The cost of small cars is no longer small!

motorguy

buglawton wrote: »

The very first loan I took was for a new motorbike to use to get to work with. The job was lined up before the bike. I paid half cash half loan. So yes there are use-cases for borrowed money for a motor. But modern PCP is a universe away and seems more connected with upping your lifestyle in a hurry. I do think that PCP accounts for inflated new car prices too.

Because driving say, a new Fiesta instead of a used one impresses.... who?

PCP is popular because it gets you a brand new car for the payments of a used one on HP. "Why buy a used car on finance (which i'm going to change in three years anyway) when i can get a new one (often with manufacturer incentives to do so) for the same payments but on a PCP deal?".

I remember when i was selling new Austin Rovers back in 1988 i'd people coming in at the end of their HP agreement and changing it for another car - often the reason cited was "well i'm used to the payments, so dont want to get out of the habit of paying them".

silverwhistle

motorguy wrote: »

And the point still stands - those who get sniffy about people borrowing money forget they owe probably x10-x20 to the mortgage company, and many of those people might only be a few interest rate rises away from problems. And at least a car PCP is at a fixed rate for the duration.

Credit - whether it be for a house or for a car is not a bad thing. Inappropriate credit is a bad thing.

Well, we're certainly arguing on what is inappropriate, as I agree on the basic statement. But as someone who lived through (gawd, I don't recall) 15/16%+ interest rates on my mortgage and as a singleton too I'm under no illusions that housing debt isn't an issue. But I bought a house before a car, because ultimately housing is a necessity and cars aren't. Before my £100 Marina , I had a cheap motorbike for transport.


As a society there's a lot of private debt around, and to dismiss the concerns of PCP's contribution to it on the grounds it's known and finite debt is not wise, nor does it negate the risk. The people taking it out aren't always the informed consumers AMillar seems to assume they are. Such debt might not end up a wider problem, but that doesn't mean it should be ignored.


In the meantime can I ask that more people take out PCPs for electric cars so that there is better availability a few years down the line. :-)

almillar

The people taking it out aren't always the informed consumers AMillar seems to assume they are. Such debt might not end up a wider problem, but that doesn't mean it should be ignored.

I agree! That's what this website is for - informing consumers! There are plenty of tales of woe in here, sometimes it's a rogue trader, sometimes people simply haven't understood what's going on. Those people need to take personal responsibility, and take advice from sites like this, not smooth salesmen, so that they know what they're buying.
What's being ignored?

As Martin Lewis says 'Debt isn't bad, bad debt is bad'.

In the meantime can I ask that more people take out PCPs for electric cars so that there is better availability a few years down the line. :-)

Done. I'm on EV number 2. My sister took the first one.

motorguy

silverwhistle wrote: »

Well, we're certainly arguing on what is inappropriate, as I agree on the basic statement. But as someone who lived through (gawd, I don't recall) 15/16%+ interest rates on my mortgage and as a singleton too I'm under no illusions that housing debt isn't an issue. But I bought a house before a car, because ultimately housing is a necessity and cars aren't. Before my £100 Marina , I had a cheap motorbike for transport.


As a society there's a lot of private debt around, and to dismiss the concerns of PCP's contribution to it on the grounds it's known and finite debt is not wise, nor does it negate the risk. The people taking it out aren't always the informed consumers AMillar seems to assume they are. Such debt might not end up a wider problem, but that doesn't mean it should be ignored.


In the meantime can I ask that more people take out PCPs for electric cars so that there is better availability a few years down the line. :-)

The problem is there are people whos 2+2=5 calculation looks like - lots of people have excessive debt, lots of people have PCP deals, therefore people with PCP deals have excessive debt.

Credit is not a problem in itself. Its the misuse of credit that is the problem. White washing PCP agreements as being "a problem" is wrong, IMHO.

And as Al has said, this site is about informing people and helping them make informed decisions.

Nathaniel_Essex

5 years ago you could get a entry level Fiesta for £9k brand new. Now they start at £13,000 and the KA from £11,000

motorguy

Nathaniel_Essex wrote: »

5 years ago you could get a entry level Fiesta for £9k brand new. Now they start at £13,000 and the KA from £11,000

In 2013 an entry level Fiesta was £11,530

https://www.parkers.co.uk/ford/fiesta/hatchback-2008/14-style-3d/102/used-prices/

Factor in five years of inflation and that takes that value to £12,900

https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

fred990

Nathaniel_Essex wrote: »

5 years ago you could get a entry level Fiesta for £9k brand new. Now they start at £13,000 and the KA from £11,000

That's right, so is it all now 'front end loaded' to cater for the losses in PCP?
Interestingly the expert(s) here invite me to do my own research because they don't have time to explain it! Jeez. One speaks of 'value'.
Price is what you pay, value is what you get - Warren Buffet.
Which marques will survive PCP?
My starter - Porsche....

almillar

Which marques will survive PCP?
My starter - Porsche....

Survive PCP? Can you start by saying why PCP, which has been around for decades, has to be survived by car manufacturers? They seem to like it.

That's right, so is it all now 'front end loaded' to cater for the losses in PCP?

Motorguy put it down to inflation in post #97 - did you read it?