Neil Mur­ray makes a liv­ing buy­ing & sell­ing pre-loved metal – and he’s on your side ‘While pay­ing the PCP, you’re not ac­quir­ing any eq­uity’ Next week

Motorcycle News (UK) - - Garage -

PCP deals could hit used val­ues

Per­sonal Con­tract Plans (PCPS) have be­come the de­fault means of sell­ing new cars in Bri­tain, and may re­peat that feat in the mo­tor­cy­cle mar­ket.

But is it the right route for you? You don’t get some­thing for noth­ing. Yes, the monthly pay­ments are en­tic­ingly low, but re­ally, what you’re do­ing is leas­ing the bike, not buy­ing it. Your monthly pay­ments are low be­cause the endof-con­tract bal­loon pay­ment, when the term ex­pires, is very high. While you’re pay­ing the PCP, you’re not ac­quir­ing any eq­uity in the ma­chine.

What is hap­pen­ing here is that ve­hi­cle sup­pli­ers are build­ing moun­tains of debt. That’s fine as long as the busi­ness model is in­fin­itely sus­tain­able, but it isn’t. Sooner or later, per­haps in a few years, buy­ers are not go­ing to part-ex the bike for a new one and another PCP, and they may not be in a po­si­tion to take own­er­ship via the bal­loon pay­ment.

When that hap­pens, there will be a moun­tain of un­wanted used bikes on the mar­ket. For buy­ers of used bikes, it’ll be bo­nanza time, be­cause used val­ues are likely to take a bath, the like of which we haven’t seen since the 1980s.

If I wanted a new model now, I’d buy the best low-miler or exdemo I could find. The art of buy­ing cheap bikes… cheap!

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