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

I have lived a longish life so far - hoping for a lot more. And in that life I have seen this sort of scenario of stupid bank lending repeated every 15 / 20 years.

Remember the bank of england lifeboat and the secondary commercial property lending crash? Latin American debt in 82. US saings and loan in the 90s. There was even one in 1825 and no I wasnt around then.

Banks make profit by lending on a margin. They are under pressure from the City to increase profits every year so they have to lend more every year. In an exuberant market the lending rises every year until exuberance flips into despair, asset prices fall and we get a crash.

One thing I would bet my house on - there will be another bank lending crisis sooner or later.

The BBC have caught up with this story now, it was on the lunchtime news.
www.bbc.co.uk/news/business-39895327

~iw

I saw that BBC article. A definite black hole looming.
One comment also came across strongly was that after paying a deposit and monthly amounts at the end you actually own nothing. In effect it is a car rental deal. Actual ownership only comes about by paying the balloon top up at the end.
How many people will actually find this a financial positive? It appeals as a way of driving an upmarket car but at a cost.
Is it a case of over selling higher spec models otherwise unaffordable with buyers not really appreciating the full financial scenario?
PPI mis-selling type scandal ?
Short term financial gain for the finance houses, manufacturers and individual brokers/salesmen?
At some stage the second hand market will be hit with a glut of cars and values depressed.

I think that stage is now.