Maybe I am nuts, but.. If you pay 2.5k up front then 200 a month for 2 years that's 7 grand for 2 years. Or, 3.5 grand a year. Why wouldn't you just down 3 or 4 grand on a car and keep it 3 years?
What an I missing? Is it just that people want to drive a new car?
Looks like inflation (on houses) is killing the new car market (as well as others), people can't cut back on the house or rent, and that's either gone up or going up, so anything expensive after that is going to take a kicking. So, new cars (the more common, mass sold type) are having to move with the market, so are basically deflating (via 0% finance deals and massive discounts, loads of these around).
Some of the more prestige brands, seem to be not interested in putting out good offers, so seem to be slowing production (Porsche are doing this), to protect the brand until sunnier skies. They're basically taking a small hit now, rather than a big one down the line.
Baloon figures on PCP's look really low at the minute, some around 40% after 3 years, which is basically manufacturers insuring against people handing cars back which depreciate like a stone. It's not really going to work like insurance though, as they're selling at 0% with discounts, but they seem to be taking what they can get.
Second hand cars are on like 7%-12% finance still, never going to see those at 0%, so that's not going to improve anytime soon either (**** started falling out of that a long while back, and is still going). New cars have to still compete with this market too though, to a degree.
Normally I would be against leasing, as it's often just gifting away equity, but lease companies are struggling too by the looks of it and need business. There look to be some unreal lease deals around at the minute on over produced cars, so they seem to be buying up new cars, and assuming that they're going to be worth more than the actual car makers seem to think they're going to be worth in 3 year, seems risky, but that's their risk. I can see a lot of these companies going broke if the used market doesn't recover.
I'll be in the market for a new car in 6 months, as I'll likely be handing mine back worth less than the baloon figure was. There will be plenty of manufacturers taking a hit on things like this. Next car I might look at something decent and try and string that 0% finance out for as long as possible, or just get something cheaper which has depreciated like a stone.
) scratching it.
