PCP isn't MSE

motorguy

Grumpy_chap said:

Sea_Shell said:

I'd wager that where I live, they'd be hardly a single new Mercedes, BMW, Audi, or Jaguar on anyone's driveways without PCP.

As it is, we seem to be awash with them.

You'd think some of them would choose a decent car 
Some must be company cars.

motorguy said:

BOWFER said:

As I see it, cars have just become glorified mobile phones.
You choose a 'tariff' you're happy with and upgrade every few years.
No repair costs to worry about and you're always in the latest tech.
No problem with that at all.
Only problem, IMO, tends to be 'stick in the muds' who have this desire to 'own' stuff.
I'm 54, but these folk make me feel young.

You're not wrong with your analogy.

People have got used to paying for things monthly.  They get paid monthly, they have monthly mobile phone bills, pay their mortage monthly, electric bill, pay their broadband monthly, etc.

Those things are effectively a "service" to them - telecoms, housing costs, utility, comms.

So why not their car also?  Its just providing a function for them like a house, mobile phone or electric bill is doing for them.

The car and everything else monthly is one choice.
It also seems a high risk choice as if anything happens to disrupt the monthly income, the outgoings become a problem.  

Do they?  Why?

Or are you assuming that people who have cars on PCP are living paycheque to paycheque with no savings?

Grumpy_chap

motorguy said:

The car and everything else monthly is one choice.
It also seems a high risk choice as if anything happens to disrupt the monthly income, the outgoings become a problem.  

Do they?  Why?

Or are you assuming that people who have cars on PCP are living paycheque to paycheque with no savings?

Far more likely than own house, own car, own furniture, own mobile phone, own pension, own emergency fund.

When COVID hit and everyone ended on furlough at 80%, we saw plenty of threads from people bemoaning they could not afford anything and had to hand stuff back from people who had everything on monthlies.  I don't recall any such threads from people having their Bangernomics car repossessed.

The very marketing of PCP (and similar products with the focus on monthly cost) is all around affording what you can't afford.

• Average salary around £30k https://www.findcourses.co.uk/inspiration/articles/average-salary-uk-2018-14105
• Average new car around £33k https://cardealermagazine.co.uk/publish/average-new-car-price-risen-38-per-cent-past-decade-says-cap-hpi/146938

That is simply not a sustainable relationship.

I am thinking of starting a "rent a life" product where you simply give me all your money, set some options of which things are more or less important, and I'll pick the stuff you can have and let you borrow it for a bit.

Sea_Shell

Life for rent... I'm humming Dido now 😉

JamoLew

Damn @Grumpy_chap - i miss read and thought you said "rent a wife"

Grumpy_chap

JamoLew said:

Damn @Grumpy_chap - i miss read and thought you said "rent a wife"

That will obviously be within the full "rent-a-life" product.  A double win for me as I'll simply match up different people who have purchased "rent-a-life" with the suitable partner for the expressed preferences on the form.  All with the simplicity of an easy out after the agreed time.

Very versatile, opt for a sporty model one time, then a bit of posh, alternative hair colour, or even a scary madam (won't be offering baby models though - entirely inappropriate).  No restrictions to only pairing gentlemen with ladies - just whatever you wannabe to spice up your life.

motorguy

Grumpy_chap said:

motorguy said:

The car and everything else monthly is one choice.
It also seems a high risk choice as if anything happens to disrupt the monthly income, the outgoings become a problem.  

Do they?  Why?

Or are you assuming that people who have cars on PCP are living paycheque to paycheque with no savings?

Far more likely than own house, own car, own furniture, own mobile phone, own pension, own emergency fund.

When COVID hit and everyone ended on furlough at 80%, we saw plenty of threads from people bemoaning they could not afford anything and had to hand stuff back from people who had everything on monthlies.  I don't recall any such threads from people having their Bangernomics car repossessed.

The very marketing of PCP (and similar products with the focus on monthly cost) is all around affording what you can't afford.

• Average salary around £30k https://www.findcourses.co.uk/inspiration/articles/average-salary-uk-2018-14105
• Average new car around £33k https://cardealermagazine.co.uk/publish/average-new-car-price-risen-38-per-cent-past-decade-says-cap-hpi/146938

That is simply not a sustainable relationship.

I am thinking of starting a "rent a life" product where you simply give me all your money, set some options of which things are more or less important, and I'll pick the stuff you can have and let you borrow it for a bit.

There are always going to be people who over commit themselves in life and unfortunately some people did suffer unexpected hardship last year and others this year.  That was not limited to those with PCP finance and it certainly did not exclude those who chose to drive old cars.

Whilst clearly on here we have a unique bubble where people are actively chosing to drive old, very cheap cars as a lifestyle choice and have vast sums of money in the bank, in the real world, many of those who are driving something old and cheap arent doing so out of choice, and sadly, they were and are as likely to have been / be impacted by sudden income changes.

My recollection last year was that the finance companies were falling over themselves to offer "payment holidays" to people of 3 months and then further extended to 6 IIRC because quite frankly they couldnt get the cars back off people anyway due to lockdown NOR did they want the cars back because they couldnt have sold them due to lockdown either (and anything more than the finely tuned percentage of VTs and repossessions becomes very problematic for them very quickly).

Many of the posts around "issues" with PCPing last year were because people found they no longer needed a car due to working from home or being furloughed long term and expected just to be able to hand the car back.

Grumpy_chap

So, is the average car £ > average salary £ sustainable?

motorguy

Grumpy_chap said:

So, is the average car £ > average salary £ sustainable?

Does it matter what list price is?  

Discounts of 20-25% are quite normal.

And in reality, 98% of new cars are either taken on either via a PCP or lease deal so its about a deposit plus monthly payment. 

A new Focus could easily be £30K, yet its probably not that difficult to lease / PCP one for £250-300 a month.

If thats the main car in a two income household, then yes thats a sustainable model.

If its not, then people will stop buying new, or get cheaper cars new.  

dipsomaniac

Don't bother sending your CV motorguy you've got the job as head of PCP UK🙂

11 pages in, have we established whether you save money paying for a car on PCP? Or are there cheaper options? Or do the 'I want it now crowd' not care how much they pay?

Herzlos

dipsomaniac said:

Don't bother sending your CV motorguy you've got the job as head of PCP UK🙂

11 pages in, have we established whether you save money paying for a car on PCP? Or are there cheaper options? Or do the 'I want it now crowd' not care how much they pay?

I thought it was already covered; PCP on a new car will often get you a dealer contribution (discount) and potentially get you a decent rate with lowish payments (because half of it is deferred). So you could potentially buy a new car for less than a pre-registered or 6-month old car. Then if the PCP is attractive enough you can make more from having the cash sat in an investment account. Job done.

I know you're going to twist that to the point that a £200 used car is cheaper than a new car. That's true, but someone needs to buy the new cars, no?