perils of car finance

frost500

What do I propose? 
Don't know. All I know is consumers get done over at the end of contracts every time. Maybe a mandatory 48hr gap between when you sign the contract, and when you it actually becomes binding, for cooling off / reflection. Or when punters take a part ex in, the dealer should offer to repair it, of advise that it is repairable, and there is no need to replace it. There should be health warnings outside dealers and on their websites "Warning. It is highly likely that at the end of the contract, you will be substantially worse off than the contract states. This is because normal wear and tear will be perceived as damage by the dealer, and they will charge you to rectify this - DO YOU WANT TO CONTINUE?"

George_Michael

frost500 said:

What do I propose? 
Don't know. All I know is consumers get done over at the end of contracts every time. 

Utter rubbish. The only way that you could possibly know this is if you were personally involved in every single finance contract involving vehicles in the UK.

There are a lot of people who get vehicles on finance and whom look after those vehicles and because of this, don't get "done over" at the end of the contract term.

born_again

frost500 said:

What do I propose? 
Don't know. All I know is consumers get done over at the end of contracts every time. Maybe a mandatory 48hr gap between when you sign the contract, and when you it actually becomes binding, for cooling off / reflection. Or when punters take a part ex in, the dealer should offer to repair it, of advise that it is repairable, and there is no need to replace it. There should be health warnings outside dealers and on their websites "Warning. It is highly likely that at the end of the contract, you will be substantially worse off than the contract states. This is because normal wear and tear will be perceived as damage by the dealer, and they will charge you to rectify this - DO YOU WANT TO CONTINUE?"

Wait hang on.

Seems you are on the finance co's side with only 48 hours.
As consumer already gets... 14 days
https://www.mycarcredit.co.uk/cooling-off-period-car-finance

Many people PX a car that has nothing wrong with it, but it no longer meets their needs.
Like I now need a new car with a bigger boot to allow a mobility scooter to be carried.

Do you really think dealers would last long if they did what you are suggesting?
Remember no new car sales = fewer 2nd hand cars on the market = higher prices.

Sadly your rant is falling apart through lack of basic knowledge of the finance game.

molerat

frost500 said:

"There are often incentives for taking on finance which effectively make it cheaper than buying for cash.  £2.5K dealer contribution for taking out 0% finance, £0 for paying cash. "
What that says to me is, the dealer is selling finance, the car is just the medium in which to do this. Cash sales are a hindrance to them. There used to be a time when you would get substantial discount at the dealer if buying cash.

A dealer can sell a car for £20K cash and get £20K or they can sell it on finance and they get £20K plus a commission from the finance co. Of course they are going to push the finance and will be able to offer a sweetener so everyone is happy. Why should people not like shiny new cars, I do and it is my prerogative to spend my hard earned exactly as I wish. I can't understand why some people will spend £300 per month filling their lungs with tar, £100 in a night only to then put it down the toilet or over the pavement and their shoes, pay £10K to sit on a giant infection spreading hotel in the sea or a few £K sitting in the sun at some foreign rat infested hot spot with dodgy food.  Each to their own, if you want to drive around in an antique rust bucket that is your prerogative and you are welcome to do that. Your view of there being no difference between a 2005 Golf and a 2020 version is staggering, the difference between my previous 2015 car and my current 2019 from the same stable is immense.

Bumping the kerb with your wheels is not wear and tear, my last 2 cars with 14 years ownership between them had no wheel damage when sold, it is down to poor driving so of course you will be charged for that damage.  There was a poster here a few weeks back stating that he was being charged for a non working remote key which he thought might be down to a battery but hadn't checked, again both those cars of mine were sold with 2 working keys, so really was a lack of routine maintenance and could have saved a fortune if they had bothered.

lordmountararat

I bought a new car in 2017 on PCP finance because it cost £2.5K less than cash (dealer contribution £500, manufacturer contribution £2K). I paid off the loan a few weeks later from my savings so ended more than £2K up. I like PCP, if handled sensibly.

frost500

All very good points - respect to you all.

 

What I meant by the 48hr period idea was the dealer can't accept your signed documents until 48hrs after you have signed them. So they call you up and say, are you 100% sure you still want to go ahead with this contract? You may feel different after a couple of days. I know you have 14 days to cancel afterwards, but after 14 days, what happens to your part ex car - they can't give it you back. Do they end up giving you the money for whatever your partex car was worth?

 

I can see the point of financing for the savvy, of course I can. Zero percent deal is better than withdrawing money from the bank, of course this makes perfect sense. 

 

I suppose the overall point I am trying to make is people who are already stretched can easily get trapped into contracts, by the allure of the "£25 per week, drive away in a hour" enticements, etc. Easy to fall into, like I did.

EssexExile

frost500 said:

"I took out finance last time because it was cheaper than paying cash" How can this be? Was the interest charged negative?

They gave me a £1000 deposit contribution and 0% 3-year finance. Without taking the finance I wouldn't have got the deposit contribution. That's the second time it's been like this, I don't know why they do it but I don't argue.

AdrianC

frost500 said:

If you are a regular person, the car will be used everyday, so it will get knocked in car parks, kids will stain the seats, the alloys will rub on curbs. This is normal, to expected, real life. The evil finance companies will call it "damage" and charge you at the end of the contract.

The fair wear and tear standards are well-publicised and documented.

The industry-standard booklet is available on this page, as well as from many similar ones.
https://www.hitachicapitalvehiclesolutions.co.uk/faqs/end-of-contract-bvrla-fair-wear-tear-guide

If you can't stop your children spilling stuff on the seats, and you can't manage not to drive into kerbs - then - yes, it probably is better not to have a car on any kind of lease or PCP and expect to return it.

Yes, new cars depreciate. However you pay for them. Why? Because people prefer buying new things to second-hand ones. And, by the sound of the state of your cars after a couple of years, the reason why should be obvious.

DUTR

frost500 said:

 "But if you want or need specific things from your car - that are present in the 2020 Golf and not in the 2005 Golf". No disrespect, I can't think of any. Both will be similar to drive. The modern Golf will be more green. But it still converts 50 litres of fuel into pollution every couple of weeks the same as any other car. But it is surely more green to keep and old car going, than it is to produce a new one?

I just think after decades of car ownership, buying a new or used car on finance, is just so last century. The whole industry needs to change. People are obsessed with writing off £300-£400 a month just to have a new(ish) car to drive around in. Why? With car finance, you think you own the car, yet the finance company owns you. The punter just just manages the depreciation for the finance company, and you pay interest for doing this. Not for me anymore, hasn't been for a while.

Having gone from a 2005 Golf to the equivalent 2014 Golf, Lower insurance, lower VED, lower fuel bills, larger sunroof, heated windscreen, Limited Slip Diff, under seat storage, updated sound system, DAB radio, USB ports, BT connection, enhanced phone connection, keyless entry, AEB, tyres work out cheaper, as for the drive, more torque , better performance, night lighting to name a few As for writing off £300-400 pm month, paid outright. 
The moral, only get a car if you can comfortably afford it.

ontheroad1970

frost500 said:

"I took out finance last time because it was cheaper than paying cash" How can this be? Was the interest charged negative?

With all due respect, if you do not understand how you can indeed pay less through finance than straight cash, then your OP is just an poorly researched rant.