I have just read a road test on Autocar on the new Skoda scala 1.5 tsi se spec. The writer states that the price of the car is over £21000, but then says that most people buy on pcp these days.
The cost to “ rent” the car for 3 years and 45000 miles with a £3k deposit is £337 a month. That works out at £15132, and at the end you hand it back or start again.
You can get a decent car for half that as a cash buy and at the end of 3 years it would still be worth something or even sold earlier if you got into money trouble.
It beggars belief that people who can’t really afford a new car are going in to these deals just to have a new car to use without really working out that they are really renting a car for a fixed term without any get out clause if they struggle with the payments.
A pcp may be the correct way of driving a new car for wealthier people, who have money to fall back on if the economy goes belly up, but for the majority I personally think they’re crazy.
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It’s autocar, take it with a pinch of salt
No one is paying list price for a Skoda Scala, they will be pushed out from around £12k before Christmas
In terms of the PCP, they will be heavily discounted and the monthly cost will be under £200 with the 3 year total being under £9k
Be amazed if a Skoda Scala retains 35% of its value at 3 years old
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Forgot to add , the Scala has no unique selling point
They should have priced it competitively as luxury budget from £12k
Surprised VAG have allowed Skoda to move into the ultra competitive mid range of manufacturers and compete with VW and Seat, a budget or even ‘value’ brand would have achieved greater sales
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People only think month to month. Try to show them the full cost and most just glaze over and look confused.
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People only think month to month. Try to show them the full cost and most just glaze over and look confused.
This goes back to my thread about people complaining about the finance they have been sold.
Teach kids basic arithmetic and some economics at school.
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I read that article too. The way they say virtually no one buys nowadays makes the uninformed reader think that PCP is the only way to go.
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Debt debt and more debt is the Modern Britain way. Big mortgage big car payment. Debt from education typically low salaries outside the South East we have never had it so good....
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The cynics would say that the finance companies like VAG, Ford and the others need to keep making cars so that they can sell their main product: finance.
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There are many people on low wages in the South East just as there are everywhere else in the country.
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I work in a small company with less than ten people, and at least three run cars on PCP paying about £3,000 a year for three years for a Citroen C3 or comparable. I bought a new Polo 95 SE for £14,000, and intend to keep it ten years. Even if I keep it only 7 years, that’s £2,000 per year. They say they like the fact that their car is always under warranty. I respect their choice, and they have the money to do that, we live once so why not. But my Yorkshire ancestry wouldn’t let me do that.
In a similar vein, I’m surprised by how many people rent a home, even when they have children and they are not young. I guess some people are not as concerned about money as me.
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Leif, if your colleagues bought DSG boxes and or modern Diesels, and kept them for 7 years (10 will likely be pushing it) then i have no doubt some bills will come along that could wipe out any savings by buying outright easily, let alone servicing replacement of friction materials tyres etc MOT costs, those costs with a modern car on a 3 year PCP plan would be not applicable or very minimal.
All in all i can see why people with little or no mechanical knowledge or those who can't or don't wish to get their hands dirty DIYing go for repeated long term rentals (whatever the plan might be called) instead of buying and trusting in total reliability.
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It's like winding the clock back to the heyday of RadioRentals and co in the 70s ("You'll be glued to our sets, not stuck with them!") In those long lost years of double digit inflation , industrial strife and uncertainty, it made sense for a lot of people to rent rather than buy big, new, sophisticated lifestyle accessories such as colour TVs and then video recorders. Fixed monthly payments, warranty included and a decent upgrade every couple of years: what's not to like? In a house share many moons ago the four of us got a rental package of tv, video, washer and dryer, which was a lot simpler than each of us buying one of the things.
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Leif, if your colleagues bought DSG boxes and or modern Diesels, and kept them for 7 years (10 will likely be pushing it) then i have no doubt some bills will come along that could wipe out any savings by buying outright easily, let alone servicing replacement of friction materials tyres etc MOT costs, those costs with a modern car on a 3 year PCP plan would be not applicable or very minimal.
All in all i can see why people with little or no mechanical knowledge or those who can't or don't wish to get their hands dirty DIYing go for repeated long term rentals (whatever the plan might be called) instead of buying and trusting in total reliability.
Two manual petrol cars, one diesel auto BMW 4 series. I still hold that my way is much cheaper, but as I said, if people prefer PCP, why not. Incidentally, my VW Up did 130,000 miles on one clutch, one set of brake disks, two sets of brake pads, and one cam belt change. One of the best ways to reduce motoring costs is to take advanced driving lessons.
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In a similar vein, I’m surprised by how many people rent a home, even when they have children and they are not young. I guess some people are not as concerned about money as me.
Or don't have the money for a deposit for a house or can't get a mortgage
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24 month lease/contract hire smallest deposit and be comfortable with the monthly payment .
Just go for the special offers that are always available don't spec it up from the special offer and you will have cheap NEW car motoring.
Best to be unemotional about it and treat the deal like your buying white goods.
My son has just finished a Golf GTD 24months @ £155pm with £500 deposit and 10k miles per year all inc vat.
Returned with no additional costs @19250 miles.
Cheap motoring for a NEW car.
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Is servicing and consumables covered by the lease agreement.
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24 month lease/contract hire smallest deposit and be comfortable with the monthly payment .
Just go for the special offers that are always available don't spec it up from the special offer and you will have cheap NEW car motoring.
Best to be unemotional about it and treat the deal like your buying white goods.
My son has just finished a Golf GTD 24months @ £155pm with £500 deposit and 10k miles per year all inc vat.
Returned with no additional costs @19250 miles.
Cheap motoring for a NEW car.
That IS cheap..
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24 month lease/contract hire smallest deposit and be comfortable with the monthly payment .
Just go for the special offers that are always available don't spec it up from the special offer and you will have cheap NEW car motoring.
Best to be unemotional about it and treat the deal like your buying white goods.
My son has just finished a Golf GTD 24months @ £155pm with £500 deposit and 10k miles per year all inc vat.
Returned with no additional costs @19250 miles.
Cheap motoring for a NEW car.
That IS cheap..
It is! Sadly I do 25,000 miles a year.
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Exactly, Just what I was thinking.
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It never ceases to amaze me why so many people get themselves so wound up as to how other people finance their cars !
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It never ceases to amaze me why so many people get themselves so wound up as to how other people finance their cars !
Well, it doesn't matter until the.amount of bad debt affects the banks' ability to lend and stay solvent themselves.
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I think it is some form of cognitive dissonance. The people that get wound up about it really want to have a nice new car and know they could but their attitude to money prevents them from taking out the finance or buying the car as they value their liquidity. As a result they become frustrated that someone can have a car above their “status” by borrowing.
I appreciate this not the case for all many are just shocked by the rocketing price of a new car.
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Agreed, it seems a highly contentious issue for no good reason.
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Anyone who thinks a new car gives them status is deluded. A bucket of water and a chamois give an old car status, in my view.
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It's a bit like the measles vaccination issue.
Why should anyone worry about other people not being vaccinated as long as you are.
PCP and leasing deals have allowed manufacturers to push up the price of cars to sometimes ridiculous levels but many don't care because all they care about is a monthly payment. Those that wish to purchase are left with prices that either have to be haggled down vigorously or are left with the choice of pre- reg or nearly new.
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It's a bit like the measles vaccination issue.
Why should anyone worry about other people not being vaccinated as long as you are.
Sorry to be pedantic, but it's not at all like measles vaccination. There are a small number of children (those with impaired immunity, perhaps on chemotherapy for leukaemia) who cannot safely have measles vaccination, but who are serious risk if they contract measles. Measles vaccination isn't just to protect your own family, it is to give "herd immunity" and reduce the risk of contracting measles by everyone - but this can only be achieved if at least 95% of the child population is immunised.
Measles isn't a mild childhood disease - its a wretched illness with the potential to cause permanent brain damage or even death ... I speak from experience having worked in a hospital in the 1970s where 6 children died of measles in a 2 week period.
Deciding not to have your children immunised is really a very selfish decision
- rant over!
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It's a bit like the measles vaccination issue.
Why should anyone worry about other people not being vaccinated as long as you are.
Sorry to be pedantic, but it's not at all like measles vaccination. There are a small number of children (those with impaired immunity, perhaps on chemotherapy for leukaemia) who cannot safely have measles vaccination, but who are serious risk if they contract measles. Measles vaccination isn't just to protect your own family, it is to give "herd immunity" and reduce the risk of contracting measles by everyone - but this can only be achieved if at least 95% of the child population is immunised.
Measles isn't a mild childhood disease - its a wretched illness with the potential to cause permanent brain damage or even death ... I speak from experience having worked in a hospital in the 1970s where 6 children died of measles in a 2 week period.
Deciding not to have your children immunised is really a very selfish decision
- rant over!
That's the point I was trying to get across.
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In a similar vein, I’m surprised by how many people rent a home, even when they have children and they are not young. I guess some people are not as concerned about money as me.
Or don't have the money for a deposit for a house or can't get a mortgage
Obviously that’s often true, but I was thinking of some people I know who have the money but spend it rather than save.
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There are those for whom a car is a statement of status and position in the pecking order.
Some may want a new comfortable prestige car simply because of job or commute requirements - perhaps doing 25k+ miles per annum.
Personally I am unconcerned - I drive an 8 year old petrol Octavia - it is reliable, 50+ mpg, adequate performance, tolerably quiet and comfortable. It depreciates by around £100 a month. PCP cost to upgrade with a new prestige model would be 3 or 4 times the price!
I have no problem with people making their own challenges no matter how shallow their motives.
However I would object very VERY strongly if I ever have to contribute to unwinding a mis-selling scam (like missold insurance) because those who took out the deals were too stupid to think about what they were signing up for.l
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I've always tried to keep the monthly cost to less than about £100 including repairs and servicing and depreciation. Which means running reliable simple stuff rather than more interesting stuff my heart might prefer. It's been largely successful for me, keeping cars for several years unless they're trouble eg my last Octavia didn't meet my target. I could be tempted by a ridiculously cheap PCP deal at £100 a month or less when the time is right to run a very small car. My neighbour is running 3 vehicles on PCP costing nearly £1000 a month now that does seem a bit daft.
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