Getting into the PCP Game

BOWFER

Arklight said:

BOWFER said:

No, supply and demand determines price, not the number of humans with a pulse in the country of sale.

Your understanding of the American car market is, bizarrely ill informed. I have driven many different cars in the US. Some of the most common vehicles are Toyota Camrys and Nissan Altimas, followed by Kias. The Ford line is, absenting small hatches like the Focus and Fiesta,  much the same and the build quality is no better or worse than here.

Top three selling cars in America are American built pick-up truck things.
I well remember Chrysler here, horribly badly built.
And Tesla aren't exactly know for their build quality either.

Arklight

ComicGeek said:

Arklight said:

motorguy said:

Arklight said:

No, supply and demand determines price, not the number of humans with a pulse in the country of sale.

Your understanding of the American car market is, bizarrely ill informed. I have driven many different cars in the US. Some of the most common vehicles are Toyota Camrys and Nissan Altimas, followed by Kias. The Ford line is, absenting small hatches like the Focus and Fiesta,  much the same and the build quality is no better or worse than here.

Very simplistic view.

Local taxation makes up a big part of the price of any new car, and irrespective of "supply and demand", manufacturers need profit to survive so wont sell them at a loss.

Bemused that people taking out a PCP deal must be a "schmo" by the way - perhaps the deal suits their needs, they can afford it, and are happy with it?  Outrageous, i know...

I don't think you understand how supply and demand is calculated, or how it's fundamentally the only metric that sets prices.

Apart from the cost of raw materials, labour costs, energy costs in manufacturing, company overheads etc etc.

But obviously none of those contribute to set prices....

Yes, which is supply and correlates with the number of people able to and willing to pay that for a product (demand) that then sets a market price.  If there is no supply corollary with an equivalent  level of demand then there is no supply at the price. This frequently leads to products not being made at all.

This is one of the most fundamental principles of market economics. 

https://www.investopedia.com/terms/l/law-of-supply-demand.asp

fred990

Family of four I know are all on the pcp hamster wheel and have been for some years now. All complain they never have any money left for savings to buy their own car! There's been an impressive fleet outside over the years. 
They've got the patter of a salesman, I guess they've heard it a few times now. 
I'm told we've been lucky with our two VW's (19 & 23 yrs old) that have never failed to start nor ever broken down.....owned from about two years old. 

BOWFER

fred990 said:

Family of four I know are all on the pcp hamster wheel and have been for some years now. All complain they never have any money left for savings to buy their own car! There's been an impressive fleet outside over the years. 
They've got the patter of a salesman, I guess they've heard it a few times now. 
I'm told we've been lucky with our two VW's (19 & 23 yrs old) that have never failed to start nor ever broken down.....owned from about two years old. 

Not many people have the means to pay for a car, then also put enough side to pay for another one.
Not sure I get their point there.
As for keeping the same cars for 17 and 21 years, that's my idea of hell (no offence, we're all different).

AdrianC

fred990 said:

Family of four I know are all on the pcp hamster wheel and have been for some years now. All complain they never have any money left for savings to buy their own car!

Mmm. It has long struck me that the PCP hamsterwheel is a lot easier to get on than to get off.

fred990

BOWFER said:

fred990 said:

Family of four I know are all on the pcp hamster wheel and have been for some years now. All complain they never have any money left for savings to buy their own car! There's been an impressive fleet outside over the years. 
They've got the patter of a salesman, I guess they've heard it a few times now. 
I'm told we've been lucky with our two VW's (19 & 23 yrs old) that have never failed to start nor ever broken down.....owned from about two years old. 

Not many people have the means to pay for a car, then also put enough side to pay for another one.
Not sure I get their point there.
As for keeping the same cars for 17 and 21 years, that's my idea of hell (no offence, we're all different).

I think they mean they would like cheaper motoring but seem to be stuck with the new car syndrome?

No offence taken they're only a means to get around. My idea of hell is wasting money on new cars rather than other things....

motorguy

Arklight said:

motorguy said:

Arklight said:

If every schmo with the ability to sign their name on the bottom of a finance form for 3 years of  expensive, risky renting just refused to, we would all see new car prices fall like a stone because they would align with what people could afford, not what people could afford every month.

Look at what a new car costs in the US and then look at what the same new car costs in the UK. Rip Off Britain is Rip Off Britain because Brits are gullible consumers who are afraid of haggling and often barely numerate.

It's the same absurdity that drives Britain's nonsensical debt-slavery with house prices. But that's a different (and long gone) board.

You try selling new cars at list price and see if you still think brits are gullible consumers who are afraid of haggling.  British buyers by used cars based in price (and they use the "search by lowest price first" on A/T and elsewhere to get that) and then when they get to the dealers they still expect £,£££s off. 

On new cars they will know precisely what they can get off - discounts are easily checked online.  No one pays list price for a typical car.  No one pays anywhere near it.

US car prices have different tax regimes than UK but having just had a cursory look, a new 3 series in the US starts at $40,000 

https://cars.usnews.com/cars-trucks/bmw/3-series/2020

A new 3 series in the UK starts at around £30K before discounts.  Seems broadly similar to me?

It will vary car to car, depending on where its made and tax regime.

You need to look at actual dealer prices. 

The Nissan Altima is a popular "nice" family saloon. Pretty powerful, decent spec, a good CVT transmission. Equivalent to a Mazda 6 or Ford Mondeo. I have driven many.   Americans are more inclined to buy from a dealer for  what would be an equivalent pre-reg here perhaps. 

https://www.cargurus.com/Cars/new/nl-New-Nissan-Altima-Los-Angeles-d237_L2163#listing=265577756

$21,678 before discounts. You would be lucky to get a Dacia Duster with a radio in it and windows with handles for that much here.

Really? 

Hard to find a like for like comparison because big auto saloons arent popular here, but heres a barely run in 2020 manual Mazda 6 for £18,690

https://www.autotrader.co.uk/car-details/202107094829440

Of course, you can buy a brand new one for not much more at £20,412 -

https://broadspeed.com/new_cars/Mazda/6/Choose_Number_Of_Doors/

motorguy

Arklight said:

motorguy said:

Arklight said:

No, supply and demand determines price, not the number of humans with a pulse in the country of sale.

Your understanding of the American car market is, bizarrely ill informed. I have driven many different cars in the US. Some of the most common vehicles are Toyota Camrys and Nissan Altimas, followed by Kias. The Ford line is, absenting small hatches like the Focus and Fiesta,  much the same and the build quality is no better or worse than here.

Very simplistic view.

Local taxation makes up a big part of the price of any new car, and irrespective of "supply and demand", manufacturers need profit to survive so wont sell them at a loss.

Bemused that people taking out a PCP deal must be a "schmo" by the way - perhaps the deal suits their needs, they can afford it, and are happy with it?  Outrageous, i know...

I don't think you understand how supply and demand is calculated, or how it's fundamentally the only metric that sets prices.

If the supplier cant make the product for the price that the market "demands", then they simply wont. 

If a manufacturers break even point is £30K for a car, and demand drops, they're not going to survive very long in business if they sell them at £25K are they?

 So i think its you that doesnt understand pricing.

neilmcl

Arklight said:

motorguy said:

Arklight said:

No, supply and demand determines price, not the number of humans with a pulse in the country of sale.

Your understanding of the American car market is, bizarrely ill informed. I have driven many different cars in the US. Some of the most common vehicles are Toyota Camrys and Nissan Altimas, followed by Kias. The Ford line is, absenting small hatches like the Focus and Fiesta,  much the same and the build quality is no better or worse than here.

Very simplistic view.

Local taxation makes up a big part of the price of any new car, and irrespective of "supply and demand", manufacturers need profit to survive so wont sell them at a loss.

Bemused that people taking out a PCP deal must be a "schmo" by the way - perhaps the deal suits their needs, they can afford it, and are happy with it?  Outrageous, i know...

I don't think you understand how supply and demand is calculated, or how it's fundamentally the only metric that sets prices.

Maybe I should hand back my Economics qualifications. Yes supply and demand are the main determinants of prices but there are a whole lot of factors that influence that demand and supply, local taxation being one of them. I agree with @motorguy, you have a very simplistic, black and white view of the whole subject here.

born_again

Arklight said:

born_again said:

When you really drum it down.
PCP is MSE.
You are getting a new car for a lot less than someone you buys it out right. (that is in the terms of your outright bank balance has more money in, than the person buying the car)
OK at the end of the term, one still has the car & the other does not (unless they pay to buy it)

If you run the numbers for the average life (14 years) of a car. PCP might come out cheaper if your car requires money spending on it to keep it going...
So £250 a month would be £42K. Could you buy & fully service a car for 14 years on that amount?
eg Kia niro £234 a month.
£26K new that leaves £1150 a year to play with over the 14 years...

Either way who cares. Each to their own.

This from someone who is not PCP lover....

This doesn't relate to any PCP arrangement I have ever heard of. PCP agreements are usually for 3 or 4 years at most, at which point you have a balloon payment you have to fund yourself based on a price that was estimated years ago, which is essentially you buying a 3 year old car. Or you go back on the treadmill of debt with a new vehicle.

You pay off the estimated monthly depreciation of the vehicle plus the finance costs and interest, plus restoring any damage before you return it, plus any mileage penalties. The car is then returned to the manufacturer and sold off for more than the marginal cost that that it cost them to produce in the first place.

PCP is an amazing deal, for the motor industry.

My example was based on someone keeping a new car for 14 years (average lifespan) against someone taking a new PCP every 3 years, returning car & stating a new deal. Rinse & repeat. 
So they get a new car every 3 years with warranty etc. Whereas the bought car has to fund repairs themselves.

Remember I've never had a car on PCP, nor intend to take on a PCP deal. Just run some numbers.