PCP the new PPI Scandal?

motorguy

Cornucopia wrote: »

I agree. But sometimes it isn't simply about the most sensible option.

Yes, definitely. However, as i said, when its "easy low payments" and a shiny new car, sometimes sense takes second place.

My sister (terrible with money) used to use the justification "i've always wanted one of these" for whatever new trinket / motorbike (i kid you not) / car she happened to impulse buy. As if "i always wanted one" trumped her inability to afford it....

Cornucopia wrote: »

It would be interesting to know how many people perceive PCPs in that way (they wish to keep the car beyond the end of the term). I'd certainly say that those people were more likely to be in the mis-sold camp than others.

Its a system designed to rinse and repeat. Its very effective. At the end of term simply take the car back, get a quote for a new car and off you go!

It doesnt mean anyone is mis-sold anything, just doesnt allow for any equity in the asset. Which can be a good thing, or - when times go bad - can be a very bad thing.

Dont get me wrong - i've had PCP deals. Lots of them. Sometimes bigs ones! I'd a new X5 with a list price of £51K on a PCP deal. Squeezed the life out of the deal so the payments were "reasonable" (relatively) but there was never any equity in the deals. Chopped it in and got what i owed on it.

Contrasting, i've a 2007 Merc C350 now. Bought for with cash, and if things get tight, well i've no monthly payments and something horrible happens, i can liquidate it and get £4,000+ back in to play. Our 370Z - we bought it at just under 2 years old for £20K (£35K list new) and have it on a loan, so theres probably £4K of equity in that car which will increase as we move closer to paying it off.

Same with my son. Hes 22. Has never had finance but his car is worth maybe £7K. It would be easy to chop it in and drive something flash for 3 years, but as things stand he knows he can flog it any time and get a decent lump sum back.

Cornucopia wrote: »

At the risk of contradicting myself in a moment, the issue is that cars are a depreciating asset - there is no getting away from that being the most significant cost in the vast majority of cases. I suppose it can even become a personal choice kind of thing: whether one is happier with the depreciation issue neatly sown up, or simply trusting to the marketplace and forgetting about it until the time comes. I've been stung often enough on residuals to be firmly in the former camp, and if there had been 0% PCPs or other cheap ways to guarantee against excessive depreciation, I would have used them.

Yes, i can agree with that. Cars can be horrid things, with big bills. I spent £1,000 on the Clio 197 i had in three months and i sold it needing £1,000 spent on a gearbox rebuild. Its easy to see how even spreading that £2,000 over a year theres a case to be argued for a PCP or lease.

And maybe its ok to have no equity in your car, particularly if you have savings and are in a good, secure job.

As i said, i'm not against PCP deals - they're not, however, a way of buying a car and usually being attached to brand new cars, they could - and lets be honest do - put some people into deals that they would have been wiser not doing.

Ebe_Scrooge

Stacy_B wrote: »

Far too many youngsters, often with their 1st car, are going out and paying for brand new cars using PCP

No they're not. Most youngsters I know of buy their first car just as I did - get a part-time job, save hard, buy an old banger, learn how to really drive, accept the odd scrape and ding, no worries. I don't know of any youngsters whose first car is brand new. Unless Mummy and Daddy are paying for it, in which case they should be educating little Timmy.

Sorry, this thread has really got me annoyed. If you're in the position to be getting a brand new car ( PCP or not ), then you really can't blame anyone else if you can't be bothered to read and understand what you're committing yourself to.

Chucky1234

Thought I'd add my opinion for what its worth.

I'm young and just committed to a PCP deal. Being driving 2 years, first car was an old banger with lots of dents. Now in a secure job, which leaves me with a fair bit of income left over.

A new car appeals to me, and as such, I am willing to spend my money on it. The cars list price is around £16k, couldn't afford cash, wouldn't have been able to get a loan, and didn't want to commit to large monthly payments.

I can comfortably afford the monthly payments on the deal I have chosen. I am also going to put aside a set amount each month which will mean I can afford the balloon payment at the end, if I wanted to.

I haven't decided if I want to keep the car yet, 3 years down the line I'm hoping to be earning a lot more money and will probably want a better car, but if not, then I should still be able to afford the car.

Another poster has been questioning why somebody would buy a new car without all the top specs. The specs I have added on to my car are privacy glass and navigation as they are the only two I actually find worth it. Whilst automatic lights and wipers would be handy, I don't see the point in paying extra for something which takes very little effort. I didn't see the point in cruise control as I wouldn't use it.

I'm in my car a lot and enjoy cars, I value them enough to spend a lot of money on them. Being first and only owner of a car appeals to me too. I don't think PCP is a scandal at all, it fitted my needs perfectly and I made a sound financial decision to enter into a particular finance deal which suited me.

takman

Chucky1234 wrote: »

Thought I'd add my opinion for what its worth.

I'm young and just committed to a PCP deal. Being driving 2 years, first car was an old banger with lots of dents. Now in a secure job, which leaves me with a fair bit of income left over.

A new car appeals to me, and as such, I am willing to spend my money on it. The cars list price is around £16k, couldn't afford cash, wouldn't have been able to get a loan, and didn't want to commit to large monthly payments.

I can comfortably afford the monthly payments on the deal I have chosen. I am also going to put aside a set amount each month which will mean I can afford the balloon payment at the end, if I wanted to.

I haven't decided if I want to keep the car yet, 3 years down the line I'm hoping to be earning a lot more money and will probably want a better car, but if not, then I should still be able to afford the car.

Another poster has been questioning why somebody would buy a new car without all the top specs. The specs I have added on to my car are privacy glass and navigation as they are the only two I actually find worth it. Whilst automatic lights and wipers would be handy, I don't see the point in paying extra for something which takes very little effort. I didn't see the point in cruise control as I wouldn't use it.

I'm in my car a lot and enjoy cars, I value them enough to spend a lot of money on them. Being first and only owner of a car appeals to me too. I don't think PCP is a scandal at all, it fitted my needs perfectly and I made a sound financial decision to enter into a particular finance deal which suited me.

I really think automatic wipers, lights and cruise control should be standard on all new cars. All those little things soon add up and definitely improve the driving experience. Plus cruise control makes a big difference for people who travel longer distances. I definitely noticed they were missing when I drove a new car without them.

But one thing that surprises me is that you say you enjoy cars and spend a lot of money on them I'm surprised you don't want to own one.

AdrianC

takman wrote: »

I really think automatic wipers, lights and cruise control should be standard on all new cars. All those little things soon add up and definitely improve the driving experience.

If you can't tell whether you need lights or wipers on, then you should have your licence withdrawn in seconds flat.

Plus cruise control makes a big difference for people who travel longer distances.

In the majority of UK motorway traffic conditions, it encourages tailgating and sluggish overtaking. Off-motorway, it has absolutely no place whatsoever.

takman

AdrianC wrote: »

If you can't tell whether you need lights or wipers on, then you should have your licence withdrawn in seconds flat.

What a load of rubbish!. Automatic lights are not as useful because lIghts are not turned on and off much. But having automatic wipers are very useful because they adjust the speed depending on the amount of rain which can change quite often. Why bother to do it yourself when it can be done automatically?. Just like you don't tune in your radio each time you change stations, you have preset ones programmed in.
But then why have indicators in your car when you can use hand signals?. Or why have a starter motor when a handle in the front does the job?. It's all about convenience.

AdrianC wrote: »

In the majority of UK motorway traffic conditions, it encourages tailgating and sluggish overtaking. Off-motorway, it has absolutely no place whatsoever.

Again I completely disagree, once I set the cruise control I can press and up and down button to adjust the speed by 1mph to set the correct distance. When you overtake you press the accelerator to increase speed and when you release it goes back to the set speed again.
I also frequently use it on a local A road and it works just as well as on the motorway, Plus also on dual carriageways.
It definitely makes long drives a lot more comfortable and it is designed so that it can be used while still maintaining safety.

AdrianC

takman wrote: »

What a load of rubbish!. Automatic lights are not as useful because lIghts are not turned on and off much. But having automatic wipers are very useful because they adjust the speed depending on the amount of rain which can change quite often. Why bother to do it yourself when it can be done automatically?

Because, unlike auto wipers, I get it right. And all it takes is extending one finger from the steering wheel for a second or less.

prowla

Cruise control is a great feature, especially in the 50 mph speed restrictions where roadworks are. However, it's only useful in flowing traffic, not where there are queues & stop/start.

takman

AdrianC wrote: »

Because, unlike auto wipers, I get it right. And all it takes is extending one finger from the steering wheel for a second or less.

My Autowipers on my 13 year old car work perfectly well and adjust the speed depending on how much it is raining. It may only take a few seconds to adjust the wipers manually but this has to be done evertime the amount of rain changes. But what is the point in choosing to do it manually when it can be done automatically? .

Cornucopia

takman wrote: »

My Autowipers on my 13 year old car work perfectly well and adjust the speed depending on how much it is raining. It may only take a few seconds to adjust the wipers manually but this has to be done evertime the amount of rain changes. But what is the point in choosing to do it manually when it can be done automatically? .

What does this have to do with whether PCPs are suitable for young car purchasers?