Quote:
Originally Posted by E60MKF
In my eyes, those who VT are gaming the system. Instead what they should do is wait until the end of their agreement and hand the car back. In both circumstances they wont pay the negative equity.
The problem is with most people using PCPs, they are fundamentally getting into a car which they cant afford in reality. This leads them into a chase to keep up with their peers who are doing the same..
In my eyes, many will disagree, you should be able to purchase your car outright with cash. The way you finance it is then irrelevant.
I use PCP as I can minimise my deposit and monthly payments and should the car be worth less than the final payment, I will hand it back at the end of the term.
My thinking is, put cash into appreciating assets not depreciating pieces of metal sat outside.
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Your last sentence seems to sum up why many use PCPs, but you also suggest that 'most' are doing otherwise.
I'd suggest that most people with PCPs are putting as much as they can into mortgages (funding debt on an appreciating asset), pensions or just enjoying life while they can (and why not!).
I'm not a VTer, but have consistently used PCPs for almost 15 years as it gives financial flexibility and allows funds to work elsewhere, as you say.
I don't think it's correct to say that people can't afford it, the PCP and lease model is actually the way to fund these things, as mortgages are for houses. If you can afford the PCP, and the next one, you can afford the car.