This makes absolute financial sense I just have this aversion to borrowing money and am probably cutting off my nose to spite my face.
The doctrine I was brought up with was " Neither a borrower nor a lender be" not very current though and possibly not the best advise viewed today. Especially as it dates back to Will's days...
I certainly wouldn't want to run up debts or interest - but leasing a car is quite an attractive alternative to owning one. It's like renting it.
I'm with you Neil. Both of our cars are leased, not because we couldn't afford to buy them, but because our bank offered the finance at such low rates that it would have seemed bonkers not to take it (1,32%apr). This way, the best part of €90K stayed on the balance sheet. As anyone who runs a small business knows, it can pays to borrow money when things are looking rosy and the bank are keen to lend at a competitive rate, and to keep the cash reserves topped up against a rainy day.
The issue with the PCPs is that it's just part of the finance industry's tendency to push consumers into taking on debt they can't afford. Compared to some of the stuff that's going on that's plain evil (such as payday loans) it's not bad, but I does seem that there is maybe some mis-selling going on.
The attraction of driving a car which would normally be way beyond a buyer's budget is obvious; in the short term the punter gets to swan around in some fancy wheels, but in reality may be that he's buying a millstone to hang around his neck and will end up with nothing to show for all the money. It's sub-prime for the car market. The manufacturers like it (at least in the short term) as it boosts sales, but the fleets of cars being returned at the end of PCP deals do run the risk of seriously depressing secondhand values.
