Are the wrong people choosing or being accepted for pcp finance?

Diarmuidin

As per title in my opinion they are, the young couple who have taken out a mortgage etc. The pressure perharps of keeping up with the neighbours. The person who has the value of the car and more in the bank should be more qualified for pcp than one who is living month by month and having mortgage, credit union loan etc.

colm_mcm

It's not the biggest risk you'd ever take tbh. People assume other people are stupid though.

Senna

So only people who have the money for the car in the bank should be taking out the loan?

lifeandtimes

Yeah not the biggest risk.

If you don't keep up repayments don't they just take the car back?

It's not immediate either so they would have time to prepare and have everything sorted before it's repossessed

Atlantic Dawn

You will know in 3 years, lol.

Toyotafanboi

I'd say the finance companies prevent people who really havn't any hope of paying it back from getting finance.

If you were on minimum wage and bought a new Fiesta, Polo type car for €15k ish and had a trade in worth €5k to use as max deposit, the brand spankers new car would only set you back €35 ish per week, around 10% of your income.

When the 3 years are up, finance your final €5k for a similar weekly payment and still have a relatively fresh car under backside. Hardly a bad place to be.

If you were feeling truly nuts you could put away an extra €15 a week and have half your ball on payment covered by the time you get there to take the sting out or refinancing. That'd be using 15% of your weekly income.

It actually almost makes better sense than going to the credit union for €5k cash to put with your trade in.

Now if you are on minimum wage and by some miracle get PCP on a new A4 or something, that may be a different story, but people living way beyond their means isn't limited to car ownership.

It's late and my maths could 've wrong but I think I'm in the ballpark with those numbers.

lifeandtimes

Toyotafanboi wrote: »

I'd say the finance companies prevent people who really havn't any hope of paying it back from getting finance.

If you were on minimum wage and bought a new Fiesta, Polo type car for €15k ish and had a trade in worth €5k to use as max deposit, the brand spankers new car would only set you back €35 ish per week, around 10% of your income.

When the 3 years are up, finance your final €5k for a similar weekly payment and still have a relatively fresh car under backside. Hardly a bad place to be.

If you were feeling truly nuts you could put away an extra €15 a week and have half your ball on payment covered by the time you get there to take the sting out or refinancing. That'd be using 15% of your weekly income.

It actually almost makes better sense than going to the credit union for €5k cash to put with your trade in.

Now if you are on minimum wage and by some miracle get PCP on a new A4 or something, that may be a different story, but people living way beyond their means isn't limited to car ownership.

It's late and my maths could 've wrong but I think I'm in the ballpark with those numbers.

That's a great comment thank you.

But where are you getti g a 172 car,fiesta or not for 15k? Genuinely asking as I may take out some pcp

Diarmuidin

Senna wrote: »

So only people who have the money for the car in the bank should be taking out the loan?

The individual or couple who are living month by month while paying a mortgage, credit union loan and in unstable employment. Don't be saying something I'm not.

Toyotafanboi

A new 3 door low spec Fiesta is €14500 on the Ford website, a new Polo starts at €15500.

I know a motoring enthusiasts worst nightmare is driving a brand new, low spec hatchback yoke but for a non car enthusiast, it's bliss. You get a new reg to impress the neighbours and generally speaking good reliability and cheap tax, insurance, servicing and a very predictable ownership experience.

jimmycrackcorm

Diarmuidin wrote: »

As per title in my opinion they are, the young couple who have taken out a mortgage etc. The pressure perharps of keeping up with the neighbours. The person who has the value of the car and more in the bank should be more qualified for pcp than one who is living month by month and having mortgage, credit union loan etc.

In the scenario you describe the real life problem is having an old car and suddenly finding that they needs the guts of a grand to do a repair job. I have a relation who was in that scenario and is mid way through a cheap PCP. Faced with a 900 euro bill to get their 8 year old car through the NCT, with likely follow up repairs, they traded it in for a cheap new car. Dependable and little over 50 euro a week.

They will buy it outright when the balloon is due financed by ad-hoc savings from intermittent overtime etc.

DaveyDave

I went with VW so it may be easier with them because it's their own bank? They seem to do a fairly thorough check.

I don't have any credit, no loans or credit cards or anything so I was worried I wouldn't get approved for finance. As I don't have any history I just needed additional proof I had a few grand in savings and a bank statement proving consistent savings. On top of that the usual bank statement, proof of employment and proof of adequate income.

So someone like me, young, new driver, no credit history I'd say I'd fall into the kind of person you're talking about but they do these deals every day. They know who is suitable and who isn't. Someone who is paycheck to paycheck, low income is possibly unable to make consistent payments for 3 years and probably wouldn't be approved. The key thing here is being able to make consistent payments, people on good money might not be approved for that reason. Someone could earn more than me and be crap and saving X each month.

When I was going for a Golf, my payment was €375 before haggling. I was told as I didn't have any history to go by they'd probably want me to prove I could afford €500 instead of €400 just to be safe.

I seem to be in a better place than most people I know my age though. I have a good well paying job, previous job was 3 years, relationship is long-term, saving for a mortgage etc. Most people I know had kids too young or bounced around from job to job. Maybe you're referring to 20-22 year olds? I'm 25, I like to consider myself young :P

pa990

An interesting read.

http://m.independent.ie/business/personal-finance/are-pcps-the-best-way-of-driving-down-cost-of-your-next-new-car-35816490.html

On the pros, and mostly cons of PCP.

Each to their own, but to me , Cash is King, and brand new is just massive depreciation.

DaveyDave

pa990 wrote: »

An interesting read.

http://m.independent.ie/business/personal-finance/are-pcps-the-best-way-of-driving-down-cost-of-your-next-new-car-35816490.html

On the pros, and mostly cons of PCP.

Each to their own, but to me , Cash is King, and brand new is just massive depreciation.

That article says most PCP deals are limited to 15,000km. I've only seen 20,000km? Wouldn't have killed them to mention that. It will just turn people off something they already know nothing about.

I doubt PCP counts for up to 60% of car sales considering how many people think PCP is the work of the devil...

Hopefully the rise in PCP cars means there's more top of the line spec second hand cars getting traded in and less poverty spec floating around

Wibbs

Strong uptake of "cheap" unregulated credit that depends on low interest rates and a buoyant car sales market, on a depreciating asset, that will depreciate more than forecasts suggest when the glut of three year old cars hits the market. Never mind another addition to the fourth highest level of Personal debt in the EU. Naw, nothing can go wrong there...

Great for the car makers as it helped pull them out of the mid noughties crash* and over production. It increases the turnover of cars to buyers - where someone might buy two cars in say 8 years, now they're more likely to buy three on a PCP. It increases brand attachment, as chances are high if someone gets a VW on a PCP, when it comes to renew they're more likely to stick with another VW. It increases the take up of more luxury cars too.

Good for the customers too on the face of things. After essentially renting a new car for a couple of years, they can get another dopamine fix, going up the numbers for essentially no extra outlay.

The problem comes as I said above, the system depends on strong resale values in the 2/3 year old car used market and interest rates staying low. That's before the possibility of defaulters rising.Where PCP has been on the go for longer in the US, concerns have already been raised by financial analysts. And that's before we consider how the car market itself is changing. It may not be too long down the road where personally owned cars are a rarity.

That all said it's the manufacturers that stand to lose the most as a group. Personally speaking it just smells dodgy to me. Never mind that we should as a society be reducing the environmental impact of such consumerism. And no, even if you PCP an EV and feel all smugly green, you'll have to drive a long way before you offset the damage that the manufacturing and transporting to market your car causes to the environment.








*it would be my humble that the crash hasn't fully resolved. Instead of letting the market resolve it, governments and central banks stepped in to head it off, kept interest rates atricfially low and pumped bazillions in "imaginary" money into the markets. There's a reckoning to be had.

I love Sean nos

Diarmuidin wrote: »

As per title in my opinion they are, the young couple who have taken out a mortgage etc. The pressure perharps of keeping up with the neighbours. The person who has the value of the car and more in the bank should be more qualified for pcp than one who is living month by month and having mortgage, credit union loan etc.

Thanks for giving your unsolicited opinion, OP. Any evidence to back it up?

Or did you just get turned down for PCP and you feel a bit "Waaaahhhh!" about it? :pac:

Wibbs

I love Sean nos wrote: »

Or did you just get turned down for PCP and you feel a bit "Waaaahhhh!" about it? :pac:

Man we Irish have short memories. Not so long ago I remember reading(on this very site too) and hearing that exact same thing from people only with "PCP" swapped out for "mortgage". Boasting of an ability to get into more debt over a depreciating consumer item is hardly much of a boast now, is it?

Nonoperational

Depends on circumstances. It's absolutely ideal for me. Like everything, if you can't afford it it's a bad idea.

Diarmuidin

I love Sean nos wrote: »

Thanks for giving your unsolicited opinion, OP. Any evidence to back it up?

Or did you just get turned down for PCP and you feel a bit "Waaaahhhh!" about it? :pac:

What evidence do you want internet links? I had to bail out a niece who got into financial difficulty who's hours hot cut at work and having a mortgage and only a year into a pcp.

I love Sean nos

Diarmuidin wrote: »

What evidence do you want internet links? I had to bail out a niece who got into financial difficulty who's hours hot cut at work and having a mortgage and only a year into a pcp.

Well, something more substantial than a dataset of 1.

Sam Kade

colm_mcm wrote: »

It's not the biggest risk you'd ever take tbh. People assume other people are stupid though.

In fairness lots of people just want to know how much a week the car loan will cost and forget about baloon payments or the term of the loan or total cost of the loan.

beauf

Diarmuidin wrote: »

As per title in my opinion they are, the young couple who have taken out a mortgage etc. The pressure perharps of keeping up with the neighbours. The person who has the value of the car and more in the bank should be more qualified for pcp than one who is living month by month and having mortgage, credit union loan etc.

I expect the issue of insurance on older cars will make people feel it makes more sense to buy new than a older used car with a high insurance loading.

colm_mcm

There's a lot of middle ground between a 10/15 year old car and a new car.

Fred Swanson

This post has been deleted.

Wibbs

beauf wrote: »

I expect the issue of insurance on older cars will make people feel it makes more sense to buy new than a older used car with a high insurance loading.

That's a big factor alright. The government want "old" cars off the road as much as possible. The financial sector ditto. SIMI certainly do. Inflating the new market helps all of the above. The government can show off a "rising" economy and "market confidence", the finance sector are funding it and SIMI make hay. Insurance hikes on "old" cars are another pressure and IMHO not unconnected to this overall drive. The "green" and "safety" angle is heavily pushed in the usual government mouthpieces media sources. Even though the same gov takes cash off drivers of older cars to deem them fit roadworthy for the roads they don't want them driving on.

Atlantic Dawn

Richard Curran did an interesting piece in the Independent during the week, I can see his point that it will be the lenders who are most at risk if PCP flops, the customer can simply walk away if they don't want the car at the end...

A flooded second-hand market could reduce the market value which would hit the lender.

For the customer, these risks are a lot less. The lender will take the hit if the car isn't worth what they thought it would be worth, but the customer may find they don't have enough equity left the in car to use as a deposit to go again and get another one. The lower the deposit, the greater the monthly repayments will be on their next car.

Volkswagen Bank lent out €340m in the first seven months of 2016, which was equivalent to what it lent out in all of 2015. The average amount being lent also appears to have risen, with BMW saying its average PCP loan in 2015 was €27,000 but last year it was up to €30,000.

However, as growth in new car sales began to slow, some manufacturers are reducing their prices. Internationally, Volkswagen Bank has lent out €100bn to its customers.

The real danger is that second-hand car values will fall dramatically. In the UK, a used car that is less than two-and-a-half years old is worth 57.6pc of its original value on average. This is down from 61.1pc in 2014. The scale of motor credit in the UK has garnered attention from the Bank of England.

http://www.independent.ie/business/irish/driving-down-car-prices-through-cheap-credit-could-put-lenders-on-a-road-to-ruin-35876521.html

Captain Chaos

Fred Swanson wrote: »

This post has been deleted.

House prices are going up and up. There is no bubble, everyone said they would come down years ago and they are now getting higher than the crazy times with no sign of slowing down. Average price has gone up 2 grand per month, every month this year so far.

Tons and tons of demand with no supply and there's plenty of people with the cash and more than willing to pay.

Fred Swanson

This post has been deleted.

Wibbs

Captain Chaos wrote: »

House prices are going up and up. There is no bubble, everyone said they would come down years ago and they are now getting higher than the crazy times with no sign of slowing down. Average price has gone up 2 grand per month, every month this year so far.

Yet 100,000 Irish homes are still in negative equity, so hardly higher then the crazy times. The market is adjusting back from when it tanked, driven by a different environment pressure now regarding supply. Runaway prices on any commodities bought on credit are never good, unless one is prescient enough, or rich enough to buy when everyone is selling after a bust and sell just before everybody else realises it's tanking again.

"House prices are going up and up. There is no bubble" is almost a mantra to the inflation of a bubble. As I say, short memories, but then again that's what drives the market.

Wibbs

Atlantic Dawn wrote: »

Richard Curran did an interesting piece in the Independent during the week, I can see his point that it will be the lenders who are most at risk if PCP flops, the customer can simply walk away if they don't want the car at the end...

Yep. They'll be somewhat out of pocket, but it's more like renting and walking away. And unlike a house you don't need a car. Such a hit to lenders will have its own knock on effects though.

CIP4

Bought a demo car late last year and it was my first experience going down the car loan route always just bought my cars outright up until then. At the time I was very against PCP actually not as against it now. My trade in made up a 55% deposit so it really made no sense for me to go the PCP route as max deposit was 30%. SO I went HP over 2 years. Got the loan through VW bank and I think they checked me out reasonably well before giving me the loan. Done a credit check and got bank statement and came back with a few questions took nearly a week to be approved.

So to answer the question I don't think they are throwing loans at people either. For me before sign up to PCP you should at least know, How much deposit you are paying in terms of money / % of cars value, the interest rate, the monthly repayments (well everyone will know that one), Overall cost of the loan and the balloon payment.

The amount of people that don't know the answers to even half of them questions that have a car on PCP is unreal.

Most importantly realise that for the same interest rate a HP loan is cheaper over a 3 year period compared to PCP assuming the same deposit. This is because the big lump of money called the Balloon payment you pay interest on that full amount for the 3 years on PCP. No one seems to realise that one. I have even heard salesmen deny that too.

Marcusm

Looks like a slowdown will be coming in the UK as BoE has increased the capital banks need to hold against consumer loans. This will reduce the pace of growth (but not penalise homeowners the way an interest rate rise might). Initially it is seen as a negative for second hand car prices as a lot of PCPs will be handed back with no new car taken out. Over time those self same second hand prices will rise as people buy good 3 year old cars instead of cheap credit pushing them towards new ones.

Wibbs

Wibbs wrote: »

Yet 100,000 Irish homes are still in negative equity, so hardly higher then the crazy times. The market is adjusting back from when it tanked, driven by a different environment pressure now regarding supply. Runaway prices on any commodities bought on credit are never good, unless one is prescient enough, or rich enough to buy when everyone is selling after a bust and sell just before everybody else realises it's tanking again.

"House prices are going up and up. There is no bubble" is almost a mantra to the inflation of a bubble. As I say, short memories, but then again that's what drives the market.

You can't compare the situation now with the boom. Lending is very controlled, people are not being allowed borrow beyond their means or get loans for deposits. LTV limits are in place and there is no sign of demand being met for a long long time compared to the opposite at the end of the boom.

This "short memories" stuff doesn't make sense as things are very different now. I don't get the fear of credit either, used wisely is a brilliant tool. Only a fool would spend all their cash on a car when they can buy it with the banks money instead and pay it off gradually without losing their lump sum of cash in the bank. PCP offers low or 0% finance so is a great way to buy a car potentially saving you 1000's compared to a bank or credit union loan.

orm0nd

Wibbs wrote: »

That's a big factor alright. The government want "old" cars off the road as much as possible. The financial sector ditto. SIMI certainly do. Inflating the new market helps all of the above. The government can show off a "rising" economy and "market confidence", the finance sector are funding it and SIMI make hay. Insurance hikes on "old" cars are another pressure and IMHO not unconnected to this overall drive. The "green" and "safety" angle is heavily pushed in the usual government mouthpieces media sources. Even though the same gov takes cash off drivers of older cars to deem them fit roadworthy for the roads they don't want them driving on.

the gov. don't want old cars off the road, they want new ones sold for to collect the tax.

also they don't like low oil prices as their % take drops

Sam Kade

Wibbs wrote: »

That's a big factor alright. The government want "old" cars off the road as much as possible. The financial sector ditto. SIMI certainly do. Inflating the new market helps all of the above. The government can show off a "rising" economy and "market confidence", the finance sector are funding it and SIMI make hay. Insurance hikes on "old" cars are another pressure and IMHO not unconnected to this overall drive. The "green" and "safety" angle is heavily pushed in the usual government mouthpieces media sources. Even though the same gov takes cash off drivers of older cars to deem them fit roadworthy for the roads they don't want them driving on.

Which is greener keeping an older efficient car on the road longer or scrapping it and creating more waste and buying a new car that uses up resourses to get 15-20 mpg better fuel economy?
http://www.telegraph.co.uk/motoring/green-motoring/11187483/New-or-old-which-is-greener.html

PixelTrawler

When did PCPs get going? Im intresested in the glut of second hand cars that will hit the market...

Wibbs

orm0nd wrote: »

the gov. don't want old cars off the road, they want new ones sold for to collect the tax.

And how do they influence people to buy new cars? By getting the old ones off the road.

Sam Kade wrote:

Which is greener keeping an older efficient car on the road longer or scrapping it and creating more waste and buying a new car that uses up resourses to get 15-20 mpg better fuel economy?

Yep, that would be my thinking too. Manufacturing and transportation to market new cars leaves a pretty hefty environmental footprint. And this goes for "green" EV's too. Yes when the EV is used it causes less environmental damage(at least locally, until we go full renewable) but manufacturing them is not close to "green". The production alone of the lithium(among other things) in their batteries is very dirty.

Cars are just one of the bigger environmental impacts of our massive consumerist culture and worse that's getting not better. Mad to think that when Ford Model T's were first out one of their advertising copy lines was "the only car you'll ever need". Manufacturers could easily build cars that went on for many many years (and even today many cars will do just that) and be upgradable with new tech as it came along, but the consumer culture wouldn't buy into it.

Sam Kade

You have to laugh at these oversized suv's with an eco badge on it. All the eco badge does is make the buyer believe it is fuel efficient.

colm_mcm

Which oversized SUVs are these?

beauf

colm_mcm wrote: »

There's a lot of middle ground between a 10/15 year old car and a new car.

Yes but getting loan for a 5 or 7 yr old car that you can't pick exactly what you want, might have unknown issue. Over a PCP on a new when you can pick a low tax engine and insurance model.

Many people just want the least hassle for as long as possible.

kyote00

The production of Lithium batteries is also very dependant on cobalt. Cobalt is a by product from the production of copper and nickel. This will create a big production problems if EVs are ever to fully replace ICE.... or even reach the 2020 targets.

http://uk.businessinsider.com/r-electric-car-boom-spurs-investor-scramble-for-cobalt-2017-2?r=US&IR=T

Its also interesting that there were electric cars available at the time of the Model T. Detroit Electric and Ford had electric cars (Ford's wife was known to prefer the Detroit electric over a model t ...)

Wibbs wrote: »

The production alone of the lithium(among other things) in their batteries is very dirty.

Mad to think that when Ford Model T's were first out one of their advertising copy lines was "the only car you'll ever need". .

Someone I know got a Fiesta on PCP. They couldn't afford the deposit, which was a few grand, so got out a credit union loan for it. So now they are paying off a loan for the deposit and the PCP monthly. Baffling!

Atlantic Dawn

Lia_lia wrote: »

Someone I know got a Fiesta on PCP. They couldn't afford the deposit, which was a few grand, so got out a credit union loan for it. So now they are paying off a loan for the deposit and the PCP monthly. Baffling!

But with the cheappppppp tax they are making back multiples of what they are losing :pac:...in reality they may be back to a pushbike when the term ends.

Voodoomelon

PCP is cleverly done by the manufacturers, never has it been easier to confuse your potential customer that they can afford what you're trying to sell.

Customers should be under zero illusions that if a car costs €30,000, you're going to have to stump up at least €30,000 to get it.

That was the stumbling block for me, as stupid and as obvious as it sounds (maybe im the stupid one), I tried to convince myself for 3 months to get into a high spec 330e, did the numbers several times, visited the dealers twice, worked out the payments, balloon, depreciation curve etc etc and there was just simply no way to get away from the fact that i'd be handing out €55k for a car, no matter how I twisted the figures or tried to justify the monthly out goings.

I suppose I was putting the blinkers on when it came to the depreciation and the interest rate, its so easy to just look at the upfront costs and the monthly payment and kick the worries of the final payment down the road. It's also easy to justify large monthlys before you start paying them, as you're blinded by the product itself, convincing yourself how much you need it and great things will be when you own it.

Fast forward 3 months when the sheen as worn off an you suddenly have 33 months ahead of eye watering repayments to meet. I guess this is more of a commentary on my struggle with new car ownership full stop and not necessarily PCP itself, but those who are less numerically inclined or of lower willpower really need to look past the big bold letters and read the smaller ones.

Not to say i'll never own a new car, but at this stage of my life I opted out, despite the fact the dealers would have no problem letting me take one.

Toyotafanboi

Yeah, but just from the terminology you used, it doesn't sound like you couldn't afford it, you didn't want it.

If someone can afford it and understand it, it's a perfectly reasonable way to buy a car. Sure PCP is a salesmans tool but you can't hate it for that alone.

It's similar to a bill pay mobile phone. I want an S8, I don't fancy paying a €1000 up front for it. Go to Vodafone, pass a credit test, pay €150 down and get the phone for €50 A month across 24 months with some usage limits.

I get all the joys of the S8 immediately but an amount I can afford over a timeframe I find reasonable. At the end of the 24 months i can keep the S8 and reduce my bill a bit or throw in some cash and go for an S9.

Voodoomelon

Haha would you believe I went through the very same thing at the end of April with the S8 Plus on upgrade, couldn't justify it and stuck with my current phone.

I've no real problem with pcp, low rates make it very viable, it's just the way it's advertised and being pushed out there as a great way to get into a new car when in fact it makes it barely any cheaper than traditional methods notably for lower value cars. It really is structured to push a huge portion of the upfront price far enough into the future that hopefully it will convince a buyer that's on the fence to take the plunge.

ShadowHearth

Voodoomelon wrote: »

Haha would you believe I went through the very same thing at the end of April with the S8 Plus on upgrade, couldn't justify it and stuck with my current phone.

I've no real problem with pcp, low rates make it very viable, it's just the way it's advertised and being pushed out there as a great way to get into a new car when in fact it makes it barely any cheaper than traditional methods notably for lower value cars. It really is structured to push a huge portion of the upfront price far enough into the future that hopefully it will convince a buyer that's on the fence to take the plunge.

I think there is the issue.

Pcp is better and cheaper way to buy it, but if you cant afford 50k in the first place on a car, then pcp wont make it happen.

I did my maths, checked my buying power and figured out that my sealing is 26k ish where I can still feel comfortable and live normal life.
Yes, I would have loved lean cupra, but I cant afford as it would be around 37k. My ibiza cupra fitted my needs and budget perfectly.

Its stupid to blame pcp, if people themselves dont do home work and check their own strengh of income. When it comes to money and finances in Ireland its like my 8 year old rat: "Its not my fault!!!!!". Yes, it is fecking your fault, if you didnt do proper research, checked your finances, covered your own ass at some extent, before commiting to any financial commitment. Its a product like anything else. Not magic.

Just to add: I really doubt bmw, would give 50k car finance to someone who cant afford it. Its not like it was at Celtic tiger, where theu would give couple, who are both on dole a 400k mortgage.

R.O.R

Don't think of pcp as a way to buy a car, consider it as a long-term rental and it makes sense.

The aim shouldn't be to own the car, but to change at the end of the term and take another long-term rental agreement out.

John108679908

I'm currently working in an independent Garage in Waterford and have something to share.
Lot of independent mechanics and garages are closing due to PCPs and insurance refusing older cars-especially towards younger drivers.
I know of 4 separate mechanics in Wexford who are packing it in and even more around the Waterford area. Lots of younger qualifiied mechs lads going for work in factories.
Lots of the PCPs include warranty's dont allow independent mechanics to work as it's still owned by the manufacture until final balloon payment is made.
Know of a dealer who was servicing a 161 car and told him to take it to and independent mechanic for a small job, back to the dealer 2 weeks later with diagnostic light on and dealer said he had voided the warranty and he'd have to pay full whack for any further repairs.
Insurance Companies, Dealers and the RSA are colluding as a Cartel to force old cars off the road to sell new units that arent as reliable.
I know of several people who have nct their cars and are being refused insurance due to age, even though it;s being tested, they simply wont insure young drivers on old cars-as result they will never experience a reliable car and will be conditioned to driving pure crap.
161 new Merc was out for a month and had to be recalled due to turbo problem after 10,000km, now if they cant get the turbo right-what hope is their for rest of car.
I also have first hand info of RSA coming down hard on the lads in the NCT centres for not failing enough "older cars", even though theyre more reliable than those German computers on wheels.
Any questions and i will answer the best i can.

Toyotafanboi

Kind of yeah, but also kind of no.

BraveDonut

Considering going the PCP route this year.

What I have always done is borrowed to buy a decent used car and once that loan is paid, usually over 3 years, get a new loan and change up.

It seems to make sense to me since the current car will form the deposit, payments are about the same and I plan to continue with a new car in 3 years time.

I will always have car payments and this way I get to drive a new car.

What am I missing?

TheShow

The responsibility is not just on the lender, the borrower also has a responsibility here. If you know in your heart and soul that you can't afford another monthly payment but go ahead anyway, then you are responsible for your own demise, just as much as the loose lending practices.
I am in the process of going through VW bank for a new car on PCP, and working in the banking industry myself I would say the credit assessment is not robust.
The lady in the dealers asked my what my monthly salary was, and if I was a homeowner. I presume this gets plugged into some credit scoring algorythym along with an ICB check. An hour later I was "Approved". No bank statements, payslips etc required. This is mainly because PCP/Hire Purchase etc is not governed by legislation in the same way normal personal loans are where there is a legal requirement on the lender to prove affordabilty.