Is the used car market doomed to collapse at some point due to all the PCP offers?

I can't get my head around PCPs. Are they a brilliant consumer deal or will they destroy secondhand car sales in the future? Is the used car market doomed to collapse at some point due to all the PCP offers?

Asked on 17 September 2018 by

Answered by Honest John
The secondhand market won't collapse; it will merely find a new, lower level. But the bankers providing the finance might collapse when the 'Guaranteed Future Values' far exceed what the cars are actually worth on the market. PCPs enable people who would not normally afford fancy cars to drive fancy cars. But these are the very people who would have formed the market for the cars when they came off the PCPs. Now, instead of buying used they are buying new, leaving far fewer buyers out there for the cars coming off the PCPs and thereby driving prices down. Add to that the gross overvaluing of the GFVs in the first place then yes, I think you are right.
Tags: pcp finance
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