The US car market sounds absolutely wild, I have zero interest in owning any modern car long term due to how expensive it would be to fix once its out of warranty and after 7 years its going to be worth fuck all so I would have ate the entire purchase price plus interest.
I believe the most common way in Europe for private buyers of brand new cars is PCP, so the purchase price is offset by a guaranteed future value for the car at the end of the deal (usually three years), which the finance arm of the manufacturer is on the hook for. If its worth more you sell the car on and make a “profit”, if its value is less you hand it back and you lose nothing.
I have done the latter with multiple cars and it costs the financing arm thousands in each case.
Sure I never own the car, but I really don’t want to, and this enables me to only pay at most the depreciation of the car during my ownership period.
Obviously buying used and running it till it drops should be cheaper, but that’s complicated by cost savings of fuel vs. EV charging costs, the ever increasing repair costs as you start to age out simpler older cars, and other increased running costs such as insurance.
Bear in mind this is almost entirely caused by the stupidity of the American consumer. You can also lease cars like you’re describing, and you can also buy a used Honda Civic for under $20k that will last you forever and you can get loans on more reasonable terms. People just don’t do those because they see they can get a really nice car for an “affordable” monthly price and get stars in their eyes.
Leasing is something separate here, with a PCP deal its usually more expensive and you get the option to buy/sell it on directly and make a profit, which you do not with our leasing. Leases you can ask to buy the car at the end but you will pay full market value rather than the GFV, which can be less than the market value and they cannot say no.
Leases are also far more strict about wear and tear damage, for example you cant really get away with curbing the wheels but you can for small dings with a PCP.
The US car market sounds absolutely wild, I have zero interest in owning any modern car long term due to how expensive it would be to fix once its out of warranty and after 7 years its going to be worth fuck all so I would have ate the entire purchase price plus interest.
I believe the most common way in Europe for private buyers of brand new cars is PCP, so the purchase price is offset by a guaranteed future value for the car at the end of the deal (usually three years), which the finance arm of the manufacturer is on the hook for. If its worth more you sell the car on and make a “profit”, if its value is less you hand it back and you lose nothing.
I have done the latter with multiple cars and it costs the financing arm thousands in each case.
Sure I never own the car, but I really don’t want to, and this enables me to only pay at most the depreciation of the car during my ownership period.
Obviously buying used and running it till it drops should be cheaper, but that’s complicated by cost savings of fuel vs. EV charging costs, the ever increasing repair costs as you start to age out simpler older cars, and other increased running costs such as insurance.
Bear in mind this is almost entirely caused by the stupidity of the American consumer. You can also lease cars like you’re describing, and you can also buy a used Honda Civic for under $20k that will last you forever and you can get loans on more reasonable terms. People just don’t do those because they see they can get a really nice car for an “affordable” monthly price and get stars in their eyes.
Leasing is something separate here, with a PCP deal its usually more expensive and you get the option to buy/sell it on directly and make a profit, which you do not with our leasing. Leases you can ask to buy the car at the end but you will pay full market value rather than the GFV, which can be less than the market value and they cannot say no.
Leases are also far more strict about wear and tear damage, for example you cant really get away with curbing the wheels but you can for small dings with a PCP.
That’s called a lease here, and you don’t actually own it. You are basically renting it long term.
Thats also a lease here. Lease their company name goes on the ownership papers, PCP with the GFV, your name goes on the ownership papers.