Is PCP........... the next debt crisis???

[johnnyboxer]

more PCP bashing <yawn>

what do you think is driving the car and bike industry? you people who dont buy new contribute nothing to the industry

Mike you forgot to mention motabilaty cars they also have a large influence in the motor industry. .Al

Not for much longer under this Tory government & their PiP regime

hi bud thankfully I don't have Crystal balls ? (thumbs) . Ps and I'm just oot the naughty corner (thumbs) .sit safe .Al

Mate of mine lost his car allowance, because he can walk more than 25m, albeit with 2 sticks and great difficulty (after a bike accident)

[Trev]

more PCP bashing <yawn>

what do you think is driving the car and bike industry? you people who dont buy new contribute nothing to the industry

Never have (and probably never will) bought a new bike in 35 years of biking and over 50 bikes owned and you reckon I've contributed nothing to the industry, wtf? :blink:

[johnnyboxer]

more PCP bashing <yawn>

what do you think is driving the car and bike industry? you people who dont buy new contribute nothing to the industry

Never have (and probably never will) bought a new bike in 35 years of biking and over 50 bikes owned and you reckon I've contributed nothing to the industry, wtf? :blink:

Yep Mike is just grumpy

[KN0BBY]

more PCP bashing <yawn>

what do you think is driving the car and bike industry? you people who dont buy new contribute nothing to the industry

A VERY simplistic view, do you think many people would buy new bikes at all if they thought they couldn't sell them on at some point?

[IainD]

I don't get why folk keep bashing PCP, it is a great way to buy a bike.

You pay a deposit, then low monthly payments; either pay the balance, trade in against a new bike and do it again, or walk away. Very simple.

If you want to keep it and don't put some money away each month to cover the balance at the end (unless you already have it) then you are daft, but that is down to the buyer, however you don't get into financial trouble as you can still walk away debt free at the end of the period just a little wiser.

You can of course pay the balance, then sell on privately and (probably) end up with a little cash.

Further, like all credit agreements, you can end the agreement early by getting a balance to pay cost.

If you use the agreement to your advantage, you won't lose and it's probably financially safer than taking a loan for the full amount.

Whats not to like? (thumbs)

I'm with you (thumbs)

Even if interest rates go up PCP deals started before that will be unaffected, they aren't variable.

If you are happy with the idea of renting a car then PCP works well, and if you really want to keep it you can buy it for at the worst case scenario market value.

What is not to like?

As long as you have the money to keep up the monthlies or you have a fair few grand to pay the final lump sum. Of course, but no different to a credit card, traditional loan etc. If you have half a brain, you save up for the final payment over the period, then have the ability to decide what to do.

If your income is already stretched and you find food/fuel/rent/mortgage goes up due to the economy or inflation & you feel the pinch. Again, absolutely no different to any other loan situation and more likely to be the over-reaching being done on the house. In that case walk away at the end, no issues. PCP wins over other options.

What's not to like?

Exactly! The all the arguments made are transferable to any form of credit and not just PCP. If you bought a house you could just afford at 2% interest and it goes up to 7% then you may be up the creek, but it's not a PCP deal on a bike to blame, just being stupid.

[johnnyboxer]

I don't get why folk keep bashing PCP, it is a great way to buy a bike.

You pay a deposit, then low monthly payments; either pay the balance, trade in against a new bike and do it again, or walk away. Very simple.

If you want to keep it and don't put some money away each month to cover the balance at the end (unless you already have it) then you are daft, but that is down to the buyer, however you don't get into financial trouble as you can still walk away debt free at the end of the period just a little wiser.

You can of course pay the balance, then sell on privately and (probably) end up with a little cash.

Further, like all credit agreements, you can end the agreement early by getting a balance to pay cost.

If you use the agreement to your advantage, you won't lose and it's probably financially safer than taking a loan for the full amount.

Whats not to like? (thumbs)

I'm with you (thumbs)

Even if interest rates go up PCP deals started before that will be unaffected, they aren't variable.

If you are happy with the idea of renting a car then PCP works well, and if you really want to keep it you can buy it for at the worst case scenario market value.

What is not to like?

As long as you have the money to keep up the monthlies or you have a fair few grand to pay the final lump sum. Of course, but no different to a credit card, traditional loan etc. If you have half a brain, you save up for the final payment over the period, then have the ability to decide what to do.

If your income is already stretched and you find food/fuel/rent/mortgage goes up due to the economy or inflation & you feel the pinch. Again, absolutely no different to any other loan situation and more likely to be the over-reaching being done on the house. In that case walk away at the end, no issues. PCP wins over other options.

What's not to like?

Exactly! The all the arguments made are transferable to any form of credit and not just PCP. If you bought a house you could just afford at 2% interest and it goes up to 7% then you may be up the creek, but it's not a PCP deal on a bike to blame, just being stupid.

Yes, but PCP is making expensive vehicles available to those who couldn't normally afford them & manufacturers keep jacking up the screen price with gadgets, saying it's only a tenner extra a month for the Bose sound system

I could get a new Discovery for £500 per month on a PCP which I could just about afford each month - that is a £60k car !!!!

To buy it I couldn't afford it as the normal hp would be nearer £1000/month

£500 would be about manageable unless I lost a job or became ill etc, but on my wage it would be a stretch and I have a £60k vehicle on the drive to impress the neighbours

[rlkat]

more PCP bashing <yawn>

what do you think is driving the car and bike industry? you people who dont buy new contribute nothing to the industry

Bashing people who buy secondhand bikes. Yawn.
People buy secondhand bikes so the owner can put that money to a new bike. People who buy secondhand bikes still buy parts, insurance, servicing etc so how can you say they don't contribute anything?

[-Ralph-]

Pcp simply allows people to drive/ride something they otherwise couldn't afford. It allows people to keep up with their neighbours when the reality is they can just about scrape together the monthly payments.

Not always. It depends what you are buying.

I usually buy my cars and bikes cash.

So I bought a low mileage 2 year old Mercedes E class convertible for £26k (would have been over £50k new), a 5 year old one with average mileage is going for £16k, so by buying cash it's costing me 10 grand in depreciation over 36 months, £277 per month!!! It costs you that for a decent spec Ford Focus on PCP!! Put that money in a savings account evert month instead of paying it to a PCP, and after three years you have your 16 grand car as a deposit, and your 10 grand in the bank, to go out and buy another £26 grand car. So you don't need to be rich to do this, you just need to be diciplined and break the debt cycle. If you are paying monthly anyway, then run a car for 6 or more years instead of changing every 3 (my 10 plate Toyota had a 5 year manufacturers warranty and is still going great after 7 years, cars are not a 3 year deal anymore) and after you've finished paying monthly, start putting the money in a savings account instead and build yourself a pot of money while you drive around in the car that you've paid for in full. After three years of doing that go buy outright whatever you can afford with your pot of cash and your trade in value.

You've broken the debt and your cars will be cheaper forever more.

So, AlanHolt, I'm clearly not bought into the while PCP thing, so why did I disagree with your post? Because I could end up taking one out sometime soon to replace that Toyota, and it's not because it's something I can't afford, it's because it makes financial sense.

The car the wife wants is either a Mercedes GLC in base spec, or new Mini Countryman in pretty much top spec (both have about the same spec but the Mercedes comes with everything we want as Standard). Neither are available at 2 years old, and both are 35 grand cars for the spec we want.

Both are about £340-£360 a month on PCP. Both have a 3 grand deposit contribution from the finance company which you won't get if you don't take PCP. The repayments are £12500 to £13000 over 3 years, plus the Toyota which owes me nothing, plus that deposit contribution, and I'll easily loose that and more in depreciation if I bought a 35 grand car cash.

So, while I've tried like hell to steer her towards a Volvo XC60 or BMW X3 which I can get 2 years old having already taken the depreciation hit, that's not what she wants.

So the manufacturers have got the PCP's so close or in some cases beating the depreciation hit, that if your choice is a new model, over the first 3 years it makes more financial sense to take the PCP, than it does to buy the car outright.

Madness I know, but it's true.

I wonder if I can convince her to drive that Toyota another year until GLC's or 2017 Mini Countrymans start to appear on the second hand market?

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[IainD]

I don't get why folk keep bashing PCP, it is a great way to buy a bike.

You pay a deposit, then low monthly payments; either pay the balance, trade in against a new bike and do it again, or walk away. Very simple.

If you want to keep it and don't put some money away each month to cover the balance at the end (unless you already have it) then you are daft, but that is down to the buyer, however you don't get into financial trouble as you can still walk away debt free at the end of the period just a little wiser.

You can of course pay the balance, then sell on privately and (probably) end up with a little cash.

Further, like all credit agreements, you can end the agreement early by getting a balance to pay cost.

If you use the agreement to your advantage, you won't lose and it's probably financially safer than taking a loan for the full amount.

Whats not to like? (thumbs)

I'm with you (thumbs)

Even if interest rates go up PCP deals started before that will be unaffected, they aren't variable.

If you are happy with the idea of renting a car then PCP works well, and if you really want to keep it you can buy it for at the worst case scenario market value.

What is not to like?

As long as you have the money to keep up the monthlies or you have a fair few grand to pay the final lump sum. Of course, but no different to a credit card, traditional loan etc. If you have half a brain, you save up for the final payment over the period, then have the ability to decide what to do.

If your income is already stretched and you find food/fuel/rent/mortgage goes up due to the economy or inflation & you feel the pinch. Again, absolutely no different to any other loan situation and more likely to be the over-reaching being done on the house. In that case walk away at the end, no issues. PCP wins over other options.

What's not to like?

Exactly! The all the arguments made are transferable to any form of credit and not just PCP. If you bought a house you could just afford at 2% interest and it goes up to 7% then you may be up the creek, but it's not a PCP deal on a bike to blame, just being stupid.

Yes, but PCP is making expensive vehicles available to those who couldn't normally afford them & manufacturers keep jacking up the screen price with gadgets, saying it's only a tenner extra a month for the Bose sound system. So PCP is a good thing, but the dealers are to blame for giving you choices? You don't have to do any deal. You can ask for the spec you want eg. no extras, or walk away. Still don't get why PCP is to blame? no different.....

I could get a new Discovery for £500 per month on a PCP which I could just about afford each month - that is a £60k car !!!! Again is that not a good thing, you get the car you want to drive, for a price you can afford each month? You may never own it, but that is the same as a lease. The choice is yours.

To buy it I couldn't afford it as the normal hp would be nearer £1000/month. As above....

£500 would be about manageable unless I lost a job or became ill etc, but on my wage it would be a stretch and I have a £60k vehicle on the drive to impress the neighbours. "As Moma used to say, stupid is, as stupid does." (add a Southern Drawl).If you can't afford it don't do it. If you can and it goes tits up, then that is not the loan type to blame, but bad financial planning or bad luck.

[-Ralph-]

Reading that post back my typos and spelling are awful, but I'm on a phone and I can't be arsed to go back and fix it all, so please excuse the spelling and typos.

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