Word of warning - car finance

attila_

I saw this on the bbc news and thought it may be useful for anyone thinking about car finance plans - https://www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/business-your-money-48776454

I’ve not actively been involved but I have seen recently on this forum heated debates on car financing of new cars (pcp or hp) particularly around this vs buying upfront albeit an older/cheaper car.

Car financing plans may work for some but when I was reading these forums I was nearly pursuaded to buy a new car and pay monthly vs what I chose in the end which was an older car upfront and budget for maintenance. I’m glad I chose the latter. I like many others reads these forums to gauge consumer experience or matters which are of interest. Given the theme of MSE I would say that anyone should really think twice about getting a new car of car financing plans when deciding a new car. Unless they are absolutely comfortable they can afford the car and upfront payments.

If they can’t or have any doubts then be a MSE and go for a cheaper alternative! Hope this helps people in the future.

BoGoF

Unfortunately it seems a lot of people love the 'status' of a shiny new car that they really can't afford over good old common sense.

roddydogs

It wasnt even new! Some people buy things they cant afford then moan to the media, Its their fault for not budgeting, cars cost plenty apart from the repayments, insurance, servicing,tax petrol. Whod have guessed?

AnotherJoe

I heard the woman (mother) being interviewed on Moneybox. IMO she's an entitled whatsit, blamed everyone except her ditzy daughter for buying something she didnt have the wit to realise could be an issue couldn't afford (£20k audi for university student with a part time job!)

As put in another post in this thread, snowflake family, always someone else's fault, not even a glimmering of personal responsibility

photome

not even newsworthy. stupidity comes to mind.


it doesnt matter how you finance a car purchase it has to be paid somehow ,so a 10k car is going to cost more than a 1k car, its not rocket science

Ebe_Scrooge

Blatant irresponsible lending !

<Tongue firmly in cheek there !>

Honestly, you'd have thought that someone intelligent enough to be at university would have enough common sense to do a simple bit of primary-school maths and work out the total cost - or to plan for a not-unlikely eventuality like losing your job. Words fail me. Still, I guess that's the way things are heading these days - "I was stupid, but let's see who else I can blame".

attila_

photome wrote: »

not even newsworthy. stupidity comes to mind.

Same stupidity as people who fell for pay day loan companies? Which is now heavily regulated?

These are all finance products, as the margins get tighter the screws gradually start to get turned on consumers (through mis-selling as example). At first glance it appears consumer fault but when its too late we then blame the financial instruments that consumers are being subjected to...

AnotherJoe

attila_ wrote: »

Same stupidity as people who fell for pay day loan companies? Which is now heavily regulated?

These are all finance products, as the margins get tighter the screws gradually start to get turned on consumers (through mis-selling as example). At first glance it appears consumer fault but when its too late we then blame the financial instruments that consumers are being subjected to...

Quite different things IMO. PDL were often the last resort of desperate people. Spending £20k on a car when your only income is a part time job is not a last resort nor was the lendee desperate.

Car_54

AnotherJoe wrote: »

Quite different things IMO. PDL were often the last resort of desperate people. Spending £20k on a car when your only income is a part time job is not a last resort nor was the lendee desperate.

"Lendee"? Is that what's called a "borrower" in English?

AnotherJoe

Car_54 wrote: »

"Lendee"? Is that what's called a "borrower" in English?

Senior moment, the word wouldn't come to mind.

iwb100

Come on. A student signed up for a £20000 second hand car on PCP and that's the lenders fault?

The thing is PCP CAN BE a good way for people to "lease" a new car - if people have the means to pay for the monthly amounts. Its like any contract you have to weigh up the personal risks - make sure you can cover it should the worst happen. But PCP should be compared to traditional lease deals to see which will cost less over the term.

My big issue with these stories is people taking a lack of personal responsibility for their decisions. I currently have a car on PCP as it was better than the PCH deal due to incentives. And I pay less than £320 a month for a far bigger (though less fashionable) car than the Audi A1. And its new. PCP on a second hand car? - never, ever ever.

But the people in the article need to take responsibility. You aren't forced to sign the contract. Engage brain before parting with cash.