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Car financing is going to cause the next financial crash Watch

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    Everywhere you look, there are people with extremely average jobs driving brand new 17 plate cars because of these financed pcp arrangements.

    Not only is it pretentious seeing people drive what they can't afford, they are going to cause the next financial crash.

    I can't believe I've just seen a new Golf R parked outside the most rundown terraced houses where all the chavs/druggies live. I'm literally taller than the houses' bottom windows and if I stretched i could probably reach the top windows, it's that small. The car costs almost as much as the house.

    My brother has the same Golf R but he bought it outright because he can afford to.

    I dislike what's happened to the car industry. Our country has gone to **** when actual peasants can drive around in brand new cars.

    If you finance a car because you can't afford it otherwise, you're a liability.
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    What's the problem if they can afford it? This type of financing is nothing new, don't overdramatise things.
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    (Original post by Anonymous)
    Everywhere you look, there are people with extremely average jobs driving brand new 17 plate cars because of these financed pcp arrangements.

    Not only is it pretentious seeing people drive what they can't afford, they are going to cause the next financial crash.

    I can't believe I've just seen a new Golf R parked outside the most rundown terraced houses where all the chavs/druggies live. I'm literally taller than the houses' bottom windows and if I stretched i could probably reach the top windows, it's that small. The car costs almost as much as the house.

    My brother has the same Golf R but he bought it outright because he can afford to.

    I dislike what's happened to the car industry. Our country has gone to **** when actual peasants can drive around in brand new cars.

    If you finance a car because you can't afford it otherwise, you're a liability.
    I plan to buy a Golf R when I'm older.... and when I have the money actual imbeciles. My next door neighbor is leasing a 2010 golf gti dsg which I know they haven't bought in full. They can do what they want but I find it so pointless and it would be unsatisfying for me driving around in a car that I don't own
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    (Original post by Xopher_)
    I plan to buy a Golf R when I'm older.... and when I have the money actual imbeciles. My next door neighbor is leasing a 2010 golf gti dsg which I know they haven't bought in full. They can do what they want but I find it so pointless and it would be unsatisfying for me driving around in a car that I don't own
    Leasing is actually quite cost effective. WoodyMKC
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    AngryJellyfish possibly Cars and Motoring, possibly a financial discussion forum - I'll let you make that call.
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    (Original post by IWMTom)
    Leasing is actually quite cost effective. WoodyMKC
    It's also a good choice if you want to keep the money in your bank instead of blowing it all. I don't have anything against anyone who does it but I can't see the point when you're tied to it for however many years your payments are. I like getting a sense of 'I earned this car' rather than 'I am earning this car'. Doesn't make much sense I know but I like owning things in full Like why I would never get a phone contract instead just pay for the whole thing (especially things priced that low)
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    (Original post by Xopher_)
    It's also a good choice if you want to keep the money in your bank instead of blowing it all. I don't have anything against anyone who does it but I can't see the point when you're tied to it for however many years your payments are. I like getting a sense of 'I earned this car' rather than 'I am earning this car'. Doesn't make much sense I know but I like owning things in full Like why I would never get a phone contract instead just pay for the whole thing (especially things priced that low)
    Leasing isn't the same as car financing such as PCP - you're hiring the car rather than purchasing it. With all your maintenance costs covered, including other running costs such as tax, it's a very cost effective solution.
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    (Original post by IWMTom)
    Leasing isn't the same as car financing such as PCP - you're hiring the car rather than purchasing it. With all your maintenance costs covered, including other running costs such as tax, it's a very cost effective solution.
    Leasing is pretty good but I'd rather own the car What car is Woody leasing then?
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    (Original post by Anonymous)
    Everywhere you look, there are people with extremely average jobs driving brand new 17 plate cars because of these financed pcp arrangements.

    Not only is it pretentious seeing people drive what they can't afford, they are going to cause the next financial crash.

    I can't believe I've just seen a new Golf R parked outside the most rundown terraced houses where all the chavs/druggies live. I'm literally taller than the houses' bottom windows and if I stretched i could probably reach the top windows, it's that small. The car costs almost as much as the house.

    My brother has the same Golf R but he bought it outright because he can afford to.

    I dislike what's happened to the car industry. Our country has gone to **** when actual peasants can drive around in brand new cars.

    If you finance a car because you can't afford it otherwise, you're a liability.
    I see where you are coming from and get your point but how do you know a lot of them arent company cars?
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    (Original post by Xopher_)
    Leasing is pretty good but I'd rather own the car What car is Woody leasing then?
    Understandable, but you'll be covering depreciation.

    I believe he drives a Ford Focus Titanium.
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    How do you know they are being paid for through PCP arrangements? Some of us have average jobs but spend more on a car rather than spending it on something else. I like driving a car that is reasonably comfortable and I take out car finance but pay it off quicker than the loan period so that I own it.
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    (Original post by IWMTom)
    Understandable, but you'll be covering depreciation.

    I believe he drives a Ford Focus Titanium.
    That's why I'd always buy used anyway, even though they do still depreciate, not as bad as the 30-45% over the first 3 or so years of a brand new car (depending on mileage of course). And the focus has nice mpg
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    The ignorance is making me laugh :lol: How do you think brand new cars even make it onto the market? Nobody buys a brand new car first-hand, it's a bad investment because it depreciates by a huge chunk as soon as you drive it. Someone leases the car, their contract is up, they hand it back in devalued and then someone buys it a few years old, for a significantly reduced price compared to when it was new.

    If you buy a car, you're not just paying the cost of the car. You're also paying repairs and maintenance when things inevitably go wrong with it, and it all adds up. If you buy it brand new, while there is a reduced risk of faults, you've paid full whack and lost out.

    If you get a good lease contract, with all insurance, maintenance, servicing and repairs included, you potentially save money all the while driving around in a brand new car, compared to buying used. For example, a while ago, I bought a 2000 reg Peugeot 206. I paid 700 for it. Another 1000 for insurance. Then if I had it in and out of the garage fixing the faults rather than driving it until it was no longer drivable... that would have been a few thousand pounds in total for the year that I owned it. If you're buying a newer car, you have to also think about depreciation i.e. not getting back what you paid for it.
    Now I'm leasing a brand new Fiesta Titanium. I pay 200 a month, which includes EVERYTHING - insurance, servicing, repairs, breakdown, the lot - apart from petrol. Just over 2 grand a year, it's brand new so worry free, I'm not invested in the car if it gets written off and overall it likely works out cheaper than running an old grunter and certainly works out cheaper than buying a newer used car cause you're gonna lose a few grand in depreciation by the time you've owned it a few years and that's not even including the repairs and maintenance costs.I also get to hand it back in after my 3 year contract and get yet another brand new car.

    So, really, it's not a poor financial option at all. There's a reason it's becoming more and more popular. It's pretty much a flat rate every month - if you don't make much money, the last thing you want is something to go wrong with it and you have to fork out a huge lump sum that you haven't got. If you've got a lease with maintenance package, you're safe in the knowledge that you won't have to come up with that lump sum - everything's covered in the monthly price. So you're saving yourself a lot of stress as well.

    So yeah, as I said, ignorance. Not only cost effective as IWMTom said, but also reliability and peace of mind which makes it even more worth the money. I consider myself pretty clued up on financial matters and I make a good chunk of my money from knowing how finances and markets work, and I'm never going to actually buy a car again if I can help it. Leasing is the future and it not only isn't going to leave people broke, but it's good for the economy because more money is going straight to the dealership and is taxed.

    EDIT: Noticed the title and thread content has been changed from "leasing" to "financing". My work here is done
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    It won't be of the same magnitude of the housing crisis. That was the result of securities fraud, where bad credited mortgages were bundled into complex financial products and sold of as triple A class (i.e. almost guaranteed to not default), fuelling house price rises and an endless cycle of borrowing to people who can't afford it ensued as you could just sell off these high risk loans as low risk loans.

    Yes financing at the moment is getting popular with cars, but luckily, the fraud aspect isn't there, so the damage will be contained.
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    (Original post by WoodyMKC)
    The ignorance is making me laugh :lol: How do you think brand new cars even make it onto the market? Nobody buys a brand new car first-hand, it's a bad investment because it depreciates by a huge chunk as soon as you drive it. Someone leases the car, their contract is up, they hand it back in devalued and then someone buys it a few years old, for a significantly reduced price compared to when it was new.

    If you buy a car, you're not just paying the cost of the car. You're also paying repairs and maintenance when things inevitably go wrong with it, and it all adds up. If you buy it brand new, while there is a reduced risk of faults, you've paid full whack and lost out.

    If you get a good lease contract, with all insurance, maintenance, servicing and repairs included, you potentially save money all the while driving around in a brand new car, compared to buying used. For example, a while ago, I bought a 2000 reg Peugeot 206. I paid 700 for it. Another 1000 for insurance. Then if I had it in and out of the garage fixing the faults rather than driving it until it was no longer drivable... that would have been a few thousand pounds in total for the year that I owned it. If you're buying a newer car, you have to also think about depreciation i.e. not getting back what you paid for it.
    Now I'm leasing a brand new Fiesta Titanium. I pay 200 a month, which includes EVERYTHING - insurance, servicing, repairs, breakdown, the lot - apart from petrol. Just over 2 grand a year, it's brand new so worry free, I'm not invested in the car if it gets written off and overall it likely works out cheaper than running an old grunter and certainly works out cheaper than buying a newer used car cause you're gonna lose a few grand in depreciation by the time you've owned it a few years and that's not even including the repairs and maintenance costs.I also get to hand it back in after my 3 year contract and get yet another brand new car.

    So, really, it's not a poor financial option at all. There's a reason it's becoming more and more popular. It's pretty much a flat rate every month - if you don't make much money, the last thing you want is something to go wrong with it and you have to fork out a huge lump sum that you haven't got. If you've got a lease with maintenance package, you're safe in the knowledge that you won't have to come up with that lump sum - everything's covered in the monthly price. So you're saving yourself a lot of stress as well.

    So yeah, as I said, ignorance. Not only cost effective as IWMTom said, but also reliability and peace of mind which makes it even more worth the money. I consider myself pretty clued up on financial matters and I make a good chunk of my money from knowing how finances and markets work, and I'm never going to actually buy a car again if I can help it. Leasing is the future and it not only isn't going to leave people broke, but it's good for the economy because more money is going straight to the dealership and is taxed.
    Fiesta, not Focus! I was close
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    (Original post by Xopher_)
    It's also a good choice if you want to keep the money in your bank instead of blowing it all. I don't have anything against anyone who does it but I can't see the point when you're tied to it for however many years your payments are. I like getting a sense of 'I earned this car' rather than 'I am earning this car'. Doesn't make much sense I know but I like owning things in full Like why I would never get a phone contract instead just pay for the whole thing (especially things priced that low)
    Sounds like you're confusing financing with leasing mate. With financing, which I see as a bad option because you're basically getting a loan off of the dealership at a markup to then buy the car off them, but you don't get to keep the car until the loan is paid. Leasing is basically renting, which as I detailed above can be very cost effective and I'm never going back to buying now, even though I have plenty of savings which are increasing and I could afford to buy a newish car.

    You're not tied to the car either, you just pay your monthly fee until the contract is over, then you hand the car back - if you can't afford it anymore, you can end the contract early in most cases.
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    (Original post by IWMTom)
    Fiesta, not Focus! I was close
    Same thing really, just scaled down, doesn't get closer than that
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    (Original post by WoodyMKC)
    Sounds like you're confusing financing with leasing mate. With financing, which I see as a bad option because you're basically getting a loan off of the dealership at a markup to then buy the car off them, but you don't get to keep the car until the loan is paid. Leasing is basically renting, which as I detailed above can be very cost effective and I'm never going back to buying now, even though I have plenty of savings which are increasing and I could afford to buy a newish car.

    You're not tied to the car either, you just pay your monthly fee until the contract is over, then you hand the car back - if you can't afford it anymore, you can end the contract early in most cases.
    I guess in a lot of cases it is better than buying right out, but at the same time I would like to work towards a car, not just give it back in the end
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    (Original post by Xopher_)
    I guess in a lot of cases it is better than buying right out, but at the same time I would like to work towards a car, not just give it back in the end
    Yeah, I mean all said and done it's all about personal preference. There are a lot of people that don't like the idea of paying money for something you don't get to keep (though these are often people who are renting their houses), but there are others who aren't bothered by that and realise that it's not only cost effective but also means getting something reliable. I hate driving around getting nervous every time I hear a strange noise thinking my car's about to break down :rofl: whereas since I'm driving around in something brand new that gets a free service once a year I'm not worried about that so it's all part of the package for me.
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    (Original post by WoodyMKC)
    Yeah, I mean all said and done it's all about personal preference. There are a lot of people that don't like the idea of paying money for something you don't get to keep (though these are often people who are renting their houses), but there are others who aren't bothered by that and realise that it's not only cost effective but also means getting something reliable. I hate driving around getting nervous every time I hear a strange noise thinking my car's about to break down :rofl: whereas since I'm driving around in something brand new that gets a free service once a year I'm not worried about that so it's all part of the package for me.
    It's a valid strategy seeing as cars are just money pots and owning one has no purpose, when you could just move onto a better and more reliable one, but cars nowadays are reliable even past the 100k mile mark if it hasn't been treated like ****, in which case it would be worth paying for the car in full instead of leasing, if you know what car you want to own for a lifetime. I think fixing things that go wrong with your car is part of the experience as well, even though it would rarely come to that extent
 
 
 
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