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      10-16-2019, 11:30 AM   #23
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How is hitting a lower target going to help anyone? They'll need to make more money on each car they seek just to cover fixed costs and overheads. You might be happy paying more for your car, and having a sense of moral righteousness, I'm not.
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      10-16-2019, 01:34 PM   #24
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Originally Posted by Goneinsixtyseconds View Post
How is hitting a lower target going to help anyone? They'll need to make more money on each car they seek just to cover fixed costs and overheads. You might be happy paying more for your car, and having a sense of moral righteousness, I'm not.
‘We’ make good money from finance commission, (I work in a retailer,) and if that revenue stream is taken away it’ll have to come from somewhere else as you quite correctly state.

It will come from chassis profit or other products it’s as simple as that.

They will have to be extremely careful how they do police it as it could well see retailers closing. It’s such a margin game anyway.
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      10-16-2019, 01:56 PM   #25
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Originally Posted by Wills2 View Post
If VT was an issue for BMWFS they wouldn't let you take another one out after doing it...clearly they have no issue.
While I dislike the idea of people abusing consumer protection rules (routinely claiming mis-selling etc), that is quite a compelling argument in the case of BMWs.

I once considered volunteering for Citizens Advice, but soon realised I was far too judgemental - I'm not helping scrotes to wriggle out of their debts...
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      10-16-2019, 02:13 PM   #26
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Originally Posted by Goneinsixtyseconds View Post
How is hitting a lower target going to help anyone? They'll need to make more money on each car they seek just to cover fixed costs and overheads. You might be happy paying more for your car, and having a sense of moral righteousness, I'm not.
Well they make next to no money on new cars, relying on incentives. So a lower target to get the incentive means same profit for less hamster wheel activity. Thedownside is they make more money on theone you VT (why they really want it) but that isnt a reason for flouting the law.

And BMW dealerships encourage inappropriate use of VT not in keeping with the reason for the law...

I wouldnt pay more by the way, i would buy less. Thats fine to be within the law. To me at least.
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      10-16-2019, 03:31 PM   #27
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Well they make next to no money on new cars, relying on incentives. So a lower target to get the incentive means same profit for less hamster wheel activity. Thedownside is they make more money on theone you VT (why they really want it) but that isnt a reason for flouting the law.

And BMW dealerships encourage inappropriate use of VT not in keeping with the reason for the law...

I wouldnt pay more by the way, i would buy less. Thats fine to be within the law. To me at least.
The dealer might make next to no money on the cars, but BMW do. Reducing production to allow dealers smaller targets is not going to be very popular at the factories.

Plus, don't know what the issue is. Call the law something else, no one is really losing out, allow people to do it anyway, forgetting the hardship element.

BMW might lose a bit on the odd one handed back, but they'll make on most. By the time you get to VTing you're generally 2/3 through your deal, give or take a few months and the cars are not quite making trade value to trade in, but are generally worth quite a bit more when sold at dealer prices.

Keeps decent used cars in the market, keeps a stalling market turning over and keeps production flowing. Who actually loses in this case? If there was someone suffering, and it wasn't just a technicality about what the law was really meant for, I might care a bit more.
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      10-16-2019, 03:38 PM   #28
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Of course your right - but because it was introduced for a reason and exists for that reason, big business making more money out of it feelsuncomfortable.

But then if someone offers me a discount for cash, no receipt no questions I do feel obliged to point out that tax evasion is just as bad as benefits cheats.

It’s tough being so righteous, I blame my parents....
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      10-16-2019, 03:42 PM   #29
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Of course your right - but because it was introduced for a reason and exists for that reason, big business making more money out of it feelsuncomfortable.

But then if someone offers me a discount for cash, no receipt no questions I do feel obliged to point out that tax evasion is just as bad as benefits cheats.

It’s tough being so righteous, I blame my parents....
As I said, I generally have a pretty high moral standpoint, but someone needs to be being hurt by this process for that to kick in.

At the moment, the only person I can find that is being inconvenienced by it is you, and then only from a moral standpoint. That's not quite enough to swing it for me.........
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      10-16-2019, 03:48 PM   #30
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Originally Posted by Goneinsixtyseconds View Post
As I said, I generally have a pretty high moral standpoint, but someone needs to be being hurt by this process for that to kick in.

At the moment, the only person I can find that is being inconvenienced by it is you, and then only from a moral standpoint. That's not quite enough to swing it for me.........
I think I said at the outset not many would agree...

You should hear me when those “got debts over £15k, write off 80%” ads come on. You ran up the debt, you pay it. Unless there is a really good reason, that couldn’t have been foreseen. I think in my head the two are sort of connected -have a flash new car, lose shit loads of money, then walk away and do it again not paying all that you should (even if the way out is legit)...
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      10-16-2019, 04:03 PM   #31
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Originally Posted by isleaiw1 View Post
I think I said at the outset not many would agree...

You should hear me when those “got debts over £15k, write off 80%” ads come on. You ran up the debt, you pay it. Unless there is a really good reason, that couldn’t have been foreseen. I think in my head the two are sort of connected -have a flash new car, lose shit loads of money, then walk away and do it again not paying all that you should (even if the way out is legit)...
I can’t remember the last time a customer came in to me and said, look I can’t pay my monthlies I want to VT. This invariably is the conversation had directly with the finance house not the retailer.

What we do have a lot of is after qualification is: ‘you owe £5500 on your Vauxhall Corsa, and it’s now worth £2000. To buy a new(er) Astra you can either pay the £3500 in neg egg or hand the car back because it looks like you are close to being or are over half way through your finance agreement.’

I’m not being obnoxious, but where do you stand now?

Have a think about the lower end of the market, and that someone spending £150 a month on a car won’t have the £3.5K to clear the neg egg.....and why would you? You might as well throw that cash on a fire. Cripple the market and make them continue to pay it? Or VT it?

PS I do agree with you about IVA’s etc. You spent it, you pay for it.
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      10-16-2019, 04:24 PM   #32
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Originally Posted by 335dX View Post
I can’t remember the last time a customer came in to me and said, look I can’t pay my monthlies I want to VT. This invariably is the conversation had directly with the finance house not the retailer.

What we do have a lot of is after qualification is: ‘you owe £5500 on your Vauxhall Corsa, and it’s now worth £2000. To buy a new(er) Astra you can either pay the £3500 in neg egg or hand the car back because it looks like you are close to being or are over half way through your finance agreement.’

I’m not being obnoxious, but where do you stand now?

Have a think about the lower end of the market, and that someone spending £150 a month on a car won’t have the £3.5K to clear the neg egg.....and why would you? You might as well throw that cash on a fire. Cripple the market and make them continue to pay it? Or VT it?

PS I do agree with you about IVA’s etc. You spent it, you pay for it.
Well I sort of see the car as the same, you bought it so you pay for it. Especially as the alternative is you bought it, had a nice new car, and now want another without paying for the use you have had...

But as I say, I don’t expect others to be rushing to agree.
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      10-16-2019, 04:24 PM   #33
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Originally Posted by isleaiw1 View Post
I think I said at the outset not many would agree...

You should hear me when those “got debts over £15k, write off 80%” ads come on. You ran up the debt, you pay it. Unless there is a really good reason, that couldn’t have been foreseen. I think in my head the two are sort of connected -have a flash new car, lose shit loads of money, then walk away and do it again not paying all that you should (even if the way out is legit)...
I agree with half of that, but VTing really isn't the same.

You aren't writing off all that debt. I had £21k of debt, and gave back a car worth £20k. At best I'm writing off £1k. But even then I'm not, because the £20k is trade value, retail is more like £23-24k. So all I've done is reduce the dealers margin on it.
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      10-16-2019, 04:27 PM   #34
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Originally Posted by isleaiw1 View Post
Well I sort of see the car as the same, you bought it so you pay for it. Especially as the alternative is you bought it, had a nice new car, and now want another without paying for the use you have had...

But as I say, I don’t expect others to be rushing to agree.
335dx's example is a bad one, that is one where the finance company loses out. If a car price and amount owed is that far out of balance at the VT point then the original deal was not very well thought out by the finance company. And as far as I'm concerned that's their own fault. Over inflating the GFV leads to that, and that is NOT the consumers fault.

Many that do it with BMW's don't cause the dealer to lose out if the value is close ish, maybe £1-2k out at trade price, then you haven't taken advantage of anyone and you HAVE paid a fair price for the use of your car.
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      10-16-2019, 04:42 PM   #35
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I agree with half of that, but VTing really isn't the same.

You aren't writing off all that debt. I had £21k of debt, and gave back a car worth £20k. At best I'm writing off £1k. But even then I'm not, because the £20k is trade value, retail is more like £23-24k. So all I've done is reduce the dealers margin on it.
I was referring to buying a used car, and then part ex’ing said used car. It does happen, and frequently. (This is HP not PCP as I think your alluding too?)

I hate to tell you, but us mortals buy used stuff as a ‘new’ car, not a brand new car.

Last edited by 335dX; 10-16-2019 at 04:49 PM..
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      10-16-2019, 04:43 PM   #36
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335dx's example is a bad one, that is one where the finance company loses out. If a car price and amount owed is that far out of balance at the VT point then the original deal was not very well thought out by the finance company. And as far as I'm concerned that's their own fault. Over inflating the GFV leads to that, and that is NOT the consumers fault.

Many that do it with BMW's don't cause the dealer to lose out if the value is close ish, maybe £1-2k out at trade price, then you haven't taken advantage of anyone and you HAVE paid a fair price for the use of your car.
Not necessarily, the used car market can have a drastic effect on trade prices, desirability of the car etc etc. They might not have lost out too much as they’ll have had 2 or 3 years worth if interest...

You are right in one respect if the rate was too high, £0 dipper, products financed....
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      10-16-2019, 04:53 PM   #37
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Not necessarily, the used car market can have a drastic effect on trade prices, desirability of the car etc etc. They might not have lost out too much as they’ll have had 2 or 3 years worth if interest...

You are right in one respect if the rate was too high, £0 dipper, products financed....
Sorry, I just meant the example was bad because it showed an example where a finance company was losing a big chunk, helping Ian make his point. A lot don't lose very much after getting a long way into the pcp contract.
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      10-17-2019, 05:08 PM   #38
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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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      10-19-2019, 11:59 AM   #39
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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.
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.
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