27-07-17, 05:37 AM
These car & bike dealers are in a win-win situation with PCP deals. They are able to secure sales to customers barely able to afford them, offering a small initial deposit & say 3 years repayments at a relatively low level. Most buyers I imagine would be looking at a new replacement vehicle after this period rather than stumping up several grand as a final payment on their now much reduced in value vehicle. So another new car or bike on the good old PCP.
There have been severalwarnings issued recently about record levels of individual debt & its only a matter of time til they raise interest rates for borrowers which will be the final straw for many currently living way beyond their means. Result: economic depression/stagnation and reduction in sales leading to market flooded with unsold new/second hand(pre owned as they like to say!) vehicles.
Cash buyers currently seen as a nuisance by many dealers will have their day & be able to strike a good deal as traders cash flow dries up in a much reduced market..
I have a theory that the government has permitted ,indeed encouraged ,debt to keep the the countrys tills ringing -you only have to look at the abysmal rates offered to savers. My building society has reduced their interest rates across the range of their accounts recently & is only paying 0.7% on limited access saver accounts-down from 0.85% previously. Without credit sales the true extent of the countrys situation would become apparent. Simple economics dictate that this situation cannot go on indefinitely and sooner or later we will once again enter the "bust" phase of the good old "boom & bust" cycle.
There have been severalwarnings issued recently about record levels of individual debt & its only a matter of time til they raise interest rates for borrowers which will be the final straw for many currently living way beyond their means. Result: economic depression/stagnation and reduction in sales leading to market flooded with unsold new/second hand(pre owned as they like to say!) vehicles.
Cash buyers currently seen as a nuisance by many dealers will have their day & be able to strike a good deal as traders cash flow dries up in a much reduced market..
I have a theory that the government has permitted ,indeed encouraged ,debt to keep the the countrys tills ringing -you only have to look at the abysmal rates offered to savers. My building society has reduced their interest rates across the range of their accounts recently & is only paying 0.7% on limited access saver accounts-down from 0.85% previously. Without credit sales the true extent of the countrys situation would become apparent. Simple economics dictate that this situation cannot go on indefinitely and sooner or later we will once again enter the "bust" phase of the good old "boom & bust" cycle.