willyfones
Registered User
- Messages
- 39
Maybe it's just me but I have no idea what this actually means.
Certainly a credit bubble in the PCP market, and yes it definitely will burst. They have a fairly slick operation in the car garages, take it for a test drive,, a quick bit of paperwork and it's yours. The alarm bells ring of course when you see the Central Bank NOT including this in the upcoming CCR credit rules for lending. I know someone who is looking to borrow to pay down the balloon payment,,, so they paid a deposit on a car (they don't own - the garage does) It depreciates 10% a year,, then they borrow down the line to finally own the car... makes no sense.
Certainly a credit bubble in the PCP market, and yes it definitely will burst.
They have a fairly slick operation in the car garages, take it for a test drive,, a quick bit of paperwork and it's yours.
so they paid a deposit on a car (they don't own - the garage does) It depreciates 10% a year,, then they borrow down the line to finally own the car... makes no sense.
...Maybe it's just me but I have no idea what this actually means.
Most people know the 3 options at the end of the deal at this stage.
If the buyer "goes again" they will be offered a lot less than the GFMV if they trade in for a new car
They do and when the CPCC's best explanation for option 3, which is to use the car to roll in to a new PCP, is this:
The equity you have built up in your monthly repayments and the difference of the GMFV is what you put towards the new car. All you have to put towards the new deposit is whatever equity you built up from the first PCP
I despair and I still have no idea what it means.
The irony !!! When is a " Guarantee" not a guarantee? Only with a PCP. I have personally never come across a financial product that is so shady and I wouldn't touch it with a barge pole. And of course the product is peddled by car salesmen. Enough said.
Another warning from the Indo this morning
The dealer / finance will be on the hook initially as the GFMV will be higher than the car is worth.
If I traded in a car / provided a desposit and made repayments for 3 years I think it would sicken my craw if I then had to take out a new loan for the car outside my door.
I have personally never come across a financial product that is so shady and I wouldn't touch it with a barge pole.
Hi Leo,Unless the car is in a really bad way or is just a really unpopular model/ spec, the GFMV will be lower than the market value of the car. The car would have to lose over 60% of its value over the 3 years. Take a look at second hand prices for the more popular models here and you'll see they are retaining significantly more than that.
I don't get this. So you buy a car valued at say €30k, pay a deposit of €6k, make ~€15k repayments over 3 years and you somehow feel bad that you have to pay the balance?
I have a feeling the garages are keeping the prices of 2nd hand cars artificially high. If you check out what you can bring the same (or better) car in from the UK for the prices seem way out of whack to their true market value.
I think a lot of people don't really think about the balloon payment too much when taking out a deal like this. If/when they need to pay for this I'm sure it would leave a sour taste in the mouths of a lot of people.
2017 new car sales have dropped on last year.
I wonder, i.e. speculate!, has the penny dropped with PCPs and people are not "going again" with those 141 cars???
I've worked out the numbers on a few options for different brands, and looked at what the 3-year-old examples of the same models are going for. In all cases, unless the dealers are offering significant discounts on the new car, the obvious choice is to hold on to the car and pay-off or finance the final payment.
I suppose it just I understand it, the advantages and disadvantages so that's probably why I'm calling it simple.
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