[encee]

People, this depreciation worry just needs a reality check for the moment.

Just think about the fantastic motors you`ve got, and as long as the family isn`t going without anything, then why worry ?

We all love our cars, and life`s for living, ie; you only get the ONE "tour of duty" here, so enjoy your cars, and stuff the depreciation !!!!!!!

[beemerbird]

Perhaps another sign of the times and current economic climate?

Just had a call from BMW Customer Services. The other half took the call as I was out ...... well doing the tea and playing on here. Lady from BMW asked to speak to me and was duly informed that I no longer have a BMW. "Er no, we already know that...... it was about Miss .... recent test drive and enquiry about the M3." came the reply.

I'm used to the dealer doing a follow up call, but never had BMW Customer Services ringing.

[sheps]

That is mega depreciation for the Murcie, but then look at the mileage - 44k in under three years is above 'average' milage (if there is such a thing any more) expected on a vectra or a Mundane-O, let alone a £180k supercar.

These things under 'normal ownership' usually do maybe 4k miles a year, meaning that one had done almost 4 times what you'd expect it to have done in that time period. Excessive mileage is always going to kill residuals.

[peterg1965]

List price for my GL320 was £57K (i didn't pay that, or anywhere near it) 5 months ago, even if I could persuade the Mrs that an M3 is the way to go I think I would be a little disappointed by the GL trade in valuation in the current climate! The guaranteed value on my PCP package after two years is £33.1K which seems optimistic in the extreme. Strikes me that MB are prepared to accept a massive loss if I just hand it back at the end of the PCP.

If the current car buying climate persists I may never buy new again.

[dxb335d]

sheps that murci is nearly 4 years old, its a sep 2004. so Average miles but like you said, how many supercars do that.

[chrisbin]

So.....PCP's with GFV's are the only way to go at the moment......



/discuss?

[gr4z]

My PCP has a GFV = phew

[gIzzE]

Originally Posted by chrisbin

So.....PCP's with GFV's are the only way to go at the moment......



/discuss?

Absolutely.......not!!


The only one who will ever pay for the risk in a GFV is you!

On the new M3 we worked out that to get a GFV on the finance you paid £10k more over the 36 month period.
So have a £28k balloon that is guaranteed or an £18k balloon that isn't.

Why would you pay the risk up front??

[sheps]

Originally Posted by dxb335d

sheps that murci is nearly 4 years old, its a sep 2004. so Average miles but like you said, how many supercars do that.

Carlos, it was a three year old car at the time of the article - he drove it out of the dealership in September 2004 and the 'end of term' report was Septmeber 2007. The miles stated and the values quoted are a year out of date now....

[dxb335d]

OH, it does seem well undervalued for a year ago though. Like i said last year i saw 2002 Murci's at that price (90k)

[peterg1965]

Originally Posted by gIzzE

Absolutely.......not!!


The only one who will ever pay for the risk in a GFV is you!

On the new M3 we worked out that to get a GFV on the finance you paid £10k more over the 36 month period.
So have a £28k balloon that is guaranteed or an £18k balloon that isn't.

Why would you pay the risk up front??

Gizzie, not sure I undertsand this logic, not saying it is wrong but it probably isn't right in every case. Having bought a huge 4x4 'bus', at a considerable amount below the list price, I reckon that the GMFV will work in my favour when I hand back the keys after two years. Ideally I am hoping for a couple of grand over the GMFV to help me buy the next car but I think that in the current climate that is unlikely. I am not carrying much financial risk in my deal (I paid £1K deposit and will pay £10.7K in payments over 2 years, 4.2% APR), then again neither is Mercedes Finance even if the trade value is less than the GMFV. MB build these GLs in the US and sell them at half the UK list price!

[gIzzE]

You are right, there are times when a PCP type agreement can work.

There are times when BMW, AUDI, MERCEDES et al, need to move metal, stuff that just isn't selling that well. The GL is a good example, as is the A8 and the 7 series.

A good example is the PCP deals that were being done on 730d SE's, £1797 + 35 x £599.
Now the 730d SE looses nearly this in year 1 and around £10k more that over 3 years not incuding any interest if you finance it.
However BMW can afford to do this as they just want their cars seen on the road, a 730d only costs BMW UK around £40k, not the £60k list, and they also know they can get £29950 for it at 3 years old with 30k miles on it, so they are only having to fund £10k, meaning they are still making a good £13k through the finance.


So yeah there are times when buying with GFV is worth doing, but 9 times out of 10 taking the risk personally is a better financial move.

[dxb335d]

So you guys think that dealers are going to take a big hit on PCP cars?

Thats a shame as then there business aint doign well and they may have to make reduntecies. (sp) and therefore fuel this recession even more.

[gIzzE]

Originally Posted by dxb335d

So you guys think that dealers are going to take a big hit on PCP cars?

Thats a shame as then there business aint doign well and they may have to make reduntecies. (sp) and therefore fuel this recession even more.

I don't think they will be taking a hit as they have factored in negative equity into the monthly repayments.



An example...
335i sport touring auto
£40,000


PCP
£4000 deposit
36 x £765
GFV £18000

Lease purchase
£4000 deposit
36 x £765
RV £14000


As you can see the PCP costs the same as the lease purchase but the final payment is £4000 more, so even though they guarantee the car will be worth £18k that have take another £4000 off you over the same period to cover any potential shortfall.
Most PCP agreements are around 5-6% flat rate, unless they need to shift a model that is not selling as well as hoped, then they may offer 7-8% apr.

Personally I would rather have the smaller balloon and no GFV, as long as you are sensible with the final payment it can really work in your favour.
Also PCP is only good if you see the term out, for anyone who may want out after 12, 18 or 24 months it is a mare as you have to get a discount on the amount owing and the way this is calculated changes between different lenders.