Register to Comment
Page 3 of 29 FirstFirst 1234513 ... LastLast
Results 21 to 30 of 287
Like Tree137Likes
  1. #21
    Mad as Fish Mad as Fish is offline

    Join Date
    Dec 2012
    Posts
    24,492

    Quote Originally Posted by Orbit v2 View Post
    Yeah, it seems the sneaky thing is this suggestion that you should have enough equity from the guaranteed value to finance the deposit for the next three year cycle. So, while the value might be guaranteed, the deposit for the next cycle isn't, and you are locked into that dealer it seems. Not good. Otherwise I guess you have to find the money to make the balloon payment at the end.

    I prefer to buy used cars. So, maybe the end of this 3 year term might see a lot of used cars available at good prices.
    And that was the big advantage for the dealer, the customer would be locked in to a particular make of car, or so they hoped.
    Sign in or Register Now to reply

  2. #22
    robut robut is offline

    Join Date
    Apr 2008
    Posts
    6,016

    Quote Originally Posted by Orbit v2 View Post
    Yeah, it seems the sneaky thing is this suggestion that you should have enough equity from the guaranteed value to finance the deposit for the next three year cycle. So, while the value might be guaranteed, the deposit for the next cycle isn't, and you are locked into that dealer it seems. Not good. Otherwise I guess you have to find the money to make the balloon payment at the end.

    I prefer to buy used cars. So, maybe the end of this 3 year term might see a lot of used cars available at good prices.
    Yip .. in a nutshell .. hence possible bubble burst
    Sign in or Register Now to reply

  3. #23
    robut robut is offline

    Join Date
    Apr 2008
    Posts
    6,016

    An interesting one i remember from our boom days.

    During that time a mechanic friend of mine ( still my mechanic called Mick ) said to me he was talking to a FIAT Dealer. At the time younger people particularly were coming in buying new cars hand over fist. This dealer said they would come in the door and ask:

    Young Customer - "How much for that Car?"

    Dealer reply - "€17000"

    Young Customer - "No No, how much per week?"

    Dealer reply - "Ah OK" .. and proceed to give the amount per week needed to pay the car off over x number of years.

    Then young customer says Ill take that. He/She only concerned that they have that cash for next few months.

    Short term stuff ...
    Sign in or Register Now to reply

  4. #24
    sadcitizen sadcitizen is offline

    Join Date
    Sep 2011
    Posts
    3,907

    Quote Originally Posted by Mad as Fish View Post
    It's worth pointing out that with a PCP you are not actually borrowing the money, merely renting it off the finance company so you can if fact return the car and walk away from the commitment at any time. Of course there will be a financial penalty (three months payments or something like that) but you are not loaded with debt. The finance companies are the people with the major headache as they then have to dispose of all these used cars by dumping them on the market which may well mean they don't recover the value they had assumed at the start of the contract.
    So in that case there's not much potential for a bubble to burst right, given that cars are relatively liquid and given that there's clearly demand for newer ones?

    Worst case, we end up with a NAMA for cars and politicians can get cheap A6s.
    Sign in or Register Now to reply

  5. #25
    Watcher2 Watcher2 is offline

    Join Date
    May 2010
    Posts
    28,995

    Quote Originally Posted by Burnout View Post
    Some people in Kildare have had enough bad news today. Have job, have money, no worries, borrow away....Overnight things change big time and so many of us are totally car dependent...like myself living in the country you gotta have a reliable car.
    The start of your post reads like a warning against PCP's but then the rest of your post seems to be an endorsement.

    You should go with the most reliable for your budget. people should always have a budget.
    Sign in or Register Now to reply

  6. #26
    Watcher2 Watcher2 is offline

    Join Date
    May 2010
    Posts
    28,995

    Quote Originally Posted by Mad as Fish View Post
    It's worth pointing out that with a PCP you are not actually borrowing the money, merely renting it off the finance company so you can if fact return the car and walk away from the commitment at any time. Of course there will be a financial penalty (three months payments or something like that) but you are not loaded with debt. The finance companies are the people with the major headache as they then have to dispose of all these used cars by dumping them on the market which may well mean they don't recover the value they had assumed at the start of the contract.
    Really? That almost sounds too good to be true. If it is, is it a result of the moral hazard the banks did not learn after the last crash?
    Sign in or Register Now to reply

  7. #27
    former wesleyan former wesleyan is offline
    former wesleyan's Avatar
    Join Date
    Nov 2009
    Posts
    25,451

    Quote Originally Posted by Orbit v2 View Post
    I had one of them, but thankfully converted it into a "vanilla pay my debt mortgage" ...

    I'm interested in these PCP car finance deals. I don't have one, and I wonder what the issue with them is. I suspect if the residual value is less than you were promised, maybe because you did more mileage, or damaged it some way, then you could be faced with a big bill, but it struck me if you are conservative and really want to change the motor every three years, then they're not a bad way to go....
    That's the big catch right there. Milage quoted is often as low as 6000.
    Sign in or Register Now to reply

  8. #28
    wexfordman wexfordman is offline

    Join Date
    Nov 2006
    Posts
    9,579

    Quote Originally Posted by sadcitizen View Post
    Well how big is the market? There wont be much of a burst if it's not very big. I can't see figures.

    I can see that there are about 150k new cars registered per year, and around 70% of new cars are bought under PCP with the average price being around 30k. So that'd be around what...12 billion of loans for the years that PCP has existed, with probably some significant percentage of those people buying new cars under the same plan. I guess that's bubbley territory.
    Are car finance arms systemic and too big to fail though?
    Sign in or Register Now to reply

  9. #29
    TheField TheField is offline

    Join Date
    Feb 2012
    Posts
    2,554

    Quote Originally Posted by robut View Post
    Personally I would be very slow getting involved in these .. then thats just me, child of the 80s, save then buy when you can afford it
    'Neither a borrower or lender be' etc etc

    I've always been a bit suspicious of PCP and cars, particularly as max. mileage has to be agreed and values are always going to be subjective.

    But does this mean, that we'll have a buyers market for 3 yr old cars now?
    Sign in or Register Now to reply

  10. #30
    sadcitizen sadcitizen is offline

    Join Date
    Sep 2011
    Posts
    3,907

    Quote Originally Posted by wexfordman View Post
    Are car finance arms systemic and too big to fail though?
    Well! I was just about to ask...I don't understand banking and finance but I just checked and Nissan (for example) are using AIB for the loans? Am I wrong or does that not mean that in the event of any delinquency the taxpayer is left holding the can by default? Or are these loans then insured by some other company?
    Sign in or Register Now to reply

Page 3 of 29 FirstFirst 1234513 ... LastLast
Sign in to CommentRegister to Comment