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

[Lardlizard]

Yes or no

If you have the money to buy a flashy car or nice clotheswithoutgetting 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.

But I do stay well within what I could afford. If I lost my job tomorrow, I could easily afford all my monthly bills for another year - not that it'd ever be necessary as my profession is in demand and I've never been out of work for more that a few days in the past few years.

However, doesn't mean it's logical for me to pay £25k in cash for a car rather than spread the payments.

I mean, why engage in a mortgage when your circumstances might change?

I've yet to hear of a monthly rental that's cheaper than a mortgage. Given that you have to have somewhere to live, it makes sense to take out a mortgage if you have the deposit.

Why take on student loan debt when your circumstances might change and you wind up unable to do the job you trained for?

God know why anyone takes on debt to obtain a non-vocational university degree in this day and age - I wouldn't.

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

You can't convince me it's wise to pursue a hobby using credit. If it's so "cheap' as to be no more than a train pass (and in my experience most season tickets cost a fortune) why not save up for it?

PPs keep talking about people buying flashy cars to show off and look cool and I'm sure there are people that do that but it's not the only motivation to get a new car on HP or PCP.

I use my car for work every day. I need a car that will reliably start, that doesn't need lots of garage visits and maintenance. If I have car problems it can mess a whole week up and I'd have to hire one.

I don't want to have to do car maintenance myself. I don't have the skills, time or tools to work on my car and I don't have anyone around me who could reliably help.

I'm often doing multiple journeys per day and want to be comfortable and feel safe.

I had many years of driving cheap and old cars and many years of car problems and huge repair bills.

Finance is often a big commitment per month but that's often all I have to spend apart from insurance and fuel. No MOT, often free servicing, breakdown cover included and very few repairs.

I enjoy having a nice (not at all flashy) car and why shouldn't I? It's certainly not about showing off.

Other people have different priorities and that's fine. My best friend isn't at all interested in cars and she drives a car until it falls apart but that would stress me out so much!

Now, Custard, you are supposed to sacrifice yourself at the altar of 'Well, Back In My Day We Did It This Way, The Right Way, And By Golly Nowadays Folks Just Get Above Their Stations!' in sackcloth and soot or you just aren't worthy!

Why on Earth would someone save for something they don't want when there's another way that works for them?

What's morally superior about that?

Who saves up £25k for a car? Maybe a few grand for a runaround (I used to have a 'daily beater' for leaving at the train station and picking up my plumper friends who posed a risk to my sports seats).

I only pay for the agreed period and hand it back, opting out of the balloon payment. I don't want responsibility for the whole sum.

Indeed Fruitcake.

But I do stay well within what I could afford. If I lost my job tomorrow, I could easily afford all my monthly bills for another year - not that it'd ever be necessary as my profession is in demand and I've never been out of work for more that a few days in the past few years.

Your profession might be in demand, but suppose you succumbed to a long-term illness or suffered a debilitating accident that meant you were unable to work?

However, doesn't mean it's logical for me to pay £25k in cash for a car rather than spread the payments

I agree. But why not get a cheaper car that you can pay for outright, and save up for the luxury £25k car - then you run no risk of falling into debt should your circumstances change.

You can't convince me it's wise to pursue a hobby using credit. If it's so "cheap' as to be no more than a train pass (and in my experience most season tickets cost a fortune) why not save up for it?

She didn't say it was, she said it was slightly more expensive. And well, you pay for such passes monthly, what's the bloody difference if someone chooses to do instead on another mode of transport?

If someone can afford to spend money on a hobby as they see fit, what's it to you? Why are you morally superior for spending your money differently? He thinks it's unwise to have kids financially, he's probably right. He lives with his folks in a paid off house they all jointly own, plus another 2 properties and a terrific pension and portfolio. The car is used for motoring as a hobby and as transport, naturally. They find deals that make it more economical for them than 'saving' for some car they won't want in 3 years and have the hassle of selling.

There are, if you are in the UK, a number of mortgage products still extant that are extremely unwise, btw.

Your profession might be in demand, but suppose you succumbed to a long-term illness or suffered a debilitating accident that meant you were unable to work?

People in such professions often have a little thing known as insurance to cover them in such cases and well, it also appears she has substantial savings to cover such instances and give time to re-negotiate or otherwise extricate herself well from any hardship.

But why not get a cheaper car that you can pay for outright, and save up for the luxury £25k car - then you run no risk of falling into debt should your circumstances change.

There's no 'debt' as long as you can stick to the terms of the agreement, you're paying for the use of a product, the same way you do a pair of skis at a resort or the hire of a hotel room on holiday or space on an aeroplane.

And the person may not want a car to keep with all that goes with that, they want to hire one to avoid what they perceive as hassle.

This is decidedly not a hard concept to grasp, honestly?

I completely agree it's unwise to have children financially, which is why I am childfree.

The point of the thread is that PCPs are heading the UK towards a future crisis. Everyone thinks it won't apply to them because it's well within what they can afford, it's just a hobby, etc. etc. That's exactly how people sleepwalk into financial difficulty. A society that relies on credit is a vulnerable society.

Why do you also assume all people who use PCPs are in 'luxury' cars? A lot of companies also use them, too, to provide vehicles for employees to use, because it makes far more financial sense than buying them. They depreciate quickly.

Very sneery to think anyone who doesn't think like you or act like you is just financially profligate. Plenty have explained that, for them, it makes economical sense to lease a car.

Your profession might be in demand, but suppose you succumbed to a long-term illness or suffered a debilitating accident that meant you were unable to work?

I've got income protection insurance for that.

Very few people buy expensive cars outright, unless very rich. I'd wager somebody with kids is much more at risk in the above situation than myself.

Have you looked at the price of new cars @YoungParisiansAreSoFrench? You are not buying luxury models for 25k. Nice cars yes, but fairly basic manufacturers.

For a basic fiesta you're talking 16k. For a larger basic Vauxhall or Ford18k plus.

And the person may not want a car to keep with all that goes with that, they want to hire one to avoid what they perceive as hassle.

So why not hire one, then, rather than taking out a loan?

Oh, FFS, now society is relying on credit because of PCPs? That's utterly laughable. You're really telling me a person who owns 3 properties, is earning 6 figures/annum, has a huge portfolio, is sleepwalking into financial difficulty for having a car on PCP that he shares with his father who is, for lack of a better word, rich? That's hilarious! They don't want the hassle of owning a car, so they lease one.

So why not hire one, then, rather than taking out a loan?

PCP is leasing a car. You are long-term hiring a car. .

Have you looked at the price of new cars @YoungParisiansAreSoFrench? You are not buying luxury models for 25k. Nice cars yes, but fairly basic manufacturers.

Yes - we shopped around and bought a brand new Suzuki hatchback four years ago for £7k. Probably a car that most of you would sneer at, because it's basic, small and completely unflashy, but it's at £0 tax because it has a tiny engine and thus low emissions, it travels effectively and reliably from A-B and has had nothing go wrong with it other than normal wear and tear.

As somebody who freely admits to not see the point in anything above a 'functional' car, I think you are likely totally inexperienced in the reality of owning and financing them, Parisien.

Tell me, how do I save up for a 'fancy' car every 2-3 years. Nothing too extravagant but maybe a Golf R or an S4. It'd likely involve a lot of hassle around selling/haggling etc to get the best return on the outgoing car.

I don't have time to waste doing that. I'm self employed and time is money to me.

Probably a car that most of you would sneer at,

Why on EARTH do you think a) anyone is even looking at what you drive b) making judgement calls about it and c) everyone who doesn't do as you do is just doing it for a 'luxury' or 'flash' car. Especially when you are pontificating about something you don't even know about because if you did, then you'd know that PCP/HP is hiring a car! You are hiring a car long-term. Geezo.

You can PCP hybrid cars, electric cars, all sorts . . . sigh.

You obviously got a very good deal then @YoungParisiansAreSoFrench because the cheapest model on their website starts at 11k and is a super mini which would be far too small for my needs.

Nothing about being sneery. You are making a lot of assumptions about people and actually you're the one being sneery.

I have owned and financed cars since 2003, CustardDream. You don't have to save up for a fancy car. If you can't afford a fancy car you buy ... a cheap one.

If you wouldn't be seen dead in a £10k or below Suzuki, Dacia, etc. and are happy to live your life on credit for the sake of appearances, I wish you well.

I took advice before buying my car from my trusted mechanic. He warned me off a few cars from the cheapest on the market to more expensive European and Japanese cars. Dacia was one of the makes he told me to steer clear of. Not because he's a car snob but because he's worked on them, a lot.

For the last fucking time because it's completely pointless repeating this to you, it's not about being flashy. People buy cars for lots of reasons and most of them aren't so people will be jealous. If they want to spend 50k on an Audi or a Range Rover then go for it but most of us are just wanting a nice, reliable and economical car.

FGS, for the hard of thinking: some people need a reliable car, it is vital to them to earn their living. And thus, for them, just any ol' car will not do. So they enter PCPs (in some cases, they even use company car allowance or business expense this). This is not 'credit', it is a long-term hire of a vehicle and, like anything you lease, there are terms and conditions of the hire.

Still others enter PCPs because they do not want to be bothered with purchasing a car (negotiating, checking it out, etc), complicated repairs, MOT failures, or selling a car later on. They would rather pay to avoid what they perceive as hassles of car ownership. Again, this is not 'credit', this is entering a lease, as you would do to lease anything.

It has FA to do with appearances, and everything to do with what they see as value for money (time being money for some) and avoidance of what they see as hassle.

If this is too hard for some to process, I wish them well, too.

My current car is the cheapest I've owned in a good few years. It's a Peugeotsport GTI and costs me the grand sum of £250 a month.

I was actually going buy one new for £25k but saw one for £12k which was only two years old with 13k on the clock.

£62 a week is not going to make me financially destitute - some of my colleagues spend that on their breakfasts/lunches each week by choosing not to precook food.

I'm also considering getting another Golf R as a hobby car, but again that will only be undertaken after serious consideration of my outgoings. I used to spend around £250 a month in petrol before moving closer to my job, so current car is totally paid for by that saving alone.