All - new car sales | Motoring discussion | Back Room Forum

Wed 6 Aug 2014 19:30

All - new car sales - oldroverboy.

www.dailymail.co.uk/money/cars/article-2717855/Nea...l

Interestingly, the sales boom seems to be fuelled by credit. According to SMMT, up to four in five new-car purchases are now made on credit, with many customers effectively renting a new car - typically for three years - before trading the vehicle in for a new model using a scheme known as a personal contract plan.

BOOM AND BUST.. again..............

Edited by oldroverboy. on 06/08/2014 at 19:31

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Wed 6 Aug 2014 20:19

All - new car sales - smallcar

I think part of it is the manufacturers no longer advertising the list price of a car and instead pushing the cost to own on finance which because it is a bite sized amount per month which makes the car "look" more affordable. Most people I think can't do the sums to work out how much it really costs overall.

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Wed 6 Aug 2014 20:34

All - new car sales - Falkirk Bairn

With Fiestas now having list prices of nearly £20,000 neither wonder they want to hide the price!

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Wed 6 Aug 2014 21:29

All - new car sales - alan1302

Just shows people never learn

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Thu 7 Aug 2014 00:13

All - new car sales - toblerone

I've purchased cars in the past outright. My last 3 cars have all been on manufacturers PCP deals bought via online brokers at significant discount. It gives me flexiblity in that I can change vehicle when it suits and my money is not tied up in a depreciating asset. I also shop around and look at the total price to change and anticipated running costs.

I also know if the worst were to happen, I could continue to service the finance deal and pay off any balance owed if required. Whilst I appreciate many people are against finance and prefer to pay cash, there are times where deals such as this are flexible and can be advantageous.

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Fri 8 Aug 2014 07:49

All - new car sales - drd63

I don't understand why some forum members get so excited about people leasing cars, in many cases it makes perfectly good sense. Where you can afford to purchase outright investing capital in a depreciating asset is rarely best use of money.
If you can't afford to buy leasing makes all the benefits of a new car be that reliability, efficiency or just want, I don't see the problem.

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Fri 8 Aug 2014 13:48

All - new car sales - alan1302

As long as it suits you and you can afford it then it's fine. But many people don't understand it fully and can end up not being able to afford the payments on it.

When financial compaies are too willing to give credit and people too willing to take it on that's when the problems occur. It's what caused the last financial recession and it looks like it will just boom and bust again.

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Fri 8 Aug 2014 20:24

All - new car sales - Avant

I agree with all of the last few posts, despite their differing viewpoints. Nothing wrong with leasing or PCPs - I've used the latter for years - BUT people need to understand what they're signing, and too many of them don't. These are no doubt the same people who, for example, follow too close behind other vehicles and jam their brakes on indiscriminately.

In my experience salespeople do their best to explain the terms and conditions, but there must be a case for a standard, straightforward set of Ts and Cs which cover the essentials but which everyone can understand.

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Fri 8 Aug 2014 20:54

All - new car sales - jc2

Be reminded that about 70 to 80% of all new car salesc in the UK are not private sales but to businesses of some sort - many who then lease them to people.No other country operates in this way.

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Fri 8 Aug 2014 23:00

All - new car sales - daveyK_UK

Never been able to get the same deals on PCP or lease than I can paying cash.

For example, purchased 3 Fiat Fiorino 1.3D vans ex VAT but OTR for £7600 each. At 80,000 miles and just short of 3 years old, I aim to get 2.5k - 3.5k p/x per van depending on condition..

The best equivalent lease on a 30k a year mileage allowance over 3 years was £196 per month ex Vat. Over a 3 year lease that's £7,056 per van.

I find lease deals to be expensive if you want to do high mileage.

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Sat 9 Aug 2014 00:26

All - new car sales - Manatee

In my experience salespeople do their best to explain the terms and conditions, but there must be a case for a standard, straightforward set of Ts and Cs which cover the essentials but which everyone can understand.

You'd think so, wouldn't you?

It would be quite funny if vast amounts of public money hadn't been wasted regulating consumer credit for years on end, with no benefit whatsover as far as I can see - most borrowers are utterly clueless in managing money, and successive regulators' responses have been to tie more and more regulation around lenders when what is needed is a bit of education.

Just one of a few helpful documents issued by the FCA ahead of taking over from OFT in regulating credit.

www.fca.org.uk/static/documents/policy-statements/...f

A mere 600 pages, this is fairly typical of the self-perpetuating guff that anybody engaged in the industry has to wade through.

It follows consultations on the FCA's proposals. I commend it to you, and I'd be interested to know what you think when you've read it all.

I would draw your attention to the feedback at 2.10.14G on page 119 of the pdf, to the effect that the prescribed method of explaining agreements to customers, the SECCI (Standard European Consumer Credit Information) could be made a lot easier to understand but would be illegal.

But the real gen is all in the 'source book' the CONC.

fshandbook.info/FS/html/handbook/CONC

An easy read, I'm sure you'll agree.

Credit is a basically simple thing that has been complicated beyond belief by the application of several thousand civil servants over many decades. Few things are more regulated, or less clear as a result.

Edited by Manatee on 09/08/2014 at 00:26

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Sat 9 Aug 2014 18:01

All - new car sales - jamie745

I'm not sure what else people are really meant to do. We now live in a world where a Ford Mondeo costs over £30,000 and a third of the working population have no savings whatsoever.

The only winner there is the bank.

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Sat 9 Aug 2014 18:53

All - new car sales - skidpan

We now live in a world where a Ford Mondeo costs over £30,000 a

Not in the world I inhabit.

A quick internet enquiry found this. Its probably the most common engine and a deecent spec. www.orangewheels.co.uk/enquiries/7e4dd5/enquiry_de...l

Hardly £30,000.

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Sat 9 Aug 2014 19:21

All - new car sales - Manatee

I'm not sure what else people are really meant to do.

Not borrowing money for consumption would be a start. It's fundamentally a bad thing.

The bad example set by government is inexcusable of course. PCP and PFI are much the same thing.

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Sat 9 Aug 2014 19:45

All - new car sales - alan1302

I'm not sure what else people are really meant to do. We now live in a world where a Ford Mondeo costs over £30,000 and a third of the working population have no savings whatsoever.

The only winner there is the bank.

You don't have to get a car on finance - that's an individuals choice. Save a few months payemtns and youcan get a decent used car. You don't have ot get in debt unless you choose to.

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Sat 9 Aug 2014 20:18

All - new car sales - 72 dudes

I think a lot of people out there don't think of PCP deals as "debt" sadly.

More a way to get what they want NOW without having to save up. Whatever happened to starting out with an old banger and working your way up? (Young) people want the latest lifestyle models to show off.

My third car was an 8 year old Renault 16.

My nephew's third car is a 3 year old BMW 335d Coupe MSport, which he has on PCP. He has no idea of the worth of money. Other than that he's a good lad!

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Sat 9 Aug 2014 20:45

All - new car sales - jamie745

Not in the world I inhabit.

A quick internet enquiry found this. Its probably the most common engine and a deecent spec. www.orangewheels.co.uk/enquiries/7e4dd5/enquiry_de...l

That's a base model, manual diesel and on Ford's own website the Mondeo starts at £20,000.

If you want an automatic one, it's over £30,000 before you've put any extras on it as it has to be the Titanium X Sport in order to get it. That's a car somebody might actually want to own and it's £30k. Madness.

Not borrowing money for consumption would be a start. It's fundamentally a bad thing.

That's very easy for middle aged homeowners who've never had a problem in their lives to say. Unfortunately Government would have a fit if people stopped spending as economies go nowhere unless people do - and you'll find people only live once and they've had enough of 'cutting back' over the last few years. People eventually say 'sod it' and just buy stuff.

You don't have to get a car on finance - that's an individuals choice. Save a few months payemtns and youcan get a decent used car. You don't have ot get in debt unless you choose to.

For a lot of people it's probably their only route into a reliable car. Not everybody is adept at carting round the countryside hunting down bargain motors.

I agree you can get a perfectly good car for not a lot of money. Most people think cars are worth more than they are, but buying used cars isn't for everyone. I have my own car, no BBC daytime 'Sheriff' is going to take it off me because I haven't paid some now defunct loan shark a monthly payment for it, but people don't want big Jags. They want diesel s***boxes.

Don't ask me why.

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Sat 9 Aug 2014 22:50

All - new car sales - Avant

Welcome back, Jamie. I'm with you on this: some people prefer not to borrow, others are happy to, and it really isn't a great moral issue, except to the extent that people shouldn't put themselves and their families at risk by borrowing more than they can afford to repay.

Incidentally the above posts show where car manufacturers make their profits. I'm sure it doesn't cost £10,000 more to make an all-singing-and-dancing Mondeo than it does a basic model - but there are people (or in this case mostly companies) who are willing to pay, and so the First and Only Law of Economics applies - the right price is the price that some other poor sap wil pay.

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Sun 10 Aug 2014 00:03

All - new car sales - Manatee

I don't give moral advice, but I have given financial advice to my children wo seem to have taken it. As I said above, borrowing for consumption is generally a bad idea IMHO.

Jamie's point that the economy needs people to spend has some validity, but of course if they borrow to spend then in the long run they spend less, not more, as they have to lose some income to interest.

To have a £30,000 car on credit if you have no savings is insane, but I suspect common. Many of these 'well off' people will throw themselves on the state in their old age unless they are bailed out by their inheritances, no doubt at all about that. And the way things are going, it will be slim pickings because the state has made the same mistake that they have.

It's like filling a bucket with water and whirling it about your head. As long as you keep whirling the bucket, it's fine. When something suddenly stops the bucket, you are going to get wet, and many of the live-now-pay-later people will, of that I am quite certain. We have become conditioned to the idea that things will always get better, but the pensions time bomb is ticking and fewer and fewer people will have the safety net of defined benefit occupational pensions when their earning power hits the buffers.

There's nothing natural or desirable about borrowing these huge sums basically to live beyond one's means. It's a relatively recent phenomenon, certainly on the scale of the last 25 years or so.

Sadly the more prudent will suffer too because they, and dwindling band of well-pensioned retirees, will be the only people the government can extract money from.

Edited by Manatee on 10/08/2014 at 00:05

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Sun 10 Aug 2014 12:28

All - new car sales - Smileyman

Last time I purchased a car the dealer's first questions were 'what can I afford - what is my budget?'

He was referring to monthly payments, not overall car purchase price. He was rather upset when I told him I wanted a cash price, and that I would not be getting any finance from him.

In the end I paid cash, funded from a mix of savings and discounted promotional loan from credit card that I paid off within the promotional period. In the short term it was tight, but years later I benefited from the reduced cost of purchase.

Still have the car several years on, and when I do change I look to using a similar route of purchase. Credit is expensive, and very lucrative for the lender - like the mobile phone contract there are better ways to make purchases than the seller's preferred route.

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Sun 10 Aug 2014 12:50

All - new car sales - daveyK_UK

Anyone who thinks we must spend money we haven't got for the sake of the economy, does not understand economics, a statement as mad as Gordon Brown's economic outlook.

Debt (PCP) leads to more debt. the borrower gets poorer, the lender gets richer.

It's a race to the bottom, our society and culture have learnt nothing from the economic crash.

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