Interesting piece in the Financial Times today about big drop in sales of cars generally and lay offs in the industry and not just in the UK.

UK car makers have it even tougher. The sector’s “global competitiveness is under threat”, the Society of Motor Manufacturers has warned. Investment has tumbled, and carmakers are closing British plants or redirecting work away from UK facilities. Production fell again last month. Output fell 4 per cent in October against the same month last year. It has now dropped for 16 out of the past 17 months. Production for the year to date is down 14 per cent year-on-year.

Recently I have started looking for a possible FL2 replacement for next spring and have done a few searches on a petrol DS. What has struck me is the number of "demonstrators" on offer with very low mileage (say 1k miles) which sounds like a lot of pre registering going on presumably under pressure from LR to keep the production lines going. 3 x FL1 2 manual + 1 auto
5 x FL2 4 manual + 1 auto
Now Discovery Sport P250 MHEV SE

It can only be a good thing for a buyer provided a decent discount is being offered over new cost? Landrover - turning owners into mechanics since 1948

2014 Orkney grey Freelander SD4 GS.
2004 Zambezi silver Discovery 2 Td5 (Gone)
1963 Surf blue Morris Mini Minor Super de Luxe (my little toy)

Also a significant drop in second hand car sales I understand. Thought to be caused by the popularity of PCPs etc. The thinking being why buy second hand when you can pay less now and buy new? (And worry about the sizeable balloon payment at end of contract)

Also a hit to resale values of course.

Bob 10MY (Sept 09) TD4 HSE Auto in Stornoway Grey (Now Gone)

08 FL2 TD4 SE Manual in Rimini Red (Now Gone)

I think PCP are quite good for relatively low mileage users that come under the required criteria.

no good for anyone like me who do over 7k miles a year, If i was to go the PCP route it works out quite a bit more expensive than going the HP/Loan route as i do 18k a year currently

My mileage, approx 15 - 18k at the minute also rule that option out for me , although moving house next summer cutting my daily commute by allmost 2/3.
I'm happy to buy a 3 year old car with low miles, pay for it over 4 years then hopefully run it on several more years payment free to 100k plus miles, last discovery kept for 11 years in total and 165k on the clock. I don't know whether this is the best option but I do most of my own maintenance and do like the years when I'm not making payments.
Landrover will never make their fortune from me! Landrover - turning owners into mechanics since 1948

2014 Orkney grey Freelander SD4 GS.
2004 Zambezi silver Discovery 2 Td5 (Gone)
1963 Surf blue Morris Mini Minor Super de Luxe (my little toy)

Depreciation is the biggest cost of car ownership, unless your driving an extreme gas guzzler. I'm not surprised to hear that the market has slowed down as the world is awash with cars. If you go back a few generations cars would rust out and the average life span was about 11 years, I can remember walking past a, parked Vauxhall Victor in the early 60s and hearing the tinkle of tin falling off it. The problem we all face is that Diesel is the new, "Anti Christ", and unfortunately we will be faced with ever increasing taxation. I think that will be the one issue that will part me from my much loved Freelander.

I think we'll be long gone before our Freelander's go the way
of a 1960's Vauxhall Victor,  DAVE.

Driving 35,000 miles a year here and PCP’s work very nicely for me, thank you

I’m not sure what the problem is

I'm sure your pcp monthly payments are immense on any landrover covering that mileage annually. Landrover - turning owners into mechanics since 1948

2014 Orkney grey Freelander SD4 GS.
2004 Zambezi silver Discovery 2 Td5 (Gone)
1963 Surf blue Morris Mini Minor Super de Luxe (my little toy)

Quote:

I’m not sure what the problem is

The problem might be good for us owners, bad for the finance companies.

It comes at the end of the PCP term when looking at the difference between the final payment ("balloon") and the actual vehicle value at the time of the PCP ending.

Ideally, you'd want that the actual value at the end to be more than the balloon payment, so you can have a deposit for the next (or take the cash difference out). That benefits both we owners and the finance company... especially if you add deposit into the next.

BUT... that isn't always the case. Worst I've seen very recently is my business partner and his £53K estate car that was handed back to the main dealer/finance co. at the end of its 4-year PCP last week.

The final payment was £13,500, and there were three identical cars, similar mileage etc. on the forecourt all marked up at under £10,000... so he just handed it back as he was perfectly entitled to do... he doesn't need to pay the difference as it was a guaranteed final figure - but gets no deposit for another car either.

The crazy thing is that he then signed a few forms and got the keys to a pre-registered, higher spec version of the same car, less than one year old (marked up at about £55K I think) without putting down a penny for it, AND... paying £75.00 LESS per month than on his last one .

The dealer chap said openly that they simply HAD to shift these cars and chucked every possible extra in to discounting finance to make up the deposit and to get him to sign... and at that level, why wouldn't he?

It got more interesting... At the same time my colleague was signing papers, I was chatting with another chap at the coffee bar in the showroom... his car was at "mid-term" on his PCP and the likely end-value was looking like he would never catch up, and would be handing his car back half-way through without any penalty. He then floored me with what came out next... I knew you could do that, but he was there to sign for another, newer car on similar terms to my colleague - no deposit, etc...

I gladly walked away from PCP years ago in favour of not having that £400 or so monthly payment, mostly as my income is intermittent... but I can't help wondering if I should have stayed in when I see what happened at that main dealer last week...

Given the older car went back at what looks like a 3-3.5K loss, and multiply that by everyone out there making the same decisions every day, I wonder if that's all sustainable - I doubt it! Lexus RX450H - 500 mile a week commuter- I just couldn’t trust in a newer RRS or DS for that….
2009 Freelander 2 HSE... 155K miles, we’ve done 135k of those, has done brilliantly on the commute and staying firmly put as car two in the household
2002 Jaguar XK8 Coupe... fun, fast, ours for 12 years and owes us nothing - so staying with us too…

Bobupndown wrote:

I'm sure your pcp monthly payments are immense on any landrover covering that mileage annually.

@ Defender: you’re absolutely right there, but you just need to play the game. Many people criticise PCP’s for being a “customer rip off” but, in reality, there’s more risk in it for the funder than the customer.

@Deafender
What make and model of car are we talking about that your colleague had?
Seems like a bargain at less than £10k at 4 years old if it was £53k new. Landrover - turning owners into mechanics since 1948

2014 Orkney grey Freelander SD4 GS.
2004 Zambezi silver Discovery 2 Td5 (Gone)
1963 Surf blue Morris Mini Minor Super de Luxe (my little toy)

See I remember my first and only PCP
Year was 2000, I got the last of the non-BMW engined Freelander 1s, forgot what the monthly payment was but I do remember that it was just affordable. I told the sales guy I was doing 50K a year, the computer wouldn't accept it so he put 25k, I didn't notice the mileage on the form (my mistake) and just signed.

so 2 years into a 4 year agreement and the car literally fell apart (gearbox, diff, transfer box drive shafts, propshaft all completely shot), and I wanted out - "how many miles sir" why? well it's 8p for every mile over 50K !! = £4,000++


It went directly to auction, last I heard was a new owner asking how many miles it had done as it had <20k on the clock !
Unbelievable as it was dealer serviced to 60K

I will never ever go PCP again Tangiers Orange - gone, missing her
Replaced by Ewok what a mistake - now a happy Disco Sport owner

The computer certainly wouldn’t have accepted it as no finance company would have accepted a 200,000 mile contract!

The salesman should have looked at the maximum mileage possible per annum on a 3 year agreement and then budgeted for an additional 8p charge; this would have come up with a much more realistic lifespan and a more realistic monthly cost. But then, salesman and customer alike often chase the lowest monthly payment and worry about the consequences later. If the figures on an agreement weren’t read, or it was clocked by a dealer afterwards, it isn’t really the fault of the type of agreement.

With current PCP’s, you can even legitimately simply hand the car back once half of the total price of the car has been paid, which is a useful extra safety net.