Haines-Doran, T. orcid.org/0000-0002-2393-5154 (2023) The financialisation of car consumption. New Political Economy. ISSN 1356-3467
Abstract
This paper investigates the growth of new forms of personal finance used in purchasing motor vehicles – a development which it characterises as ‘financialisation’. It focusses on the case of the rise of the personal contract purchase (PCP) in the United Kingdom market, and seeks to account for its growing popularity, and potential implications. It is found that the rise of PCPs is best understood as a form of financial innovation designed to help car manufacturers overcome long-term profit realisation problems produced by market saturation in mature markets. The way PCPs are structured lowers consumers’ monthly finance payments, allowing them to access to higher value vehicles, and encourages more frequent purchases of new vehicles, all of which allows greater manufacturer profit realisation. However, it does so in a way which increases financial risk, to consumers, car manufacturers, and financial investors. On the other hand, manufacturers’ risk exposure is limited by how the consumers’ car dependency lowers expected default rates. PCPs threaten financial stability, as well as sustaining social and environmentally unsustainable consumption practices.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2023 The Author(s). This is an open access article under the terms of the Creative Commons Attribution License (CC-BY 4.0), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | Financialisation, car dependency, personal contract purchase, consumer finance |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 07 Nov 2023 11:23 |
Last Modified: | 07 Nov 2023 11:23 |
Status: | Published online |
Publisher: | Taylor & Francis |
Identification Number: | 10.1080/13563467.2023.2254727 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:204987 |