Escape the shackles of a lease and finance while you still can!
Over the years, new car prices have risen at an exponential rate, way beyond the normal rise inflation and other related costs. Due to this ever-increasing rise, we’ve seen an array of finance options with the most popular today being PCP.
PCP was introduced to make cars more affordable by reducing the monthly payments however what people don’t realise is the devaluation taking place in the background. This severe depreciation puts people into a negative equity situation instantly and as the vehicle ages, the miles increase and new models are launched, the rate of depreciation gains an unstoppable momentum.
In most cases, the debt is so severe that many are tempted into another lease, an infinite cycle that seems impossible to escape. With today’s financial climate, for the majority I don’t believe vehicles and their finance packages are worth the hassle, as a company car, yes, but as a personal mode of transport no.
The past few years have been incredibly tough for car manufactures as they’ve been constantly put under pressure to reduce emissions. The pressure has been so immense it’s seen many car manufactures such as Volkswagen fake the emissions with their skilful way of fooling the algorithm that tests such vehicles for emissions. It’s these situations that have forced car manufactures to increase prices however with the dawn of electric and Brexit, everything seems to be in limbo.
When the emissions scandal emerged, SUV’s alone suffered unprecedented loss wiping a clear 40% off their value and to add insult to injury, the tax increased to an eye watering £500+. Overnight prestigious marques such as the Range Rover, BMW X5, X6 and Audi Q7’s became a liability rather than a luxury.
Our wants have now become needs and they all lead to economy. Whereas in the past car buyers were looking for luxury and specification, they’re now looking for economy that’s friendly to climate change.
I’ve been a devoted car enthusiast since I was a boy however in my opinion, everything is a mess. New diesels we were told to buy years ago because they were economical are now frowned upon, petrol cars are now boring and all are unreliable in some form and as for electric, they can’t do what a petrol or diesel can at present.
My advice to anyone in a PCP lease or that has a new vehicle on finance is to escape the shackles now, buy a cheap yet reliable vehicle and wait a couple of years to see where things are. Let Brexit fully engage and see where electric technology takes us. I believe the technology for electric is there, it’s just out of reach for most and we haven’t witnessed their true reliability or cost to maintain over years as it’s all still very new and not everyone can afford a Tessla or say they’ve had trouble free ownership over 10 years.