PCP the next toxic debt threat or is it?
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  1. #11

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    Quote Originally Posted by AtW View Post
    No final payment on majority of those (which is why it got so crazy popular) - they rely on secondary market instead, so if the bottom falls off that market then the whole system crashes, with banks on the hook for all this lending...

    So if leasing is as crazy popular as appears, then they've swapped the airfields full of new cars for airfields full of used cards, to keep the secondary market artificially high.

    Wondered why I didn't get a 3 year old ex-leased car in my box of cornflakes this morning.
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

  2. #12
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    It's easier to do it with new unregistered cars whose production manufacturers control - second hand market is different, also with rates going up cost of financing all that would go up - much harder to keep stock that does not move

  3. #13

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  4. #14
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    "The Car Finance Company offers rates of 49.6 per cent for customers who want a zero-deposit loan. Investors wrote off 50million in the firm as so many customers were falling into arrears."



    There cars in the market for 200, why get one that 4k that you can't afford and then make 199 monthly payments?

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    My current daily cost me 775 6 years ago.. Great little workhorse.

    Why people put themselves in massive debt for something that will (generally) depreciate is beyond me.

    Do what thou wilt

  6. #16
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    Lots of cheap cars around, one just need to wait for the right deal, say a couple of days ago I was offered nearly near Golf GTI - half price because one of the keys got lost apparently.

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    Quote Originally Posted by AtW View Post
    a couple of days ago I was offered nearly near Golf GTI - half price
    Was it LHD or RHD though....?


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    I have rented cars, bought them for cash and used PCP loans over the years. PCP is by far the most efficient way to do it because at the end of the lease you have two more options open to you than a straight rental agreement.

    Like rentals, the only risk to the punter is not having enough control of your annual mileage and ending up with additional charges you were not expecting.

    I think there is most definitely a storm coming as the new hostilities toward diesel cars are going to make swathes of them worthless and the second hand market will distort as a result.

    But the biggest problem for dealers is the sheer number of cars that were bought on cheap money that have to come back to the market in the next 12 months while diesels are tanking already. No one will buy their car from the financial team when it's cheaper to find one just like it on the BCA auction site.

    I'm not keeping my Mercedes this year as it missed its target value spectacularly. So now I'm cheerfully handing back a high mileage convertible in the middle of winter. (Thrashed it to bits as well) and my next car has been ordered from a different supplier so not even repeat business for their misfortune.

    That's loss is not my problem but mercedes finance are going to really wonder why it lost 10k on an interest free deal and none of the main dealers want the car back on their forecourts...

    Im told that roughly 600 SLs were sold on 0% finance deals thats potentially a 6 million pound problem if they are all adrift 10k on their prices

  9. #19
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    Quote Originally Posted by AtW View Post
    PCP is more of a systemic risk to the banks - everybody's roof threatened.
    Yes and no.

    The banks are directly very minor players in that market. The vast majority comes from manufacturers captive finance arms. The obvious questio n of course is where their finan e comes fro. And the terms.

    The manufacturers took a big bit in 08/09 with residuals much less than gfvs which caused some very limited problems. At that time pcp represented about 10pc of the market not the 70 odd it does now. Lenders also seem more agressive with gfvs rather than less.

  10. #20

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    Default astounding

    19 posts on this thread, and only one feeble attempt to change it to another bl**dy boring brexit thread ! there's hope for this forum yet!

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