Do most people finance Cali or ???

[soulstyledevon]

When I bought a vehicle recently I asked the dealer how they made the most money-we then agreed that I signed onto finance, left it for 6 days then executed the buy out clause in cash and ended the agreement. Dealer got their cut and I didn’t get charged any interest!. He was quite happy and had given me a massive discount anyway.

NZ my father in law did the exact same thing on a new Seat Leon.
If you have the money it’s a great way to squeeze the lemon

 

[Amarillo]

It’s a scam. Truly awful system IMO.
Bloody expensive way to own a vehicle.

Agreed. You cannot magic a good deal from a complex financial arrangement. Simple is cheap.


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[s2bear]

Another way of looking at it:

PCP’s arose from the small print in straight forward credit agreements of old.

Under the Consumer Credit act (as it was then), once you have paid 50% and, if you have taken reasonable care of the goods, you can simply return the goods and walk away.
Doesn’t matter what your balloon is, or even if there is one - 50% is your get out.

Hence nowadays, manufacturer subsidised finance on new vehicles often has a Guaranteed Minimum Future Value (GMFV) built in. You will get at least that amount back if you sell it back to the dealer - it’s contractual and a kind of marketing gimmick if you like, seeing as you are protected by law anyway.

In some ways, if the interest rate is attractive, you have more protection (from the Consumer Credit legislation) and a built in put option if you finance a car.

YES, the PCP trend may be a ticking time bomb but more for the institutions offering the finance (and perhaps people who bought for cash in some cases will have market exposure- probably not Cali’s) rather than the consumer.

If the market is flooded with cheap diesels for political reasons and / or because a load of PCPs expire at once causing values to drop, those who financed know, their downside. The banks on the other hand, will potentially own a lot metal at the wrong price.

Having said all of that, California’s are a lower than average volume / different animal so the downside / pcp/ dieselgate scenario is possibly is less relevant.

Sorry if you’ve all glazed over whilst reading this!




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[RichieVW]

I previously had an AUDI purchased through a PCP agreement. I was going to purchase outright, however they offered me a good discount and free servicing for 2 years. I paid the balloon at the two year point and then sold the car 6 months later for quite a bit more than balloon cost me. Motoring is never the most financially savvy pastime, however, my experience to date of PCP isn't that bad!

 

[Alied]

PCP is the next big financial scandal.
The bubble is forecast to burst.
https://www.theguardian.com/money/2017/sep/19/car-finance-debt-dealers-consumer-credit

This is also an interesting read.

https://www.theguardian.com/money/2...s-driving-us-towards-the-next-financial-crash

 

[soulstyledevon]

This is also an interesting read.

https://www.theguardian.com/money/2...s-driving-us-towards-the-next-financial-crash

Good read