My colleague has just bought an ex-PCP Mercedes, 9,000 miles, full MB service history, 4 years old for just over half the list price. The thing is indistinguishable from a new car.
This cannot be a sustainable business model in the long term.
Thats pretty normal and nothing new. Depreciation in the first 3 years of life is usually around 40% so at 4 years you can expect 50%. For which reason I have not bought a new car for a decade or more,
My understanding is that when they "rent them out" they're underwritten by financial institutions and the manufacturers aren't taking a hit.
Since almost no-one buys anything for cash any more it's probably just an extension of every other type of credit.
Mercedes sales increased by 11% in 2016.
It's a fact that the public demand ever more creature comforts and technology on their cars. It's heading the same way as the mobile phone - anyone remember when you used them to make calls ?
I hope you are wrong about the financial institutions but I suspect you are right. In the US, where PCP was invented, they already have major problems with cars being handed back rather than bought and the consequent collapse of second hand prices. And apparently here in the UK some 83% of all new car sales are on finance.
