mean paying 2 PCP deals at the one time. The guts of £500 a month on cars and you don't own them ffs.

Why wouldn't you run the PCP for 3 years and pay off the remaining before doing a PCP deal on the 2nd car? Would it not ultimately be the same as paying a loan back over 3 years anyway?

What do you mean pay off the remaining? As in a lump on what's left on the pcp car?

PCP deals basically require you to make a set number of payments (usually at a lower amount than if you were paying back the full amount borrowed) and at the end you have a few options:
- pay the remaining amount of the loan and keep the car
- hand it back and "hopefully" the guaranteed value covers the remainer of the finance
- trade it in and use the trade in to cover the remainder of the finance (bit simplistic but this is what the dealers want)

So if you got a 0% PCP deal for 10k over 3 years - why would you not pay the PCP for 3 years and put aside the remaining money (you would be paying with a loan) every month to make the lump payment at the end of the 3 years?

With a 10k loan you won't get a 0% rate, so it may make sense to do the above.

Also be aware dealer discounts are heavily subsidised by the (separate) finance company. So you may not get as good a discount as you would with taking it out as it is on top of the max a dealer and can salesman can offer. You can take out PCP and avail of the discounts but pay off the moment you leave the dealer with zero interest. I do it all the time as you could be talking anything up to 10k subsidised by the Financing Company (these are usually entities within the manufacturer).

It's not just a simple PCP is bad argument. There are deals to be had by playing the game.

Just curious if such a deal you mention actually exists? Or is it like these 0% APR finance deal where the initial buy price itself is inflated to factor in the lost interest.

No they do exist. Plenty of them in the South a few years back.

[thebigfella]

I didn't attack the people

I attacked the product that preys on people who dont look deeper than how much per month.

Obviously you are earning commission from PCP as i have never seen someone so touchy on what is a potential economy hand grenade

Again you spout about economy hand grenades without any substance to back it up. I don't work in the finance industry and not touchy at all but you haven't made any sort of statement to back up your platitudes.