First Direct

Money, investing, mutuals etc

Re: First Direct

Postby planteria » Thu Aug 03, 2017 8:42 am

that's right re. both Labour and Conservative parties believing that the relaxed approach to banking was the best route... but pointing out that it was under Labour's watch is relevant, as the media allow them to suggest they were against it :roll:.

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Re: First Direct

Postby blythburgh » Thu Aug 03, 2017 9:50 am

All of the political parties here and in the USA are guilty of causing the banking crash by letting these bonds do the rounds.

And now the banks are once again allowing people access to more credit than they can afford.

The new shocker on the market is the pay £x amount down and £y per month for your car. After 3 years you can give it back and get another new car. But a lot of people are so bombarded by the salesperson's yapping they do not fully realise what they have signed up to. I heard on the radio the lady who had no idea who many miles per year on average she could drive. When the three years had ended because she had driven far more than the 18,000 miles she had signed up to the dealer wanted several thousand pounds more to cover the cost of selling it at the higher mileage than they had expected.

And others got billed because the car was not spotlessly clean. Or there was a scratch or two. And these bills were not small either.

I am grateful we settled for a 2nd hand car in 2004 and this year we bought another 2nd hand car from our local and trusted garage. No worrying about what happens if I make it a tad dirty or get a scratch or a knock. My last car had a graze and a couple of dents that I know I had not caused but discovered so another driver had done them and driven away.

And yes we both have credit cards but mostly use cash/debit cards. Recurring bills are paid by Direct Debit. So what is in the bank account is money we can happily spend without worry. Our car is ours with nothing to worry about when we come to trade it in for the next one.
Keep smiling because the light at the end of someone's tunnel may be you, Ron Cheneler

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Re: First Direct

Postby planteria » Thu Aug 03, 2017 10:06 am

a cautious, and arguably wise, approach. at the same time i understand the concept of not wanting to have cash tied up in a depreciating asset (car) and to just consider it to be an ongoing monthly cost, and leasing.

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Re: First Direct

Postby blythburgh » Thu Aug 03, 2017 10:11 am

planteria wrote:a cautious, and arguably wise, approach. at the same time i understand the concept of not wanting to have cash tied up in a depreciating asset (car) and to just consider it to be an ongoing monthly cost, and leasing.


I am not against leasing in principle as long as the buyer is fully aware of what they are signing up to. And I fear many are not fully aware. And with credit purchases you can sell the car and pay off your debt. I have heard that you sign up for the length of the lease and cannot get out of it easily. If you lose your job etc then you are in deep trouble if this is correct.

We saved up for our current car and put up with an old car that was roadworthy but not as nice a ride as our current one nor without the extras like cd player and electric windows. I accept that is not an option for everyone.
Keep smiling because the light at the end of someone's tunnel may be you, Ron Cheneler
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Re: First Direct

Postby Chadwick » Thu Aug 03, 2017 11:09 am

blythburgh wrote:The new shocker on the market is the pay £x amount down and £y per month for your car. After 3 years you can give it back and get another new car. But a lot of people are so bombarded by the salesperson's yapping they do not fully realise what they have signed up to. I heard on the radio the lady who had no idea who many miles per year on average she could drive. When the three years had ended because she had driven far more than the 18,000 miles she had signed up to the dealer wanted several thousand pounds more to cover the cost of selling it at the higher mileage than they had expected.

This has been around for over 10 years, which was when I got stung by the additional mileage I'd clocked up. I'd realised maybe 18 months in to a 3 year contract that that would happen, so I contacted them to revise (ie. increase) my payments. They wouldn't have it. I was locked into the agreement, even though I was now offering them more money.

At the end, it wasn't worth paying them to take the car back. It was cheaper for me to buy it and then sell it privately.

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Re: First Direct

Postby Constantine » Thu Aug 03, 2017 12:46 pm

macliam wrote:...Sorry, your conclusion is incorrect - bankers found a way to increase their profits and bonuses without regard to the consequences - to me that is greed, plain and simple. You do not say "I was burgled, but it wasn't the burglar's fault because the police didn't stop them".....


You don't understand how banking regulation works. The primary purpose of banking regulation is to protect the bank from the (potential) idiots in charge of the bank.:) If it's done properly, it doesn't matter whether the individuals running the bank are greedy, stupid, or just plain incompetent. The bank will survive. It will have enough capital to cover the mistakes.

You can look at the Co-Op Bank as an example. It was (as we now know) run by a bunch of idiots who didn't really know what they were doing. But because we at least now have a regulator that regulates the Co-Op Bank is still jugging away despite the scale of its losses.

macliam wrote:...As for "Bonkers Brown and Co", as I recall his liberalization of the market was fully endorsed by the Tories - some of whom thought it should go further. It's so easy to be wise after the event - the next "failure" will show where the current regulations are lacking.


We are not talking about "liberalisation" we are talking about "regulation".
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Re: First Direct

Postby Constantine » Thu Aug 03, 2017 12:59 pm

blythburgh wrote:All of the political parties here and in the USA are guilty of causing the banking crash by letting these bonds do the rounds....


The issue was never the bonds themselves. The issue was the security for the bonds.

blythburgh wrote:...And now the banks are once again allowing people access to more credit than they can afford....


That would be an opinion.

You should have a look at the Eurostat numbers for Gross debt-to-income ratio of households. Consumers in Sweden and Norway for example have much more credit.

http://ec.europa.eu/eurostat/tgm/table. ... 4&plugin=1



blythburgh wrote:...The new shocker on the market is the pay £x amount down and £y per month for your car. After 3 years you can give it back and get another new car. But a lot of people are so bombarded by the salesperson's yapping they do not fully realise what they have signed up to. I heard on the radio the lady who had no idea who many miles per year on average she could drive. When the three years had ended because she had driven far more than the 18,000 miles she had signed up to the dealer wanted several thousand pounds more to cover the cost of selling it at the higher mileage than they had expected....


PCP (personal contract purchase) have indeed become more popular over the past few years. Banks do have an exposure to such lending. But they are more of a problem for the manufacturers.

http://www.bankofengland.co.uk/publicat ... rjun17.pdf
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Re: First Direct

Postby Constantine » Thu Aug 03, 2017 1:04 pm

blythburgh wrote:...I am not against leasing in principle as long as the buyer is fully aware of what they are signing up to. And I fear many are not fully aware. And with credit purchases you can sell the car and pay off your debt. I have heard that you sign up for the length of the lease and cannot get out of it easily. If you lose your job etc then you are in deep trouble if this is correct....


You can lease a car. But PCP isn't leasing. It's hire purchase with a balloon payment at the end, with the difference that the manufacturer normally guarantees that it will buy the car for that amount. Subject to T&Cs naturally.

blythburgh wrote:....We saved up for our current car and put up with an old car that was roadworthy but not as nice a ride as our current one nor without the extras like cd player and electric windows. I accept that is not an option for everyone.


I have always paid cash for cars. Never taken finance.
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