The Car thread - The Bear and Badger

mistercrayon

I used to be pro buying and anti leasing but a few experiences were transformative for me.

One time repairing my (Old) car it was About the same price as a years lease. On a money level it seemed stupid to pay annually the cost of something shit where I could get something nice.

Another time I heard a philosophy: buy what increases in value, rent what decreases.

Thirdly the warranty is something that is very important to me in part because it means there are less likely to be problems. I’d pay a premium to reduce going to the garage etc to get shit repaired.

Funkstain

Because these things interest me more than they should, I mocked up a quick spreadsheet to look at actual cost of ownership via several models (cash purchase, PCP, bank loan, new, nearly new, 2+ years old, mileage, etc). this takes into account actual asset value over time.

When you take into account PCP deposit contributions of (in some cases) over £4K and significant dealer discounting on top that, as well as the ability to pay off a PCP instantly with no or minimal penalty, overall cost of ownership (taking into account expected depreciation, warranty vs repair costs, etc) favoured buying new via PCP, and early repayment, which was very surprising to me - I expected it to be 2 year old+low mileage (warrantable issues worked out, depreciation hit taken etc).

It's yet another example of the advantages of being rich (relatively speaking) usually resulting in you having to spend less money overall, and widening the gap further.

Dinostar77

Still a helluva of lot of people out there who buy cars that are 15 years old / bangers / cheap runarounds because thats what they can afford or are willing to pay. None of this new shared ownership stuff will apply to them, becuase they will carry on buy 15 year old cars. I should know im one of them.

mistercrayon

I think in the future cars will be more like Automated called taxis. There’s no good reason for a car to be parked all day.

Funkstain

Funkstain wrote:

no ownership implies (to me) orders of magnitude fewer cars needing to be manufactured in total, with more of a temporary on demand model (why have a car stuck on a driveway 50%-75% or more of the time, which you're paying for by the minute, when you can just summon one locally within minutes?)

ahem

Bob

It’s not rocket science same as everything else once they’ve priced cheap car ownership out of the market they’ll turn the screws on the monthly payments

Leasing is essentially posh rental and you
Might as well burn your money

Dinostar77

Lol, posh rental. It has it place though. New motor, normally trouble free driving for a few years. Any issues get leasing company to sort it out. Then when you get bored get something else on lease. If you have the money spare and are happy to spend £200-£500 a month and build a deposit again for the next car lease then why not.

poprock

Dinostar77 wrote:

Still a helluva of lot of people out there who buy cars that are 15 years old / bangers / cheap runarounds because thats what they can afford or are willing to pay. None of this new shared ownership stuff will apply to them, becuase they will carry on buy 15 year old cars. I should know im one of them.

Not when the government makes it illegal to drive older cars on public roads, or just makes the taxation/fees punitively high. Emissions regulations, innit? You’re killing the planet young man.

This is the way it’s going. It’s all there in the government’s existing strategy. If I’m remembering this right, the strategy has been passed into law already, with target dates, meaning the government just has to decide how to make it happen.

Dinostar77

Like to see a government try that and remain in power. Blue collar workers and their Sun newspapers (sweeping generalisation) will be up in arms.

Tbf, wasnt it 2040 that all new cars produced had to be electric or something? If thats the case then the government cant expect to get rid of fossil fuel burners from our roads entirely until 2070s. Also what are they going to do with all the diesel freight and haulage vehicles that help run the country?

jdanielp

They were talking about moving it forward to 2032... Not sure how far that got yet though.

Bob

Dinostar77 wrote:

Lol, posh rental. It has it place though. New motor, normally trouble free driving for a few years. Any issues get leasing company to sort it out. Then when you get bored get something else on lease. If you have the money spare and are happy to spend £200-£500 a month and build a deposit again for the next car lease then why not.

Cos your essentially throwing your money away the same as Netflix

mistercrayon

All car owning is throwing money away.

The laws about electric cars is that no cars can be 100 percent non renewable. You can see a lot of token effort hybrids (light hybrids) like the ignis and I think the new puma.

Dinostar77

Johnny from fifth gear reviewed the new mk8 gti. You can probably guess the verdict. Not as good as the mk7 or mk7.5, too few physical buttons, also quality of cabin has been reduced. Which is not unexpected as moving the MQB platform to touchscreen cost VW alot of money as did the development work on the ID cars.

I do wonder how long it will be before we introduce legislation that states that touchscreens can only be operated when the car is stationary, the only caveat being using a MMI controller when driving.

afgavinstan

I really, really, really, really, cannot encourage the tit who names his channel "Car Pervert".

jdanielp

He was pretty good when he was co-presenting Fully Charged with Robert Llewellyn.

Bob

mistercrayon wrote:

All car owning is throwing money away.

The laws about electric cars is that no cars can be 100 percent non renewable. You can see a lot of token effort hybrids (light hybrids) like the ignis and I think the new puma.

Yes and no the point is you normally own something have something To show for
Your money.

Leasing companies are essentially openly ripping the piss out of you. Hey let us buy the car for less than you could possibly buy it for.

You pay all the depreciation.

Get nothing at all and we’ll sell it on to dealers for a profit at the other end.

Sound fair?

Let me
Bend over so I can have a bobbo spec new car on my drive!

Idiots

poprock

It’s no different to renting your home.

yourfavouriteuncle

Yeah, that’s bollocks.
For cheaper second hand cars you just buy how you can but as cars get more expensive you’re much better leasing. Unless the car is a collectible then it isn’t much of an asset to have. They get worse with age and cost more and more money as they get older whilst they also become worth less and less. So yeah in ten years time I might have something to show for it - but it’s definitely not an asset.

b0r1s

I leased my first car this year and apart from company cars had never been able to have a new car until now.

Also went PCH rather than PCP and it is much much cheaper. Got my maintenance plan separately as they can be a bit pricey on that.

Apart from crap timing as in buying before a global pandemic and it being stuck on the drive for months it’s been a great purchase.

Dinostar77

Leasing is massively important to the car industry. Without leasing the 2nd hand market would suffer. I used to work with a bunch of clever contractors and they all leased. The argument was simple, if you want to drive the newest cars, not worry about depreciation, or MOTs etc then lease. Its hassle free driving.

You see so many people in new plate cars nowadays that you know they are leases. I've seen cars parked in driveways of houses (standard 4 bed semis) i regularly walk past when taking my son out for a stroll, 19 plate M4, deffo a lease, 20 plate AMG A45S lease, Range Rover SVR, lease again. PCP these babies requires a helluva deposit and monthly payments never mind the depreciation hit by buying new.

Personally if i was in the situation where after all the bills were paid, money was put into savings etc and i had £700-£800 left over ever month (i wish). Then i could see myself giving leasing a go. Would be nice to have the latest greatest car to drive for 3 years then return it and get something else.

yourfavouriteuncle

If i have a spare £90k am i better putting it into a savings scheme or perhaps using it towards a business investment or actually maybe it would be a better use of my funds to give a Bob variant £90k up front for a flashy new Ranger Rover that loses £30k as soon as I’m off the forecourt?

Leasing and its various forms only really benefits the fairly wealthy i guess. It does seem to me like there may be some kind of 08 style sub prime crash once all these ‘luxury’ second hand cars that people couldn’t ordinarily afford start flooding the market. It seems the finance folk either hit it big or fail spectacularly or as more likely a scenario, hit it really fucking big for a few years, get the profits and dividends out and then scream for help when the empire crumbles around them.

b0r1s

But lease cars don’t all have to be stupid prices. Depends on your mileage of course but you can pick up Golfs and Minis from around £175 to £200 a month.

JMW

We’re leasing our new Leaf at about £180pm, incl. insurance for a brand new car which must be close to £30k. No deposit. I can’t see how any arrangement buying it can get near that.

b0r1s

Yep the dealer who was trying to sell me PCP was nearly 20% more for a less specced car and they wanted a bigger deposit. They kept trying to sell me on the flexibility of being able to get out of the finance deal part way through.

poprock

I’m probably missing something somewhere, but in my understanding the whole system has a big gap in the long term.

The drive towards leasing increases the number of people driving around in new cars.

Those cars don’t stay new. What happens to them? They drop on to the second hand market as ‘nearly new’ cars. Three years old, generally.

Those three-year old cars are still quite expensive, so dealers offer them on finance. Second-hand car buyers are taking on debt.

There aren’t as many second-hand car buyers, because more and more people are leasing new cars instead. So presumably there is a surplus of second-hand cars.

So where is that surplus? And why isn’t it driving the cost of second-hand cars down?

Are older cars, say six-year old plus, largely just dropping out of the market and heading straight to scrap? (And if so, should we all be getting into the scrap industry as a moneyspinner?)

JMW

I have a sneaking suspicion, as I try to ‘do the right thing’ by getting a new Leaf, that it’s made it worse. But it has Apple CarPlay, so I bury those thoughts.

yourfavouriteuncle

poprock wrote:

I’m probably missing something somewhere, but in my understanding the whole system has a big gap in the long term. The drive towards leasing increases the number of people driving around in new cars. Those cars don’t stay new. What happens to them? They drop on to the second hand market as ‘nearly new’ cars. Three years old, generally. Those three-year old cars are still quite expensive, so dealers offer them on finance. Second-hand car buyers are taking on debt. There aren’t as many second-hand car buyers, because more and more people are leasing new cars instead. So presumably there is a surplus of second-hand cars. So where is that surplus? And why isn’t it driving the cost of second-hand cars down? Are older cars, say six-year old plus, largely just dropping out of the market and heading straight to scrap? (And if so, should we all be getting into the scrap industry as a moneyspinner?)

This is what I’m getting at. That at some point there’s going to be a major correction in the auto market and it’ll trigger similar events to 08. The ginormo banks who will all be tied into the financing somewhere will flip their shit and another big society in it together austerity push will be accepted by the depressed masses.
The banks that over corrected on mortgage limits and who they’ll now lend to had to find themselves a new ridiculously profitable revenue stream and that was the auto market.

jdanielp

JMW wrote:

I have a sneaking suspicion, as I try to ‘do the right thing’ by getting a new Leaf, that it’s made it worse. But it has Apple CarPlay, so I bury those thoughts.

How is it? I did consider a new Leaf but given that I will be doing some lengthy road trips, it made sense to have the support of the Supercharging network. Plus a Tesla is undeniably cooler...

poprock

yourfavouriteuncle wrote:

The banks that over corrected on mortgage limits and who they’ll now lend to had to find themselves a new ridiculously profitable revenue stream and that was the auto market.

Also … It’s always cheaper to take a cash loan from your bank than car finance from a car dealer. So car dealers must be offering finance to people who haven’t compared, or are already overextended or deemed too high a risk by their banks.

The other scenario is what Boris described, where you take the harsh finance deal because the dealer only gives you the car/price you want if you do so.

So, to generalise, people are either overpaying or overextended. Neither are good long term risks for the lenders. It does smack of a financial industry repeating the mistakes it made with sub-prime mortgages.

Bob

Which is also a poor idea

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