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
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!