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Original poster

To think car payments and pcp’s will be the next crisis to hit the U.K. and the world

256 replies

Lardlizard · 04/01/2020 23:51

Yes or no

OP posts:
Longdistance · 05/01/2020 01:23

PCP is the biggest con ever. When I bought my car we did all the figures, then realised the showroom would take back the car and then loan it out again after 3/4 years and make a shit load of money on that too as the APR was higher than the original PCP. No thanks!

UnderperformingSeal · 05/01/2020 01:27

Do you really think that the credit crunch taught the finance industry no lesson at all? Hmm

letsghostdance · 05/01/2020 01:28

I had two back to back. The first one I handed back and immediately took out another. The guy in the showroom didn't even look at the car before I gave it back, didn't care. However, when I tried to end the contract with the second one...oh that was awful. Couldn't drive it for the last few months due to being over milage. Insane wear and tear policy. I had to pay over £1.5k in repairs on it (and I'm talking TINY paint scrapes and ridiculous alloy repairs, these things are just so expensive. Even more frustratingly none of the scrapes or dings were things I'd done, all from people bumping me etc) and after all that I handed it back and got charged £180 for a shallow dent smaller than my thumbnail on the INSIDE of the door pillar from my seatbelt buckle hitting it. Inside as in can't be seen with the door closed.

Anyone who has a PCP who's planning to end it, start saving now!

FruitcakeOfHate · 05/01/2020 01:39

I have a friend who has an excellent job in banking who only has PCP cars. Work out great for him. He's a petrol head and gets bored of cars quickly, doesn't put a lot of mileage on as he uses the train for work except if he's on later shifts (doesn't live far from work, either). He loves powerful cars and trading them out after a few years. He goes in totally expecting and wanting to keep the car for 3 years and then get another. He can afford it, so a fig for 'buy what you can afford'.

It's not for me, but it does work for some people.

CarlyCuckoo · 05/01/2020 01:41

I think you're playing fast and loose with the word 'crisis'.

NaomifromMilshake · 05/01/2020 01:42

Right up there with endowment mortgages, if stupid people can't do the maths, they deserve everything they get.

If you can't save up and buy outright, just get a car loan with repayments you can afford, guess what you get a car at the end of it.

YoungParisiansAreSoFrench · 05/01/2020 01:43

For several years, DH and I relied on old bangers that we bought outright for less than £500 and ran for about 2 years; then we bought the cheapest possible new car outright once we could afford it, in the hope it will last us for about 10 years. I would rather endure any inconvenience/crappy car that people sneer at than buy a car on finance.

FruitcakeOfHate · 05/01/2020 01:48

But some people, who are not stupid, do not want to 'save up and buy outright' or get a car loan and fully understand the terms of the lease and have lives that comply with such terms, Naomi. It's a perfectly valid choice for such people. In my friend's case, he doesn't want to have a car loan and have a car at the end of it, he wants to turn one in and order up another one. It's a hobby to him, having these cars, and one he can easily afford (he leases them with his comfortably retired father, lives at home with said father and mother and has no kids or ties).

Thesispieces · 05/01/2020 01:53

This reply has been deleted

This has been deleted by MNHQ for breaking our Talk Guidelines.

NaomifromMilshake · 05/01/2020 01:56

I get that it works for some people, it is the people who do it to look flash and then weep and wail at the end of it.

araiwa · 05/01/2020 02:01

You are correct

Car loans will be the cause of the next financial crisis

SonjaMorgan · 05/01/2020 02:04

Limited energy reserves and a population that in general wants instant gratification is problematic. Lots of studies have been done on dopamine and how it restructures people's brains.

YoungParisiansAreSoFrench · 05/01/2020 02:08

I can't understand why anyone would spend more than the bare minimum on a car as long as it was -

  • reliable
  • safe
  • large enough to accommodate any passengers and their essential equipment

It's a piece of metal that gets you from A to B. OK, some people might admire a flashy car, but for every person that's admiring your flashy car, there'll be another judging you as a fool for wasting money on it.

Chloemol · 05/01/2020 02:18

No, you lay your monthly payment, and either swap it at the end, or save and pay it off. No different to a loan

FruitcakeOfHate · 05/01/2020 02:30

It's a hobby for some people, Young, they see driving and the car as an experience rather than just A to Z. Nothing to do with 'flashy' car for some people. Surely it's not hard to think outside one's own box and realise other people feel differently from you or me. I don't 'get' it myself, but talking to my friend, he sees the car as an experience. He does research, he checks things out, it's not about flash it's about driving a certain vehicle for a few years without the strings that go with owning it and then getting another one. He doesn't have any kids, he doesn't fly all over the place, it's his thing. Don't really see the issue if people want to do it and it works for them.

NaughtyLittleElf · 05/01/2020 02:42

I'm perfectly happy that my car is effectively leased, I will never get to the balloon payment so that's not an issue, excess mileage charges only apply if you hand the car back to the finance company (which you can do about half way through the term if you need to) not when you trade it in for another car. I need a reliable car for work, I do business miles not just commuting can't do my job without a car, I'm a single parent so there isn't another car in the household. So I buy new or nearly new on PCP and change it every 2/3 years, I understand how finance works and negotiate % rates etc. I always get a good deal.

NaughtyLittleElf · 05/01/2020 02:44

I don't have a flashy car btw just a suitable one for my needs.

CustardDream · 05/01/2020 02:44

I got a great PCP deal on a sports hatch. I'll give it back after three years and get another new/nearly new one. Saves the hassle of having to sell.

Overall PCP amount (which I won't end up paying in full) is just over half the price the car was brand new, and it was only two years old with 13k on clock and quite a few aftermarket upgrades.

It's much more cost effective than my original plan to buy new and replace every three years.

CustardDream · 05/01/2020 02:48

I can't understand why anyone would spend more than the bare minimum on a car as long as it was -

- reliable
- safe
- large enough to accommodate any passengers and their essential equipment

It's a piece of metal that gets you from A to B. OK, some people might admire a flashy car, but for every person that's admiring your flashy car, there'll be another judging you as a fool for wasting money on it.

Couldn't you say the same about having a nice house or clothes? Why not just wear a functional grey sack every day?

YoungParisiansAreSoFrench · 05/01/2020 02:52

Couldn't you say the same about having a nice house or clothes? Why not just wear a functional grey sack every day?

I could, and would.

YoungParisiansAreSoFrench · 05/01/2020 02:57

^
With the caveat that I mean nothing is so 'nice' that it's worth getting into debt for.

If you have the money to buy a flashy car or nice clothes without getting into debt, then, good luck to you.

Houses are slightly different because such is the ludicrous inflation of prices, it usually makes more sense to get into debt with a mortgage than to rent and pay more monthly, yet have nothing for your money, but I'd still counsel staying well within what you can comfortably afford.

FruitcakeOfHate · 05/01/2020 03:05

But plenty of people are not getting into debt over their PCP car, Young. Like Naughty, they do their research and get a reliable car that suits their needs (this friend of ours has a hybrid car on PCP just now) and that they enjoy using without what they see as hassle. Why sneer at them because you don't feel the same about cars or clothes or whatnot?

darceybussell · 05/01/2020 03:07

I have had cars on lease or pcp and I have also bought cheaper second hand cars. Buying your own car is so much more hassle. With the lease on the new car everything is sorted out for you, there's no mot, no messing about with repairs as in theory fewer things go wrong and most things are covered by guarantee. There's no pissing about selling the car later on. I make sure I can easily afford the repayments and I categorically do not want to own the car at the end. I want the car to belong to someone else and to be someone else's problem. So it works for me. However, I do still agree that it's a disaster waiting to happen. It means people seriously overstretch themselves to get the fancy car they can't really afford. I think it's a bubble that will pop eventually.

YoungParisiansAreSoFrench · 05/01/2020 03:11

I'm not sneering, I just think it's foolish to saddle yourself with monthly payments when there is always the possibility your circumstances might change. Why is the idea of saving for the things you want so alien to people nowadays?

FruitcakeOfHate · 05/01/2020 03:18

Is it so hard to realise that people's circumstances may be entirely different and, even if they change, they'll still be able to afford certain commitments they take on? I mean, why engage in a mortgage when your circumstances might change? Why take on student loan debt when your circumstances might change and you wind up unable to do the job you trained for? On and on.

Why is the idea of saving for the things you want so alien to people nowadays?

Because PCP is nothing to do with that for some people, is that such an alien idea? As one person pointed out, it's like a train pass to her. As in my friend's case, it's a hobby to him, he pays for something he takes great joy in doing and then moves on to another mode of enjoying motoring in a way he sees as hassle free.