Just Spent An Afternoon With A Car Dealer (BMW)...and...
Discussion
I wonder if the dealers will be left with a glut of cars handed back at the end of their 1/2/3yr PCP contracts, from customers that may have considered buying them outright when the actual value was anticipated to be higher than the 'guaranteed future value', but now that's probably not the case.
My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
Edited by yellowbentines on Monday 25th August 11:21
At work at the moment, I can certainly say that we are busy (sell 50-60 used cars a month in the £2000 - £6000 price bracket), selling anything upto a 1.6 Petrol or a 2.0 Diesel, anything else is death!
I have seen some very, very, cheap larger cars in part exchange recently, auctions are flooded with the bigger, higher emission vehicles and none of our traders want to buy the lumpy p/ex's unless they're stinkingly cheap, who can blame them!
Definetly some deals to be had on the bigger cars at the moment, meanwhile, smaller stuff is selling like hot cakes as everyone has been scared by the governments taxation proposals and fuel costs.. It does mean the smaller used stuff is harder to buy though!
I have seen some very, very, cheap larger cars in part exchange recently, auctions are flooded with the bigger, higher emission vehicles and none of our traders want to buy the lumpy p/ex's unless they're stinkingly cheap, who can blame them!
Definetly some deals to be had on the bigger cars at the moment, meanwhile, smaller stuff is selling like hot cakes as everyone has been scared by the governments taxation proposals and fuel costs.. It does mean the smaller used stuff is harder to buy though!
Edited by R300_PM on Monday 25th August 11:23
yellowbentines said:
I wonder if the dealers will be left with a glut of cars handed back at the end of their 1/2/3yr PCP contracts, from customers that may have considered buying them outright when the actual value was anticipated to be higher than the 'guaranteed future value', but now that's probably not the case.
My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
My dealer was telling me that BMW finance just did this deal - 2006 X5 V8 petrol, £33K, four year residual deal with a GFV of £19K! Seems a bit mad, but he had heard that BMW have an £11 million 'warchest' so that they can offset any errors in values and still allow the dealers to move metal as it were.My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
Edited by yellowbentines on Monday 25th August 11:21
yellowbentines said:
I wonder if the dealers will be left with a glut of cars handed back at the end of their 1/2/3yr PCP contracts, from customers that may have considered buying them outright when the actual value was anticipated to be higher than the 'guaranteed future value', but now that's probably not the case.
My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
I agree with you. If you want a real laugh, call your finance company and see what the current settlement figure is against what the car is worth to a dealer.My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
Edited by yellowbentines on Monday 25th August 11:21
It cost me over £5k to walk away from a 350Z roadster due to a move abroad - but that was still cheaper than leaving it parked in a garage for 14 months and then handing the keys back.
I wonder if garages have done any business planning about losing the revenue stream associated with people starting new PCPs on new cars at the end of their current agreement. I can't help feeling that if a punter hasn't got any equity to put towards a new car, he isn't going to be getting a new one at all...
Glen
GlenMH said:
I agree with you. If you want a real laugh, call your finance company and see what the current settlement figure is against what the car is worth to a dealer.
Glen
No need to, I've been looking around dealerships recently, they've taken my reg details (so can find out what I have outstanding in finance presumably?) and none of them have bothered getting back to me, I don't think its because they're too busy, I think it's because they know they can't offer me a trade value near what the outstanding finance is, I don't know what's oustanding but the dealers lack of callbacks tells it's own story.Glen
I'm not overly concerned, the beauty of the PCP is that if I'm still in 'negative equity' when the deal is up I can hand the car back, walk away, then go and buy a Monaro or Mustang as they'll be down to about £5k by then by any luck
GlenMH said:
yellowbentines said:
I wonder if the dealers will be left with a glut of cars handed back at the end of their 1/2/3yr PCP contracts, from customers that may have considered buying them outright when the actual value was anticipated to be higher than the 'guaranteed future value', but now that's probably not the case.
My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
I agree with you. If you want a real laugh, call your finance company and see what the current settlement figure is against what the car is worth to a dealer.My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
Edited by yellowbentines on Monday 25th August 11:21
It cost me over £5k to walk away from a 350Z roadster due to a move abroad - but that was still cheaper than leaving it parked in a garage for 14 months and then handing the keys back.
I wonder if garages have done any business planning about losing the revenue stream associated with people starting new PCPs on new cars at the end of their current agreement. I can't help feeling that if a punter hasn't got any equity to put towards a new car, he isn't going to be getting a new one at all...
Glen
Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
Doom and gloom.....
My number 1 criteria for a car is that it is in the highest car tax bracket. f
k em all....
My list for the next car (no PX required)
Mercedes SL55 AMG
Mercedes CLK 55 AMG
Maseratti 4200/Gransport
Jaguar XK (new shape)
As long as its got a V8.
God an extra £240 a year and everyone runs for the hills. It is like a fiver a week - I know give up fags and drink less - simple or ditch that ridiculous mobile phone contract with more minutes than you can possibly use.
It is a really good buyers market now. Go into that Glass and Marble palace of an Audi, BMW, Merc dealer and offer em 20%-30% off the sticker and no part ex and they will not show you the door. It is about time the bunch of arrogant tts learned to appreciate customers so no bad thing.
The dealers round here are like this
at the momment.
My number 1 criteria for a car is that it is in the highest car tax bracket. f
k em all....My list for the next car (no PX required)
Mercedes SL55 AMG
Mercedes CLK 55 AMG
Maseratti 4200/Gransport
Jaguar XK (new shape)
As long as its got a V8.
God an extra £240 a year and everyone runs for the hills. It is like a fiver a week - I know give up fags and drink less - simple or ditch that ridiculous mobile phone contract with more minutes than you can possibly use.
It is a really good buyers market now. Go into that Glass and Marble palace of an Audi, BMW, Merc dealer and offer em 20%-30% off the sticker and no part ex and they will not show you the door. It is about time the bunch of arrogant t
ts learned to appreciate customers so no bad thing.The dealers round here are like this
at the momment.pgilc1 said:
They have thought about that already - the latest PCP deals require no deposit.
Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
TBH I cannot see that lasting! I would be interested to know if that is for "new customers only" or people renewing. The reason is that it is the company that supplies the finance (not necessarily the dealer) that will be taking a bath on this. Eg if the agreement is with Capital Bank, then they will be the one offering the GFV, not the dealer. And they will be the ones with the vaseline out when these unwanted cars are sent to auction.Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
The company that supplied the finance for my Zed are definitely the ones that did the best out of me giving it back early....
GlenMH said:
yellowbentines said:
I wonder if the dealers will be left with a glut of cars handed back at the end of their 1/2/3yr PCP contracts, from customers that may have considered buying them outright when the actual value was anticipated to be higher than the 'guaranteed future value', but now that's probably not the case.
My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
I agree with you. If you want a real laugh, call your finance company and see what the current settlement figure is against what the car is worth to a dealer.My car is on a PCP and I was considering buying it at the end of the period at the guaranteed future value, when I took the contract the figures pointed towards the car being worth a couple of grand more at that point, which would've given me some equity to use in a trade-in. If it looks like the trade value will be lower than the GFV then I'll just throw the keys at them and walk away, there must be quite a few people in this situation, and going forward dealers/finance houses will no doubt be more conservative with their estimated guaranteed future values.
Edited by yellowbentines on Monday 25th August 11:21
It cost me over £5k to walk away from a 350Z roadster due to a move abroad - but that was still cheaper than leaving it parked in a garage for 14 months and then handing the keys back.
I wonder if garages have done any business planning about losing the revenue stream associated with people starting new PCPs on new cars at the end of their current agreement. I can't help feeling that if a punter hasn't got any equity to put towards a new car, he isn't going to be getting a new one at all...
Glen
Franchised dealers react to the marketing programmes of the manufacturers. The majority of any new car stock is bulk funded by manufacturer backed finance companies so they are the ones who are keen to shift the metal.
If you look at the 'success' of PCP product from a customer point of view, there will be a large number of people who have saved themselves serious capital loss thanks to GFV's. I think they will be more than happy to enter into this product again.
The finance companies should have already made serious debt provision as a result of the credit crunch and when the cars are re-marketed through auction they will just follow their normal sale process. I expect you will find a lot more finance companies opening 'trade centre' style outlets over the coming months to try and soften the impact.
As far as used cars are concerned. The danger with these type of threads is everyone thinks that every type of car should be £6k off the book. How can an 04 plate Astra 1.6 SXI which books at £3250 be worth £2000, it simply isn't.
Glasses guide has set its stall out for the remainder of the year being approximately 15% drop between now and the end of the year. I accept that there are cars which will be savaged over the coming months, but the previous poster who is expecting early Navaras to drop like a stone will be relatively disappointed due to the demand levels for a price range utilitarian pick up.
SLacKer said:
Doom and gloom.....
It is a really good buyers market now. Go into that Glass and Marble palace of an Audi, BMW, Merc dealer and offer em 20%-30% off the sticker and no part ex and they will not show you the door. It is about time the bunch of arrogant tts learned to appreciate customers so no bad thing.
The dealers round here are like this at the momment.
So you would expect to walk into any prestige car dealers forecourt and on a £30k offer them between £21-£24k and for them to be interested? Let me know how you get on!! It is a really good buyers market now. Go into that Glass and Marble palace of an Audi, BMW, Merc dealer and offer em 20%-30% off the sticker and no part ex and they will not show you the door. It is about time the bunch of arrogant t
ts learned to appreciate customers so no bad thing.The dealers round here are like this
at the momment.
internet-carlot said:
SLacKer said:
Doom and gloom.....
It is a really good buyers market now. Go into that Glass and Marble palace of an Audi, BMW, Merc dealer and offer em 20%-30% off the sticker and no part ex and they will not show you the door. It is about time the bunch of arrogant tts learned to appreciate customers so no bad thing.
The dealers round here are like this at the momment.
So you would expect to walk into any prestige car dealers forecourt and on a £30k offer them between £21-£24k and for them to be interested? Let me know how you get on!! It is a really good buyers market now. Go into that Glass and Marble palace of an Audi, BMW, Merc dealer and offer em 20%-30% off the sticker and no part ex and they will not show you the door. It is about time the bunch of arrogant t
ts learned to appreciate customers so no bad thing.The dealers round here are like this
at the momment.bromers2 said:
That's quite a huge hit even though it's slightly high miles.pgilc1 said:
My dealer was telling me that BMW finance just did this deal - 2006 X5 V8 petrol, £33K, four year residual deal with a GFV of £19K! Seems a bit mad, but he had heard that BMW have an £11 million 'warchest' so that they can offset any errors in values and still allow the dealers to move metal as it were.
That's how it's been done for years in the US. Look at the prices you can personal lease cars for - while there recently we saw BMW328i advertised for $297/mth, for example. It's done by setting absurdly high residual values.MitchT said:
Mat Hammond said:
M3's are brilliant value...
Which ones? E92s will be good value when they hit the low 40s and high 30s. E46s look like good value except I'd be too scared of the big end bearings failing to risk buying one.The only dealers taking massive "hits" are the ones with masses of stock at old money.
The shrewd traders read the market and react to it, they buy and sell cars at todays money, still making a margin.........the slight problem at the minute is used car prices are very "squashed up".....ie there might only be a couple of grand difference in price between a 53 plate car and a 55 plate........the 55 plate will have a bit of manufacturers warranty left on it and require less prep generally, it will be the better value for money car, as its "well behind book". The 53 plater might be around book or into book, need more prep, will have done more miles. The reason its doing into book is its in the "money hole", Ie the under £3995 bracket that dealers are moving into, they can get it on the front at an affordable price. The 55 plater might be put on at 5995 and its sticking. All about affordability for the customer at the minute. Some very keenly priced stuff still wont tempt the buyers in, as its wrong engine size, tax bracket etc etc
The market is interesting to say the least.
GlenMH said:
pgilc1 said:
They have thought about that already - the latest PCP deals require no deposit.
Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
TBH I cannot see that lasting! I would be interested to know if that is for "new customers only" or people renewing. The reason is that it is the company that supplies the finance (not necessarily the dealer) that will be taking a bath on this. Eg if the agreement is with Capital Bank, then they will be the one offering the GFV, not the dealer. And they will be the ones with the vaseline out when these unwanted cars are sent to auction.Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
The company that supplied the finance for my Zed are definitely the ones that did the best out of me giving it back early....
I've no reason to believe its for anything other than for anyone who walks in and wants to buy the car and can get finance. All three dealers i talked to - and one of them i hadnt dealt with previously - said there was no deposit required for a residual deal.
pgilc1 said:
GlenMH said:
pgilc1 said:
They have thought about that already - the latest PCP deals require no deposit.
Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
TBH I cannot see that lasting! I would be interested to know if that is for "new customers only" or people renewing. The reason is that it is the company that supplies the finance (not necessarily the dealer) that will be taking a bath on this. Eg if the agreement is with Capital Bank, then they will be the one offering the GFV, not the dealer. And they will be the ones with the vaseline out when these unwanted cars are sent to auction.Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
The company that supplied the finance for my Zed are definitely the ones that did the best out of me giving it back early....
I've no reason to believe its for anything other than for anyone who walks in and wants to buy the car and can get finance. All three dealers i talked to - and one of them i hadnt dealt with previously - said there was no deposit required for a residual deal.
OK, they're going to take a bit of hit now, but the price they "pay" for the cars means they have a lot of money to play with.
pgilc1 said:
GlenMH said:
pgilc1 said:
They have thought about that already - the latest PCP deals require no deposit.
Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
TBH I cannot see that lasting! I would be interested to know if that is for "new customers only" or people renewing. The reason is that it is the company that supplies the finance (not necessarily the dealer) that will be taking a bath on this. Eg if the agreement is with Capital Bank, then they will be the one offering the GFV, not the dealer. And they will be the ones with the vaseline out when these unwanted cars are sent to auction.Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
The company that supplied the finance for my Zed are definitely the ones that did the best out of me giving it back early....
I've no reason to believe its for anything other than for anyone who walks in and wants to buy the car and can get finance. All three dealers i talked to - and one of them i hadnt dealt with previously - said there was no deposit required for a residual deal.
One of my dealers had three Corsas bin out on zero deposit deals in one day this week and GMAC are a manufacturer based finance company like BMWFS.
jeff666 said:
not heard of this, is big end failure common on m3s
I don't know if it's common, as such, but if it does happen then you're potentially looking at £14,500 for a new engine unless you have the BMW warranty, the cost of which was ramped into the stratosphere when the problem emerged, clearly indicating BMW's confidence in their product. It is certainly common enough to prompt BMW to do a free 'enhancement' to vehicles which they say are part of the affected batch (basically 'early' E46 M3s). The problem is that I have heard of cases of cars which were refused the work on account of not being early enough examples also suffering the failure, and cars that had had the recall work done also suffering the same failure, so the only way to gain total peace of mind is to buy the warranty, which costs silly money. I'd love an E46 M3 but I wouldn't pay such a lot of money for a warranty, but wouldn't dare be without one. In my opinion BMW produced a poor product and should shoulder the cost themselves, not lump it onto their customers in the form of expensive mechanical insurance.So, there's why there isn't an E46 M3 sitting on my drive right now!
internet-carlot said:
pgilc1 said:
GlenMH said:
pgilc1 said:
They have thought about that already - the latest PCP deals require no deposit.
Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
TBH I cannot see that lasting! I would be interested to know if that is for "new customers only" or people renewing. The reason is that it is the company that supplies the finance (not necessarily the dealer) that will be taking a bath on this. Eg if the agreement is with Capital Bank, then they will be the one offering the GFV, not the dealer. And they will be the ones with the vaseline out when these unwanted cars are sent to auction.Also, they'll tell you 'wasnt it really great that you had the safety net of the PCP balloon payment given how prices have dropped so much, why dont you take another one out?'
The company that supplied the finance for my Zed are definitely the ones that did the best out of me giving it back early....
I've no reason to believe its for anything other than for anyone who walks in and wants to buy the car and can get finance. All three dealers i talked to - and one of them i hadnt dealt with previously - said there was no deposit required for a residual deal.
One of my dealers had three Corsas bin out on zero deposit deals in one day this week and GMAC are a manufacturer based finance company like BMWFS.
... BUT if you are in the position to buy a BMW, i dont think they are just as jumpy as a bank might be to give you a loan of £30K, particularly as with car finance its against the car, not unsecured like a typical bank loan.
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