Cars. Ownership, by the month.
New cars used to last 20 years. Now most buyers hand them back after three, because cars are just another financial product.
THE GIST ON CARS: "Ownership, by the month"
What changed after 2008?
Before 2008 most people saved up to buy a car, or got a loan. Then the crash hit and the industry needed to rescue itself. It found a product Ford had created in the 90s: PCP.
Low monthly payment, big balloon at the end, hand it back after three years and go round the carousel again. Within a decade it had eaten the entire market.
Why do cars not last any more?
Once the industry knew the car was coming back after three years, it stopped building them to last. No one in that chain is paying for better. The customer pays a monthly fee, the finance company buys a 36 month asset, and the factory is paid for volume. No one is paying for the 15 year car any more.
Quality used to be what you'd pay more for. Now every car maker on earth engineers to the same 36 month standard, because they all serve the same financial system. The extra money goes on a more expensive badge.
Is it just cars?
The car is the prototype. Look at your house. Your phone is on a two year cycle, the sofa on a five year cycle, the washing machine on a seven year cycle.
Ownership used to mean permanence. Now it means temporary. We've become tenants of our own possessions.
What is lost?
Every time we go round that carousel, it's an echo of an echo, with the original sound getting harder to hear. Can you even hear it any more?
Own your car outright or lease and swap?
Your take. One tap, then see how everyone else voted.
Quick answers
What is PCP?
A finance product with a low monthly payment and a big balloon payment at the end, which Ford created in the 90s. You hand the car back after three years.
Why are cars built for 36 months?
Huw says the customer pays monthly, the lender buys a 36 month asset and the factory is paid for volume, so no one pays for a 15 year car.
Does this happen beyond cars?
Huw lists phones on a two year cycle, sofas on five and washing machines on seven.
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