What percentage of new cars on the road are finance based payments

euser1984

There's quite a few 181's about the place.

Lots of construction, lending etc.

Would be great if someone has something on this....thank you very much

Rackstar

It’s all about the 182s now.

There was a thread on this a while back with a poll which gave a good insight.

euser1984

yip, i know but there ain't too many 182's around yet....seems you can tell the state the economy is in depending on how many financed cars there are??

i'll try and get that poll, never really got searching this forum right

EPAndlee

Most dealers I've talked to say their sales are down a lot on last year. All seem to be blaming UK imports

euser1984

actually, if I might put this out there....

is it not better even if you have the money to buy the financial plan anyway if you believe in the economy to hold onto your principle - you can give the car back at anytime.


i'm not actually talking about me here because i did buy a new car with cash/draft recently and i'm thinking the finance choice would be the better option because even if the economy goes bang you can just give it back?? are maybe there are massive charges for this kind of thing?

it just seems to be the most logical choice from a business type persepective....i'm not saying i would need to give it back, but you always have your option then! perhaps you might even just want an upgrade

DaveyDave

I've seen a few articles about how the bubble is going to burst on PCP financed cars from the likes of the Journal.

A large number of cars are financed, I believe the majority of them are. Is there people out there who are probably struggling to pay for their car? Probably. It's not limited to PCP though.

The thing that bugs me the most about the finance bubble going to burst is that people have been financing their cars for decades. Before PCP was a thing people would get new cars every 2-3 years regardless. It's nothing new, PCP is just another way to do it.

I believe there was an article suggesting PCP was a very large number of car sales this year.

Yes, if you have cash you're better off going finance anyway so you have more money available on hand and the interest rates are rather low. It's good to have if something comes up and if you have the cash you're obviously well off enough to pay monthly payments.

euser1984

well i am bringing this up because i bought it off a large dealership, and they were shocked that I was paying them with a draft, do dealers normally say he paid with cash when something like this happens?

i was more shocked at the amount of the cars out there on monthly payments than anything else.

this is going to a bad place fast - a very uncertain era ahead of us imo

euser1984

EPAndlee wrote: »

Most dealers I've talked to say their sales are down a lot on last year. All seem to be blaming UK imports

are these pcp plans available on the imports too?

TallGlass

EPAndlee wrote: »

Most dealers I've talked to say their sales are down a lot on last year. All seem to be blaming UK imports

Nah, it's the reg plates. We need to now have 1-4. 1,2,3,4. Bring up sales. Sure 9 is an awfully unlucky number.

euser1984

TallGlass wrote: »

Nah, it's the reg plates. We need to now have 1-4. 1,2,3,4. Bring up sales. Sure 9 is an awfully unlucky number.

don't get what this means, but you might know about the special registration plates like 1 which is used for city mayors I believe?

Does the count for each county normally start at 100? thanks

Toyotafanboi

euser1984 wrote: »

actually, if I might put this out there....

is it not better even if you have the money to buy the financial plan anyway if you believe in the economy to hold onto your principle - you can give the car back at anytime.


i'm not actually talking about me here because i did buy a new car with cash/draft recently and i'm thinking the finance choice would be the better option because even if the economy goes bang you can just give it back?? are maybe there are massive charges for this kind of thing?

it just seems to be the most logical choice from a business type persepective....i'm not saying i would need to give it back, but you always have your option then! perhaps you might even just want an upgrade

That's a fairly logical view, particularly if you get a low APR.

Why would you the all your capital up in a depreciating asset? I can't think of many logical reasons. Sure you "own" it immediately but if you have the ability to buy it out (or buy most of it out) at any time then does that really matter?

It takes all the risk out of the purchase and you're only paying the cost of the APR to protect your capital.

EPAndlee

TallGlass wrote: »

Nah, it's the reg plates. We need to now have 1-4. 1,2,3,4. Bring up sales. Sure 9 is an awfully unlucky number.

I dont agree with splitting the into two. If you've two cars a 171 and 172 both identical, the price difference will only be a couple of hundred. When you get to 151 and 152 there's basically no price difference

jacksie66

This post has been deleted.

Toyotafanboi

Having a new car is nice too though, lots of people aren't reg plate snobs too and if they are earning a few quid it's just nice to have a new or new ish car.

Indricotherium

Toyotafanboi wrote: »

Having a new car is nice too though, lots of people aren't reg plate snobs too and if they are earning a few quid it's just nice to have a new or new ish car.

100%

I can't understand why so many posters find this attitude totally unreasonable.

jacksie66

This post has been deleted.

Indricotherium

jacksie66 wrote: »

Don't get me wrong I'd love a new car. But I love my Saab. I'll keep it until I get bored of its 210hp..

Don't get me wrong, my second car is something similar. But I still like a newish car for the family.

MarkN

Indricotherium wrote: »

100%

I can't understand why so many posters find this attitude totally unreasonable.

... on a motoring forum!

euser1984

Indricotherium wrote: »

100%

I can't understand why so many posters find this attitude totally unreasonable.

nothing like a warranty, a tight chassis and a phone call if you have any problems at least

euser1984

jacksie66 wrote: »

Bought my 2006 Saab 9-3 2.0 petrol turbo back in March for 1000 euro. Car is mint and puts a smile on my face everytime I drive it. Apart from the tax it's pretty economical to run. I got a new well paying job a few months ago. The amount of people who said I should buy a new car on finance is staggering. Get into huge debt to save a few bob a year on tax and fuel. No thanks.

i think a sum up of what was said earlier on is the more money you can get off the bank the better as long as your have protection (like a limited company) and buy out isn't too bad..

Heres Johnny

I prefer to have as nice a car as I can rather than as new as I can.
And the cars I like are too expensive new for me to justify the monthly payments would be on a par with my mortgage.
But that's just me.
I like that the girlfriend has a new car, she is not into cars it's just reliability for her.
So each to their own really.

euser1984

Heres Johnny wrote: »

I prefer to have as nice a car as I can rather than as new as I can.
And the cars I like are too expensive new for me to justify the monthly payments would be on a par with my mortgage.
But that's just me.
I like that the girlfriend has a new car, she is not into cars it's just reliability for her.
So each to their own really.

fair play to you with this attitude because i don't think it's so common in ireland

euser1984

DaveyDave wrote: »

I've seen a few articles about how the bubble is going to burst on PCP financed cars from the likes of the Journal.

A large number of cars are financed, I believe the majority of them are. Is there people out there who are probably struggling to pay for their car? Probably. It's not limited to PCP though.

The thing that bugs me the most about the finance bubble going to burst is that people have been financing their cars for decades. Before PCP was a thing people would get new cars every 2-3 years regardless. It's nothing new, PCP is just another way to do it.

I believe there was an article suggesting PCP was a very large number of car sales this year.

Yes, if you have cash you're better off going finance anyway so you have more money available on hand and the interest rates are rather low. It's good to have if something comes up and if you have the cash you're obviously well off enough to pay monthly payments.

the high availability of these pcp contracts reminds me of the real estate boom, only about 10+ years ago.

Where's the pcp problem? Worst case scenario loads of folk hand back their cars and the cars are likely worth just about more than what's owed on them as the pcp deals generally are structured so almost 60% of the value us paid over 3 years.

bazz26

People fear what they don't truly understand.

Indricotherium

euser1984 wrote: »

the high availability of these pcp contracts reminds me of the real estate boom, only about 10+ years ago.

No one Is expecting a car to be worth more than they paid for it in 4 years.

euser1984

regarding pcp? you can't give everyone out cars so easily when they could lose their jobs and not be able to pay them back.

those bank loans or financial loans could go into default easily creating more bad debt for the bank. The banks are still trying to move non performing loans of their portfolio the last time I heard.

Did this happen in greece already with german cars?

JJJJNR

The central bank warned about the amount of debt out on cars is running at 2.8 billion, that is a debt bubble, there will be a point were anyone who can afford a new car on PCP already has one and its getting there.

Its fairly patronising to say people fear what they don’t understand, just because they dont subscribe to the normal sheep mentality but maybe they do understand the situation and opt out. That's a lot of money to have out on loans, given we are running global debt at pre- recession levels I would say a correction is on the cards. I could be wrong as I think trump will save us from that.

euser1984

jacksie66 wrote: »

Bought my 2006 Saab 9-3 2.0 petrol turbo back in March for 1000 euro. Car is mint and puts a smile on my face everytime I drive it. Apart from the tax it's pretty economical to run. I got a new well paying job a few months ago. The amount of people who said I should buy a new car on finance is staggering. Get into huge debt to save a few bob a year on tax and fuel. No thanks.

congrats on the new job - finance does make sense if you have yourself protected...get everything the bank will give you if you are protected - cos the whole thing might fall apart soon anyway.

Toyotafanboi wrote: »

Having a new car is nice too though, lots of people aren't reg plate snobs too and if they are earning a few quid it's just nice to have a new or new ish car.

regarding reg plate snobs it makes economical sense to change your car every 2 years or 3 years. After that and the value drops fast....there is logic to alot of those owners...i'd imagine those pcp plans are 3 years anyway?

the warranties are setup to encourage you to upgrade.

is bmw still only 2 years?


I just look at it like an annual cost to have the car - just like the car tax fee

euser1984

JJJJNR wrote: »

The central bank warned about the amount of debt out on cars is running at 2.8 billion, that is a debt bubble, there will be a point were anyone who can afford a new car on PCP already has one and its getting there.

Its fairly patronising to say people fear what they don’t understand, just because they dont subscribe to the normal sheep mentality but maybe they do understand the situation and opt out. That's a lot of money to have out on loans, given we are running global debt at pre- recession levels I would say a correction is on the cards. I could be wrong as I think trump will save us from that.

the global financial system is a debt based system...as a business you get as much as you can off them and put your profits somewhere else, like a different limited company. the debt is restricted to your business if the banks come off ya to take your house and everything.

in my limited understanding the limited company can just be put into receivership and get the debt written off.

AndrewJRenko

JJJJNR wrote: »

Its fairly patronising to say people fear what they don’t understand, just because they dont subscribe to the normal sheep mentality but maybe they do understand the situation and opt out.

I know one distant family member who upgrades every year to a car that looks to be way beyond his visible means (new Qashqai, works on a CES scheme in a church/parish). He has no understand of cost of borrowing, APR, depreciation, ownership terms. He just knows what he has to pay each week, and he decides that he can live with that.

euser1984 wrote: »

regarding reg plate snobs it makes economical sense to change your car every 2 years or 3 years. After that and the value drops fast....there is logic to alot of those owners...

There's no logic in it. Depreciation is highest in the first year or two. The value drops most when you drive the car out of the garage.

From http://www.klipnik.com/used-cars/buying-tips/why-buy-used-avoid-the-hidden-costs-of-buying-new/

euser1984

AndrewJRenko wrote: »

I know one distant family member who upgrades every year to a car that looks to be way beyond his visible means (new Qashqai, works on a CES scheme in a church/parish). He has no understand of cost of borrowing, APR, depreciation, ownership terms. He just knows what he has to pay each week, and he decides that he can live with that.

There's no logic in it. Depreciation is highest in the first year or two. The value drops most when you drive the car out of the garage.

From http://www.klipnik.com/used-cars/buying-tips/why-buy-used-avoid-the-hidden-costs-of-buying-new/

Yeah, of course it drops when ya drive it out but ya have to drive it for a while if your gonna get it

if you want a new car - and the best value - you need to change iatleast every 3 years but it will cost the same if you change in 2 years; hence bmws 2 year warranty...

euser1984

AndrewJRenko wrote: »

I know one distant family member who upgrades every year to a car that looks to be way beyond his visible means (new Qashqai, works on a CES scheme in a church/parish). He has no understand of cost of borrowing, APR, depreciation, ownership terms. He just knows what he has to pay each week, and he decides that he can live with that.

Even though he is on a CES scheme, how do you know his circumstances financially to make a judgement like that? this is not intended to be argumentative but this is a culture problem Ireland has; this behaviour stretches the poor vs wealth divide.

what bank manager would buy a new car for someone like that?

euser1984

Augeo wrote: »

Where's the pcp problem? Worst case scenario loads of folk hand back their cars and the cars are likely worth just about more than what's owed on them as the pcp deals generally are structured so almost 60% of the value us paid over 3 years.

The problem is when loads of people lose their jobs that are on these pcp contracts will turn a big slice of that 2.8 billion worth of loans into bad debt. (debt that will never be paid back) It's the same as the real estate crisis; but it's somewhat easier to sell houses than old cars in huge transactions like nama are still doing - it's taking them years to move all this ****ty stupid debt, there still at selling off portfolios as is if they were withered dutch tulips

given that we live in a globalised world, the real question is not Irelands loans, it's about the western worlds debt - $******** exponentially squared. The interest rates should have been changed years ago. but people and business are getting huge unregulated loans - in ireland anyway...

some big houses being built here at the moment - then again all anything would be considered big these days; but these ones are big.

call it crude but savvy investors and business people are taking what they can - even though they know the bank will not get the their money back (this is human nature though and you might aswell join the sheep seeing as you can't stop them)....the bankers even know it - all they want to do is boost quarterly profits for investors to maintain confidence in this economic forward push that's going on - all created via debt.

the big difference is that they don't have the option this time to be saved....


i'm not on this forum with a political agenda or anything - just to be myself is all.

EPAndlee wrote: »

I dont agree with splitting the into two. If you've two cars a 171 and 172 both identical, the price difference will only be a couple of hundred. When you get to 151 and 152 there's basically no price difference

I doubt many people do except the dealerships! And the dealerships react to what the customers are willing to pay. people just think the 172 has a bit more value than the 171 and it does actually give customers more value.

AndrewJRenko

euser1984 wrote: »

Even though he is on a CES scheme, how do you know his circumstances financially to make a judgement like that? this is not intended to be argumentative but this is a culture problem Ireland has; this behaviour stretches the poor vs wealth divide.

You're right, that the behaviour stretches the poor/wealth divide. And I'd be wary of drawing conclusions from anecdotes. All I can say is he's never had a job that pays more than minimum wage, and spent long periods on the dole. His missus has done cleaning work from time to time. His kids are working now, so maybe they're handing up a pile of money, but I doubt it tbh.

euser1984

AndrewJRenko wrote: »

You're right, that the behaviour stretches the poor/wealth divide. And I'd be wary of drawing conclusions from anecdotes. All I can say is he's never had a job that pays more than minimum wage, and spent long periods on the dole. His missus has done cleaning work from time to time. His kids are working now, so maybe they're handing up a pile of money, but I doubt it tbh.

ireland is blanketed in fraud - i've seen it first hand and i'm aware of it happening all over the country, full of monopolies too.

euser1984

AndrewJRenko wrote: »

You're right, that the behaviour stretches the poor/wealth divide. And I'd be wary of drawing conclusions from anecdotes. All I can say is he's never had a job that pays more than minimum wage, and spent long periods on the dole. His missus has done cleaning work from time to time. His kids are working now, so maybe they're handing up a pile of money, but I doubt it tbh.

Be careful mate - you will be a happier person if you make yourself aware when you are making a judment of somebody. The last sentence that you wrote there is what I'm referring to.

Some people do buy cars for their parents to look after their health, and sometimes they think about their parents before themselves; as far as getting a better car for their parents than even themselves.

colm_mcm

euser1984 wrote: »

if you want a new car - and the best value - you need to change iatleast every 3 years but it will cost the same if you change in 2 years; hence bmws 2 year warranty...

Can you explain this part a bit more, I’m not getting what you mean

AndrewJRenko

euser1984 wrote: »

Be careful mate - you will be a happier person if you make yourself aware when you are making a judment of somebody. The last sentence that you wrote there is what I'm referring to.

Some people do buy cars for their parents to look after their health, and sometimes they think about their parents before themselves; as far as getting a better car for their parents than even themselves.

I know well when I'm being judgemental, and I know that this is one of those times. And I know well that it is judgement based on incomplete information. His kids are also in minimum wage jobs - retail and childcare - so they don't have any fortunes to bring. I doubt there is any fraud involved tbh, just over-enthusiastic garage salesperson combined with a lack of financial nous.

euser1984

colm_mcm wrote: »

Can you explain this part a bit more, I’m not getting what you mean

You set your cost per annum to own the car - just like the way you have you annual car tax or insurances fees.

So, lets say you buy a car that's is 30k or something....that I think costs 5000 per year....

keep it for the 2 years or 3 years and then the depreciation will fall more in the 4th year....so you get ur new car at the end of the period.

your payments should continue at 5000 a year....if you kept the car the fourth year (and I not sure about exact depreciation values here) then it would cost you more than 5k to keep. A new one should still be 5k a year....you can upgrade every 2 years or 3 years and it still keeps at 5k per annum

BMW prefer their customers to upgrade every 2 years so they only offer the 2 year warranty instead of a 3 year, which is fair enough really if lots of people like used bmw's....but the warranty is still out after 2 years....and bmw genuine parts are very expensive.

all in all if you can afford new it makes more sense

euser1984

the idea is that you have only initial lump payout to buy the car new.

from then on into the foreseeable future your car will always cost 5k per annum...

but even if you have the cash, the financial plans make a lot more sense....just make sure they don't come after your house keys

colm_mcm

euser1984 wrote: »

You set your cost per annum to own the car - just like the way you have you annual car tax or insurances fees.

So, lets say you buy a car that's is 30k or something....that I think costs 5000 per year....

keep it for the 2 years or 3 years and then the depreciation will fall more in the 4th year....so you get ur new car at the end of the period.

your payments should continue at 5000 a year....if you kept the car the fourth year (and I not sure about exact depreciation values here) then it would cost you more than 5k to keep. A new one should still be 5k a year....you can upgrade every 2 years or 3 years and it still keeps at 5k per annum

BMW prefer their customers to upgrade every 2 years so they only offer the 2 year warranty instead of a 3 year, which is fair enough really if lots of people like used bmw's....but the warranty is still out after 2 years....and bmw genuine parts are very expensive.

all in all if you can afford new it makes more sense

Still doesn’t make any sense. Also BMW PCP deals are over 3 years.

Depreciation gets smaller as the car gets older.

AndrewJRenko

euser1984 wrote: »

your payments should continue at 5000 a year....if you kept the car the fourth year (and I not sure about exact depreciation values here) then it would cost you more than 5k to keep.

Why would it cost you more to keep in the fourth year? You wouldn't generally be into any significant maintenance costs at that stage. That's where you can start being a car owner WITHOUT having significant monthly payments coming out.

euser1984

colm_mcm wrote: »

Still doesn’t make any sense. Also BMW PCP deals are over 3 years.

Depreciation gets smaller as the car gets older.

fair enough about the pcp stuff because I only heard about it recently; i know that bmw used to offer a 2 year warranty.

I don't think it matters if the depreciation gets smaller it's still more than 5k a year

euser1984

AndrewJRenko wrote: »

Why would it cost you more to keep in the fourth year? You wouldn't generally be into any significant maintenance costs at that stage. That's where you can start being a car owner WITHOUT having significant monthly payments coming out.

it will still cost you more than 5k....so why would you if a new one is going to be bang on 5k again

AndrewJRenko

euser1984 wrote: »

it will still cost you more than 5k....so why would you if a new one is going to be bang on 5k again

Are you saying that you're still making PCP payments in year 4? If not, what's the €5k made up of?

euser1984

AndrewJRenko wrote: »

Are you saying that you're still making PCP payments in year 4? If not, what's the €5k made up of?

the 5k is is the cost to pay for the car each year, after your initial principal is paid - it only really works if you have the cash or have the ability to bail out the cost of ending the contract....are there pcp schemes for 4 years - perhaps the asian imports with their long warranties retain their value on the used market better.

AndrewJRenko

euser1984 wrote: »

the 5k is is the cost to pay for the car each year, after your initial principal is paid

But for how many years? How many years are you paying the 5k p.a. before you own the feckin thing?

euser1984

AndrewJRenko wrote: »

But for how many years? How many years are you paying the 5k p.a. before you own the feckin thing?

That's a psychological thing people never get over it seems in ireland....you should decide not to own something that will rust eventually - or anything big that loses it's value over time

AndrewJRenko

euser1984 wrote: »

That's a psychological thing people never get over it seems in ireland....you should decide not to own something that will rust eventually - or anything big that loses it's value over time

But PCP contracts are for defined periods, right? Whether 3 or 4 or 5 years

euser1984

AndrewJRenko wrote: »

But PCP contracts are for defined periods, right? Whether 3 or 4 or 5 years

get the 3 year one for the best deal then.