Fall Out from PCP on used cars?

hometruths

PCP seems to have really taken off in Ireland in 2014 and assuming most will trade in and start a new PCP one would expect a flood of three year old low mileage cars hitting the market in 2017.

Any thoughts on how this will affect prices? Normal supply and demand would suggest used car prices will fall.

I suspect the main dealers must have some idea of how they are going to protect prices of used stock. Eg maybe to counter this we will see widespread PCP deals on used cars?

Any ideas on what the used car market will look like in 2017?

Spoken to a couple of small dealer acquaintances - bread and butter is selling 5 - 8 year old used cars - they're saying they are noticing that people who used to be their type of customers buying new on PCP.

opinionated3

I would imagine there will be a glut of 141 cars like the vw golf that were bought on low interest pcp deals. As to what value they will ending up on the forecourt for? ...who knows. Personally I'm hoping to find a clean GTI in the new year and 141 is about what i can afford. Will be interesting to see how main dealers handle this upcoming situation. Wonder how this has fared out in the uk and the United States bearing in mind that they have been using pcp for quote some time now. In 2 to 3 years time i could say the same about the hyundai tuscon.....they seem to be everywhere right now and I'd wager most of them are on pcp deals. ...IMO i reckon the higher specced ones will keep their value substantially better than base models. ..

ShadowHearth

opinionated3 wrote: »

I would imagine there will be a glut of 141 cars like the vw golf that were bought on low interest pcp deals. As to what value they will ending up on the forecourt for? ...who knows. Personally I'm hoping to find a clean GTI in the new year and 141 is about what i can afford. Will be interesting to see how main dealers handle this upcoming situation. Wonder how this has fared out in the uk and the United States bearing in mind that they have been using pcp for quote some time now. In 2 to 3 years time i could say the same about the hyundai tuscon.....they seem to be everywhere right now and I'd wager most of them are on pcp deals. ...IMO i reckon the higher specced ones will keep their value substantially better than base models. ..

UK is already reporting a bubble going burst soonish. They have issue with it and they are a good bit further in to pcp life then we are. I would not be surprised to see it happen here, but not this year as 141 will be proper first year when pcp got its traction.

We can already see used cars being overpriced and it makes more sense to go pcp with low or 0% Apr over 1-3 year old car as it works out same money in the end when you calculated apr you will pay on used car.
Stock overpriced and bad financial deal, so far dealers don't pay attention to it and just keep pushing pcp to everyone. We will get even more used stock soon that won't sell if dealers will keep that artificial high price to make pcp look good. Give few years and arse will fall of the market and we will be bailing off dealerships instead of banks.
The flood of cheap UK cars due to low pound is not helping situation one bit.

mickdw

It is pretty clear we will be heading towards low / zero deposit pcp. You can see it in the UK. Bmw giving huge dealer contribution, in effect discounting the car but creating a fictional deposit via this contribution.
They have started doing this here now as well but not to the same level.

bazz26

This is going to turn into a chicken and egg situation. They are pushing PCP on new cars making them more attractive than second hand ones. When many of these PCP cars come back onto dealers forecourts then who is going to buy them if the incentive to still to buy new via cheap credit. Something will have to give as it's just not sustainable. If the arse falls out of the used car market here then it has a knock on effect on PCP cars when they are returned at the end of their terms.

Atlantic Dawn

I'm sure the government could bring in a twice yearly NCT for cars 8 years and older or similar scheme to force people to buy newer cars.

I suppose at the end of the day there will be people who had the €10-€12k deposit for their current PCP but won't have it to renew in to another car or buy out their current so will be in the market for an older car.

draiochtanois

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ironclaw

I think your ability to haggle will be very strong when the difference between PCP and a straight buy on an older car is narrow. Dealers can't have old stock clogging up forecourts so it has to go somewhere, either exported (Not going to happen) or sold off at a discount so it moves. Brexit should also be well and truly seated in the next 1 to 3 years which has to have an effect on the import market (As it already has)

Personally I'm delighted as I have no interest in a new car and I'll gladly take a top spec with a through history from PCP when someone else has paid off the depreciation.