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lease vs. purchase - what, which & why?
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Complete nonsense.
Loans, Debt Free Wannabe and Motoring boards are littered with examples of it not being. It has also been reported that PCP is the next crisis on the horizon worse than the sub-prime mortgage debacle of the noughties.
Given 16 million people have less than £100 in their bank and 75% of all new cars last year were "sold" on PCP deals are you honestly trying to claim that the majority of people who got a new car on PCP/Lease had enough money to go buy one outright? Being able to afford the repayments is NOT the same as being able to afford the car.
I have enough money in the bank to go out and buy a brand new model of the car I drive in cash, I can afford to buy it. If I didn't have the amount of money in the bank it costs to buy one but I could afford to make the monthly repayments then no I can't afford it as I'm having to use other people's money to purchase it. If you have to use other people's money to get something then its unaffordable.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Loans, Debt Free Wannabe and Motoring boards are littered with examples of it not being. It has also been reported that PCP is the next crisis on the horizon worse than the sub-prime mortgage debacle of the noughties.
Oh please, not that old chestnut again. Last time i checked only 1 post in the last 20 pages on the loans board referenced a PCP deal.
So much wrong again, so little time....- it hasnt been "reported", its been newspapers trying to drum up another scandal - and they've failed miserably
- The ambulance chasers would love it to be a scandal, now that PPI is over and the "oh i got food poisoning on my all inclusive to Ibiza" claim scam has fallen on its !!!. They've failed miserable to get any traction with PCP.
- The reason why they've failed is - get this - its not a scam or a scandal! :eek:
- The car market is probably 1/1000th the size of the mortgage market
- Any "risk" in the car market is borne by the finance companies. Any risk in the housing market is borne by the mortgage holder
Given 16 million people have less than £100 in their bank and 75% of all new cars last year were "sold" on PCP deals are you honestly trying to claim that the majority of people who got a new car on PCP/Lease had enough money to go buy one outright? Being able to afford the repayments is NOT the same as being able to afford the car.
Ah but the two truths of "a lot of people dont have savings" and "a lot of people PCP cars" do not equal "a lot of people who PCP cars dont have savings". Thats simply adding 2+2 and getting 5.
Credit is not a bad thing. Inappropriate use of credit is a bad thing. You're confusing the two.
It can be cheaper to lease a car or PCP a car than it would otherwise be to run the same vehicle with a cash purchase.
Oh, and the O/P HAS access to £30K to make a cash purchase, so your point is null and void anyway.
This is like shooting fish in a barrel...0 -
It has also been reported that PCP is the next crisis on the horizon worse than the sub-prime mortgage debacle of the noughties.
75% of all new cars last year were "sold" on PCP deals[/b]
A little light reading over at the BOE staff blog maybe?.......the FCA are 'concerned' too. Bank Underground claim it's over 80% last year I think.
It's almost like the motor industries own Quantitative Easing.......?Funnily, i've been pondering a small Caddy sized van to facilitate a side project i'm going to work on. I havent seen much movement yet, but in theory markets like pickups and vans are likely to be hit by the upcoming downturn.Would be interesting to hear if anyone has direct experience?Why? So you can argue with them?0 -
Move along nothing to see here, such financial wizardry and sophistry is as solid as a CDO/RMBS, allegedly. Until it isn't.
A little light reading over at the BOE staff blog maybe?.......the FCA are 'concerned' too. Bank Underground claim it's over 80% last year I think.
It's almost like the motor industries own Quantitative Easing.......?
You're right, theres nothing to see here. I'm sure you know that the FCAs initial findings were nothing to write home about and the final document isnt expected to be earth shattering
Our main findings from the work done so far are that:
- growth in motor finance has been strongest for consumers with better credit ratings, who are less likely to face repayment difficulties
- arrears and default rates remain generally low, though they have increased moderately in recent years
- arrears and default rates are higher, and have risen more, amongst customers with the lowest credit ratings, who account for around 3% of lending
- if not properly managed, some of the commission arrangements in place could incentivise dealers to arrange more expensive finance for customers
- in some cases, customers are not being provided with key information in an accessible manner, including information provided on lenders’ and dealers’ websites
- the largest lenders are adequately managing the risk of a severe fall in prices for used cars, but firms should regularly consider relevant changes in the market.
https://www.fca.org.uk/news/news-stories/motor-finance-update0 -
Move along nothing to see here, such financial wizardry and sophistry is as solid as a CDO/RMBS, allegedly. Until it isn't.
A little light reading over at the BOE staff blog maybe?.......the FCA are 'concerned' too. Bank Underground claim it's over 80% last year I think.
It's almost like the motor industries own Quantitative Easing.......?
This shouldnt be a thread about the pros and cons of PCP or leasing anyway.
If the O/P comes back and tells us the specific car they have in mind and how long they expect to keep it then it should be easier to recommend one option or another - which may be cash or otherwise.0 -
I have a lease car on my drive. Circa 42k. DriveTheDeal price around 37k so will use that as a comparison.
My lease is over three years and will cost me, incl the initial rental £16,300.
Sounds very expensive for three years?
If I look at auto-trader at cars that are 3 years old with my anticipated mileage on, they are on SALE at between 16 and 18k. WBAC on those registrations gives £14 to 15k as a value.
On my lease I am paying £16,300. If I had purchased and sold after three years have the potential to have lost £23k.
Obviously if I planned to keep the car after three years, that difference would probably go down but I generally only keep my cars for 2 or 3 years anyway.
I decided to lease so I have no long term commitment until the petrol vs diesel debate settles and to give a chance for petrol economy to improve even more or for those cars to be three years old and for me to buy one of them 2nd hand.0 -
So £20-22k of depreciation is costing you £16k.
Who's subsidising that £4-6k gap?
If the answer is "the manufacturer" or "the dealer", then there was more discount to be had on buying.0 -
So £20-22k of depreciation is costing you £16k.
Who's subsidising that £4-6k gap?
If the answer is "the manufacturer" or "the dealer", then there was more discount to be had on buying.
I honestly dont know and yes, quite possibly more discount to be had but would that have been as a cash sale or part of a PCP ( we all know how dealers love their PcP's) but that would have had to have been about a £10k discount in total..... if DtD was only at £37k, cant really imagine getting it down another 5k!.
It is (was) an outgoing model and the car had already been made and was sitting at the German port and had already been allocated to a dealer.0 -
So £20-22k of depreciation is costing you £16k.
Who's subsidising that £4-6k gap?
If the answer is "the manufacturer" or "the dealer", then there was more discount to be had on buying.
Yes - there was more discount to be had on buying - by leasing companies buying 1,000 cars at a time.
Also you and i have to buy through the dealer who has to get their margin. Leasing companies often deal directly with the manufacturer, which you and i cant do.
TBF i'm surprised you dont know that.0
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