The Trooper 1815

iTrader: (31)

Watched Panorama last night and there was a Car Dealer explaining that many people are now in Negative Equity with there cars!

Thankfully I own mine outright but this is just another worry for many owners for the future. They showed a (I think) 2 year old Freelander that had dropped £19K from new to £9K

dpb

Had to larf at that one ,

Theres not SO many cars that appreciate after all

David Lock

And one motor had dropped from 16 to circa 8.5 in about a year

PeteBrant

Were people expecting not to be in negative equity (what a stupid term to apply to cars) when they buy a car , then?

I mean how many cars appreciate in value?

BlkKnight

I think what they mean is that the car is devaluing faster than they are making repayments on it - hence negative equity

lozgti

Will this affect those lovely deals with balloon payments at the end?

Different mindset on buying cars nowadays though.People seem to assume the right to have a new one every 2-3 years.Presume that will change?

PeteBrant

Ah ok I see, So repossesions result in there being abalance to pay.

This has been the case for a little while hasn't it? Since cars are usually auctioned off once they have been repossed, usually leaving balance to pay.

Stainy

If you buy them on finance (rather than personnal loan) you can give em back at the 1/2 payment stage without penalty....We did this a few years ago with my wife's car and saved around £1500

The best part is, the guy who collected it told us where it would be auctioned the day after....We didn't buy it back but he reckoned we could get it for £1000-£1500 less than it was worth.....total saving £2500-£3000 on what we owed

PeteBrant

Afriend of mine bought a new car recently (I say new, it was a few years old) and the conditions to qualify for a balloon deal were certainly more stringent than with his last purchase.

dpb

along with brand new appliances,new furniture, 3 foriegn holidays a year


at age 21



the economy will crash of course

rossyboy

iTrader: (8)

My Mondeo is in negative equity by about £500. I wont be losing any sleep over it though.

PeteBrant

Every car I have ever bought has lost me money. I have never sold a car for a profit.

But then I didn't expect to.

Nor do I expect a programme to be made about people that find that thier car is losing more money per month than they are paying for it.

So ****ing what. You didn't buy it as a risk free investment (or at least, if you have a higher IQ that, say, a small lump of putty, you didn't). You bought it to travel in.

David Lock

My mate Pete sells cars that have appreciated

Cars for sale

And I remember as a schoolboy buying an Austin Somerset for £3.50 and selling it for £7.00 !! d

Leslie

I bought a 1928 James Supersports TT motor bike from the head boy at school for £5 and sold it later for £12-10 shillings! after I had passed my test on it.

Les

Dan W

Do any of us buys cars in the hope of making money?

I know its theoretically possible, but I just accept that cars wear out so drop in value.

Could always start investing in rare Ferraris.

David Lock

Should have kept it

lozgti

Seems that an R reg lotus elise is always about £10k whenever I have looked for one.That figure never seems to really go down for some reason!

STi wanna Subaru

iTrader: (1)

I think the point is that if people have negative equity in a car then they wont be able to realistically sell it on. That leads to a slow down in the car markets which further heightens the problem. I bet there are loads of people on here who will want to keep quiet because they have forked out a fortune for a Scoob which is now stupid money to run and is highly undesirable to the used car market.

My Scoob casts me a lot to run for what it is but I had my moneys worth out of it a few years back.

Steve vRS

My justification for spending money on my 14 year old Eunos is that it's a drop in the ocean compared to what the depreciation would have been had I bought a nearly new RX-8 or Focus ST.

Steve

R 14NS R

the 'negative equity' scenario is why so many people buy on pcp schemes now and it make sense to do so.

they are usually lower rate than you can borrow from the bank as they are subsidised by the manufacturer, and at the end of the agreement be it 12, 24, 36 or 48 months they know that if they owe 6k but the car is worth 3, they can hand it back, if its worth 8, they will have equity as a new deposit.

it used to be the case upto about 18 months ago that there was usually equity in the car earlier than the end of agreement date, but with crap used car values, people give it back and the finance company has to take the hit.

cars will always loose money but with pcp but you know exactly where you will be at the end of the term. all you are really doing with pcp is funding the depreciation at usually a low rate so more sensible than owning the car outright and having all your money tied up in it and the option to give it back if it depreciated more than predicted but you get money back if not.

PeteBrant

But to my mind if you buy a car with the resale price in mind, then you shouldn't be buying the car.

Reasons I buy a car are Do I like it? Do I like to drive it? Do I like the way it looks? The way it sounds?

At the very very very bottom of the list is "What can I sell it for?"

Henrik

iTrader: (5)

Hrm, I personally don't like PCP. After buying the scooby on one of them and then having to pay the car *and* save for the balloon of 7800 over three years was really painful, and we ended up paying interest for three years on the balloon amount as well.

When we bought the last car, we just went for a straight repayment option with no balloon. Easier that way (in my opinion).

If you plan on changing cars every three years, however, a PCP is good, I guess, but I'm not intending to buy a new car for a loooong time

Lisawrx

iTrader: (1)

Pete, I'm not sure that was the point they were trying to make. (truthfully I'm not entirely sure on the point of the programme). I thought what they were getting at, is that vehicles are now dropping in value, at a fairly alarming rate (again not sure if that is true), due to running costs, and of course the new tax rates, that people who bought a car in recent years, now are stuck in a situation whereby, their car is worth so little, they can't realistically sell it on and buy something different, as they'd still owe so much on it. So basically, they can't change their car, but may need to as they may not be able to afford the higher costs of running etc. either.

Not sure if I've understood correctly, but that's how I took it.

STi wanna Subaru

iTrader: (1)

You're in a fortunate position then because only a fool would buy a car on any sort of finance without considering what the financial implications may be a few years down the line. You may be wrong with those assumptions but I think most people make this one of their main considerations.

The Trooper 1815

iTrader: (31)

Yep. It's all about having to keep it until all the outstanding finance etc is clear before you can consider moving on to a new one.

Most dealers would do deals before where no money changed hands but now YOU may have to pay THEM to take your car!

lozgti

Balloon deals....fine if you never want to own your car and your plan is just to give it back

Not very nice if you really are of the mindset that you will be saving up to pay it at the end of the term.Especially if you are bored with the car after 3 years.

Thats how I felt with my Audi A4.Never wanted a new car since then or finance,not when there are cheap second hand ones that have taken the big hit and there is sod all wrong with them!

So easy to go all glassy eyed at the thought of a new car without thinking about the realities about buying a depreciating asset

J4CKO

iTrader: (1)

Maybe it will mean that people will drive a car they can afford, rather than one they can get finance on, not saying that nobody should finance a car but there has been a lot of people borrowing against equity in their homes to drive a better car than they could afford or seeing a TT for £450 a month and just managing to pay that but forgetting about running it and how much that costs, people seeing finance deals for £200 a month for a new Focus but not reading the small print.

Anything petrol engined and large, even the thirstier, higher VED diesels and anything thats not very fashionable is getting a kicking in terms of value, smaller low VED cars are now overpriced realtive to the reduction in VED and fuel costs, i.e. a grands worth of difference between say a 1.8 on £120 and a 1.2 on £35 a year, ok fuel and insurance as well but it doesnt really add up in a lot of cases.

Makes me wonder what the goverment will do once everyone is in £35 a year VED vehicles apart from the very well off ?

PeteBrant

Indeed

PeteBrant

Ah now that makes much more sense.

J4CKO

iTrader: (1)

Bang on, gimme gimme gimme, I want it now !

Gets bored of it, kerbs the alloys, dents the body, stinks the interior out with dogs, **** and never cleans it,

repeat until bankrupt.