Talk Morgan Forums Community The Malvern Arms PCP Car Finance Future Problems

Exactly, the real worry isn't with the consumer taking on credit or debt, it's more about the financial black hole appearing between the finance houses and the manufacturers

Car finance deals are being worked out on overinflated residuals which initially is good news for the consumer but in the long term when the it all untraveles it could be another financial mess with bail outs

I don't know whether it still does but the RBS owned a lot of Jaguar dealerships purely for the finance

It could be a mini sub prime crisis

And many of the high end exec cars that will be given back to the finance houses to sell through dealer networks in the next few years will be diesel!!!

Oops

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.

I bet that was why Mrs May backtracked on diesels saying diesel car owners would be helped

It would have been nothing to do with helping individual owners or consumers, it would have been because the large car manufacturers and finance houses would have been beating a path to her door protecting their values

It seems the BoE and politicians have spotted the next potential economic crisis and hopefully a sensible solution comes out of it.
I bought a car just over 2 years ago. Didn't go PCP.
Trade in old car, paid extra cash, ended up with sensible monthly payments. I did a projection for the 3 year period for the cost over that period. My route came out lowest cost, a big part being the residual value of the car remaining as MY asset.
I tend to keep cars not trading in after short periods, especially considering the very high year 1 depreciation.Hence the PCP seems more geared up to replacement at the end of term incurring longer term finance to feed.
As a private buyer this seems more sensible to me.

I wonder if PCP might be the new PPI - mis-sold on the basis of un-affordability.

Probably, considering the American way of suing we now have in the UK.

"I don't care if my pushy sales create s**t for people or the economy. My bonus is so much more important.".
Lessons are never learned.

+1

We never buy any thing from a pushy sales person. If they try that we always walk away. WE decide wat we want. and what we can afford.