59% of new car "sold" now on contract rental

[Deleted96908]

saw a piece in the sunday times about this, the ECB is the backstop for VW, and many others > ECB hits Volkswagen with ban on loans | The Sunday Times < and they've banned asset backed securities to VW

Whoops, worried i guess that the underlying assets (cars) are likely to be worth much less than the value stated in the term sheet.

VW's own, 2008 echoing, ABS disaster.

 

[Dryce]

But only due to the low cost of capital?

What happens when it becomes more costly to borrow money?

The market then re-adapts ....

The only real problem I have with the current situation is the artificial presentation of prices and discounts - and the hassle of trying to figure what the actual numbers mean when you compare different ownership strategies.

 

[Dryce]

Whoops, worried i guess that the underlying assets (cars) are likely to be worth much less than the value stated in the term sheet.

And once they do that for one manufacturer with a publicised problem they might reassess the potential risks with other manufacturers who don't as yet have a publicised problem.

 

[Red C220]

I guess in 5 years time we'll be able to look back an see how it panned out.

What do I think will happen? I think the global financial market has an uncanny way of finding ever more ingenious solutions to new problems as they arise. These solutions will allow everything to carry on until there's a "correction". Wall street crash, credit crunch, etc etc.

Everything then gets reset and we start again, it's not been long enough since the last one for another one to occur so I figure we're good for at least another 5-10 years before there are enough people in this industry that had no adult memory of the last problem to allow it to all happen again.

It's a cycle, accept that it happens and understand using this knowledge to use the system for your own advantage is not a bad thing.

Alternatively sit on the outside looking in and whine about how unfair it is.

 

[Bonecho]

Wonder how many people have used the sale of their old car to fund the deposit of their PCP deal. They won't have that option on their next car when it is time to hand the car back.