I thought I would start this thread as the polar opposite to the other current thread "Never a better time to buy - if you have money"
Because if discussing it saves a few people from being tempted due to low car prices and brushing aside the credit and current economic risk issue..... surely that`s good.
Question,
Would you really feel safe, currently, borrowing on credit for a car you didn`t actually need?
Let`s hear the caution from the wise and experienced - a little insight or stories of what has happened to people you know, or have heard of, who have overstretched or encountered bad luck with `credit` car purchase and motoring.
oilrag
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If you have the cash, it could be better to get hire purchase rather than buying, as you could make more money on investing the cash in other currencies or rock bottom shares than the finance charges. Sterling will probably collapse due to public sector and loan liabilities thanks to Gordon and Alistair, so if you have lots of sterling saved up, you may as well change at least a significant proportion into capital or another currency with larger reserves ($ or ?).
Edited by Hamsafar on 04/12/2008 at 14:18
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I am taking a selfish view, I have a credit card (got it a few weeks ago) on a very low APR. My view is I have no money so I have nothing to loose. I would not spend money on one of these cars, partly because I have got my Fiesta running great now after a week teathing problems and parlty because I atm I do about 20 miles a week.
I would be nervious about taking out any real loan though, I am going to wait and see what happens. My plan is if something comes up cheap enough like a big value car to buy it for my dad to replace his Fiesta but it would have to be stupidly cheap e.g a 54 reg Vectra for £2k or something
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I would never,ever, buy a car "I didn't need" at any price or on any finance scheme!
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My simple advice having lived through lots of recessions.
NEVER EVER borrow money when times are hard to buy a depreciating asset like a car.
Why?
Because at some time you may lose your job or have your income cut.
And unless you have enough money to live on (I know you can get benefits etc) , you will end up selling the car for a huge loss.
The time to buy is when the economy is just starting to recover and before it is too obvious.
So that rules out 2009 in my view.
Edited by madf on 04/12/2008 at 16:38
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I think there has never been a worse time to buy than now.
This is assuming that you buy a fairly expensive car and repay over 2-3 years (it's all relative I know).
The reason being that Darling has already spelled out that in 12-18 months time he is going to start hammering us for tax so anyone buying a car should make sure they have a very big margin of disposable income remaining at the end of each month.
And I would not believe for one minute that we will only see a 0.5% increase in NI contributions. There will be plenty more on top. Part of the reason being that the government are going to find it harder to get debt because of the slide in sterling and interest rates.
Just in case anyone is struggling to understand what interest rate cuts are - they are those rates that the BoE cut to 2% and all the other banks that are paying bonuses with our tax bail out don't pass onto us. Or can't pass onto us fully because as a state owned bank they have to make themselves less competitive than the others to comply with competition laws.
So the message is don't buy a car unless you can pay all cash now because you won't be getting interest on your savings because the banks DO pass those reductions on.
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>>.. Or can't pass onto us fully
because on the one hand the Treasury wants 14% from the Banks for the taxpayers' money that the BoE has lent to the Banks, but on the other hand Gordon Brown wants the Banks to charge customers no more than base rate + a few points interest.
And on that basis Brown expects the Banks to make a profit and pay back the Taxpayers funds!
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I bet in each of the banks the Directors are saying "The Government are a shower of pink fluffy dice"
Lets stop lending, make as much money as possible and get the Government off our backs asap by repaying their loans...
Because that's what the conflicting demands would make me do,,
The Law of Unintended Consequences.
Edited by Webmaster on 05/12/2008 at 00:40
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I must admit I am rolling with laughter when I hear Gordon Brown coming to the rescue of HARD working families - we don't just work any more, we work HARD ! - and in trying to support the REAL economy (as opposed to the Fake economy is that Gord) by urging the banks to pass on the interest rate cut when - let me think we recently had a chancellor that was urging people to get long term fixed rate mortgages - the problem is I have forgot his name - can anyone help ?
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Lets stop lending make as much money as possible and get the Government off our backs asap by repaying their loans...
If that's what's happening then they will be nationalised. There will be no option.
The Law of Unintended Consequences.
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If that's what's happening then they will be nationalised. There will be no option.
So what is Northern Rock, which is already 100% nationalised, doing?
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>>So what is Northern Rock, which is already 100% nationalised, doing?
demanding its loans be paid back, I believe...
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demanding its loans be paid back, I believe...
www.mirror.co.uk/news/top-stories/2008/11/27/anger.../
www.citywire.co.uk/Adviser/-/blogs/investment-solu...5
1. stopped lending.
2. foreclosing loans and repossessing homes.
3. increasing interest rates.
But then NR has nothing to fear; it is already 100% nationalised so Gordon cannot nationalise it, can he?
But not to worry, the people who cannot repay NR mortgages will get Government guarantees, as announced in Gordon's latest wheeze to help "hard working" families yesterday who are no longer "hard working" as they have no jobs..
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Quite. What's your point? That's what the government wanted them to do way back 2007 when it looked like saving NR might be "The Answer" and everyone was terrified of a the taxpayer being in hock for £25 Billion or whatever it was originally. Ha! Those were the days, eh?
I think most of them will be nationalised or part nationalised by share purchase anyway. Nasty business and I don't like it, but I think they will, one by one, because in truth they cannot lend as they did before; they have no choice.
Edited by Baskerville on 04/12/2008 at 20:51
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Port car park full of cars in LA
tinyurl.com/5mcb7u
Airfield car park in Oxford
tinyurl.com/5tljve
And in Bristol
tinyurl.com/6nrrgk
And in Gloucs
tinyurl.com/5dbksa
We are in uncharted waters for the West - only Japan has been here before. Next year is going to be dire for jobs, house prices and car prices. House prices will tumble in price that will astound people. Cars - no chance unless they heavily discount the prices. Welcome to DEFLATION!
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I also think that people have become so frightened by fuel costs and VED costs that even if there were more buyers around now that they would not be going for the big cars with low MPG and potentially future high VED.
Methinks that the EU obsession with CO2 taxation has flipped a switch in consumer's minds and that such cars may well now never sell and are effectively just scrap metal rusting in fields.
Has the Government's and EU 'plan' backfired?
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I think your correct on both accounts tawse.
I questioned your view a while back when you suggested that we were entering a period of deflation but you have been proven correct - or will be soon I suspect.
I also think your correct about the confusion in peoples minds about what to buy and where VED will end up.
Consistent, long term and joined up strategies are not something this government does I'm afraid. Unlike allot of other countries.
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Fascinating stuff tawse. I recognise some of the sites = closed RAF bases. Might some of these be unsold imports as opposed to British built cars awaiting export or UK sale? Either way they are bad news for makers, dalers and (if they sit there too long) not marvelous to buy as "new"
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Well if they have airfields of the stuff, why can't they heavily discount. Are they waiting for the day when they will get want they think they are worth. They are just rotting away.
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I think the true answer to the OP's question is that nobody knows; if they did the present crisis would not be there. But it seems that cash is currently king - and if there's a really good deal there then go for it; but not on finance (9% on a loan and 1.5% on savings?). Are they waiting for the day when they will get want they think they are worth. They are just rotting away. >>
I agree with Ben 10. If the manufacturers are going to resume normal production at all (and if they don't they are bust) then the present backlog has to be sold at a loss if necessary. So a really good deal means massive discounts, not a few per cent. As others have noted on other threads, the stock markets react hourly to good or bad news but house and car sellers seem always to want the punters to believe that it will all come good next week.
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Fascinating stuff tawse. I recognise some of the sites = closed RAF bases. Might some of these be unsold imports as opposed to British built cars awaiting export or UK sale? Either way they are bad news for makers dalers and (if they sit there too long) not marvelous to buy as "new"
>>
I got the links from a thread about car sales over in the housepricecrash forum - they have far more links. Seems half the country is now a big car park for unsold cars.
I do think Brown and Nu Labour's Green taxes have backfired big time - they saw a huge oportunity to penalise drivers by showing the green card and using CO2 as a cover for increased taxation. IMPO, Brown is an 1970s Polytechnic lecturer of the old red school flavour who is a control freak obsessed with power and high taxes.
So he went and brought out new taxes on cars and it has now completely backfired as it has coincided with the recession plus that we are amongst the biggest makers of 4x4s in the World now so there is a double whammy there.
I have the cash to buy a CRV, I am interested in buying a CRV but I ain't going to buy one because I fear I might be taxed off the road in 1 or 2 years time by taxes yet unannounced by Brown and Co... I wonder how many other people feel this way about all models which are now considered 'big'. At the same time if you already have one then you may as well hold on to it until it dies now as, if like me, you tall or you are on the large side... or you have kids... or you have an elderly relative... etc, etc.. then a smaller car ain't just going to do the job.
In short, they - the Govt - have killed a large section of the UK industry but can now hide behind the recession as being the cause. I suspect, even if we were not in a recession, the sale of 'big' cars would have dried up anyhow due to the taxation fear which now exists in millions of Brits' minds.
But we now have deflation. 2009 is going to be a year that most people have not witnessed in their lifetime. My Mum, bless her, and her Mum and Dad lived through the Depression and it stayed with them all their lives. My Mum, up until she passed on 2 years ago, re-used virtually every envelope she received and kept almost everything - that is what people get used to doing when they have nothing and it stays with you all your life then. There are but a handful of people left now who can remember the 1920s and 1930s but, methinks, the coming Depression of 2009 to 2012 will be talked about long after all of us are dead and gone.
Sorry to sound depressive but just wait till around Feb and we are seeing big, well-known companies go bust and laying off people. Unemployment will rise and house prices will plunge. I am expecting house prices to fall a good 50% from their highs and I think we will see extraordinary price cuts in cars - just as happened in Japan in the 1990s.
Car dealers are going to have to make some big decisions soon to get cash in - either that or go bust.
Btw, Toyota today lost its Triple A credit rating.
Edited by Webmaster on 05/12/2008 at 00:37
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These pictures could be years old - The picture of my house was taken 4 years ago
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It's OK, tawse. I've had most of the cars removed from Upper Heyford.
tinyurl.com/5gqxbt
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Pictures of inventory are misleading pap.
ALl makers make more cars than they sell in the winter so they store them..
Having said that if you look at the sales stats for new cars on November Sales thread you will see LRover sales down worse than most. Evil 4x4s made in UK.
And the makers want a £1 billion loan. From us taxpayers.
And Gordon is worried about the unemployed losing jobs and homes..
Note Gordon always appeals to the hardworking people cos these are the people he TAXES.
And it's our money he gives away by the billions.
Anyway, as I said before, anyone who borrows a lot in a recession to buy a car needs to try O level logic and economics.
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We bought a pre-reg car two weeks ago, mostly on finance. Logic being that I would rather have cash in the bank/saving account incase we need it, pay less than 6% apr for credit and also got a better deal on the car.
The car was necessary, although we could have bought an older and cheaper model i suppose - actually the finance on our car was arranged through Fiat, at a far better rate than the dealer would do on a second hand car on their forecourt. Intention is to pay the car off in the next 18-24 months and keep it for 10 years.
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And in Bristol tinyurl.com/6nrrgk
The pic of Bristol is Royal Portbury Docks - its where a large proportion of cars come in and out of the UK. IIRC there is no storage there - its a throughput facility. Cars rarely stay there more than about 3 days, and a large number of those will be Hondas / Toyotas / Jags being exported rather than incoming.
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large number of those will be Hondas / Toyotas / Jags being exported rather than incoming.
Hmm, that means some of them will be shipped past my home town. Anyone know where I can buy a Dummies book on piracy?
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Hmm that means some of them will be shipped past my home town. Anyone know where I can buy a Dummies book on piracy?
sorry i could not resist
www.weebls-stuff.com/toons/Somalia/
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