Car dealers and constant smoke and mirrors

[Nickbrapp]

I’m in the market for a new car, either on PCP or PCH,( no I can’t afford cash and I don’t think it will make me homeless just to impress the people down the road)

I know the car I want (a 2 series grand coupe with a couple of options, yes it’s FWD and ugly no I don’t care)

I’ve now visited 3 BMW dealers (1 to see the car, 1 to drive the car, 1 as I was passing) and a further 3 on carwow and despite the car having same list price every single one has come back with a different quote for PCP based on the same terms

Why is it so complicated and so smoke and mirrors, all where going to be financed though BMW and 2 of the dealers where even the same group!

Also why on earth is PCP so much more than PCH on the same terms when the BMW pcp interest Is realatively low?!

[CG2020UK]

Many car manufacturers are looking to move online to do away with dealerships as they now harm the brand. Dealerships will just be for maintenance work.

I think PCP is more expensive as it seems more “in trend” so takes advantage of the financially uneducated.

I actually quite like the new 2 series in the flesh.

[samoht]

Nickbrapp said:

Also why on earth is PCP so much more than PCH on the same terms when the BMW pcp interest Is realatively low?!

So, in both cases you get a brand new car, and later give them back a car that's three years old and therefore worth a lot less. Therefore the monthly payments have to cover this depreciation in each case.


One difference is that traditionally, the PCP 'final value' is set low, below the likely actual value of the car at the end of the contract. This means you're paying a bit more per month, but then at the end you end up 'in credit' by a few thousand pounds.

You could get this money out by paying the final balloon payment to own the car, and then selling it for more and pocketing the difference. Or, as is common, you can roll this money into the deposit on a new PCP on a new car (the dealer will be keen to suggest this).

Conversely on PCH you always end the deal by giving the car back at the end and no money changes hands, you don't have any option to buy. So the monthly payments are purely covering depreciation, with no extra.


The other difference is who gets the benefit of higher residual values, so if the car ends up being worth more than expected at the end of the term. In PCH it's the lease company, in PCP it's the customer. This should also contribute to PCH being cheaper as there's a possible upside for the company.

[troika]

You’re a retail customer. You’re never going to get offered the same deal from different suppliers. Each one is trying to extract the maximum profit from you which can be done in different ways. You just need to dissect the deals to see which works best for you.

[nikaiyo2]

The Grand Coupe looks better in the flesh IMHO than in photos. They had an M235 in the "aquamarine" not sure what the BMW name is when my car was being MOT and I thought it looked smart.

The dealers are not BMW, they are independent business who are allowed by BMW to brand themselves in the corporate manner. So each business will have a differing set of priorities, so will be more or less motivated to sell, even within the same group.

[nikaiyo2]

nikaiyo2 said:

The Grand Coupe looks better in the flesh IMHO than in photos. They had an M235 in the "aquamarine" not sure what the BMW name is when my car was being MOT and I thought it looked smart.

The dealers are not BMW, they are independent business who are allowed by BMW to brand themselves in the corporate manner. So each business will have a differing set of priorities, so will be more or less motivated to sell, even within the same group.

LOL I have literally just had an email from our local BMW, not sure how it compares, but seems like a really decent deal to me.

https://www.partridgebmwoffers.co.uk/bmw-m235i-gra...

[l354uge]

We are leasing through stone acre and they're really getting on my tits. Have had the car a week now and have had one letter and 4 phone calls sent to me OH trying to sell her a 3 year service package, it's a two year lease!

The cheeky tt is on the phone to her right now, trying to scaremonger her into it by saying the car needs to be serviced every year or the warranty is invalid! That's funny, because the car itself says every 2 years/20k miles. Will be going to the local seat dealer and hanging up on stone acre from now on.

[MattyD803]

One of the reasons I have leased for the last 6 years and will continue to do so is to avoid having to deal with these slime bag dealers. I choose my car from the comfort of my home, decide on the exact spec at my leisure, it gets delivered to my door, I drive it for 2/3 years, and it goes back. All for a monthly cost far less than what I could ever get via PCP or indeed a personal loan (taking everything into account).

I wobbled last year, back in November, I thought I might look into the purchase of a Golf 8 GTi....so I sent an email to a dealer via Autotrader that had a car in stock that ticked a few boxes of optional extras I was after. He called me back almost immediately with the RRP price (higher than that shown on AT, which he also thoughtfully then added Autoglym Lifeshine, GAP insurance and a Service plan into, without pointing those out. (This is 2021, isn't that illegal....?)

Anyway, I responded calmly with "Drive the deal" price (about £4.5k lower that his offer) and a decline of all 'optional extras'....and he almost immediately came back to offer me the same price, as long as I signed THAT DAY, because someone else was interested in that specific car.....sure. As for his Part Exchange offering on my wife's old car....wow, it was 60% of what WBAC were offering at the time, and half of what I ended up getting privately.

I mean, honestly, thank god it was lockdown and I couldn't have met him even if I wanted to, as i'm sure he would have a terrible suit, slick back hair and talk like a 'geezer'. And this was a big VW main dealer - the supposed premium choice of manufacturers. These people must just prey on the unprepared/unaware.....?

Never again.

Get rid of dealerships and work on a Polestar like basis - it would genuinely be better for all involved.

Edited by MattyD803 on Thursday 24th June 16:58

[Wills2]

Nickbrapp said:

I’m in the market for a new car, either on PCP or PCH,( no I can’t afford cash and I don’t think it will make me homeless just to impress the people down the road)

I know the car I want (a 2 series grand coupe with a couple of options, yes it’s FWD and ugly no I don’t care)

I’ve now visited 3 BMW dealers (1 to see the car, 1 to drive the car, 1 as I was passing) and a further 3 on carwow and despite the car having same list price every single one has come back with a different quote for PCP based on the same terms

Why is it so complicated and so smoke and mirrors, all where going to be financed though BMW and 2 of the dealers where even the same group!

Also why on earth is PCP so much more than PCH on the same terms when the BMW pcp interest Is realatively low?!

Why are you surprised that different businesses have quoted different prices? If you asked 3 builders to come round and quote for the same work would you be surprised if the pricing was different? Or would would expect them to collude to make sure it's the same....perfectly normal to get differing prices and shows the market is working correctly.

[Nickbrapp]

Yes we leased our previous car and will be leasing the next, shame as if the dealers had just offered what could pass for a good service then they would have got a sale, on a decently speced car

Gone though a broker now. £297 for 12k over 4 years with £297 upfront. Still umming and aring about adding white leather for £20 a month

[MattyD803]

Wills2 said:

Why are you surprised that different businesses have quoted different prices? If you asked 3 builders to come round and quote for the same work would you be surprised if the pricing was different? Or would would expect them to collude to make sure it's the same....perfect normal to get differing prices and shows the market is working correctly.

Hold on, the builder comparison isn't entirely fair is it? There may be differing methods of construction, materials cost variations, labour rate variations, how quick the job will get done etc etc. There is more than enough fair grounds for price variation.

The OP wants a specific car in a specific spec. What can't all dealers just provide a set / transparent price, with a standardised finance plan, which is standardised across the UK? It's a product at the end of the day, bought from the "manufacturer", much like a Apple Mac bought in Apple Store Aberdeen on the same day as one bought in Apple Store Penzance, right?

In my experience mentioned above, the dealer quote was around 15% higher than the online broker. That's an insane difference, and for what? Both cars were UK supplied and coming from part of the VW main dealer network. And that price was before he bolted any extra's on (that I didn't want or ask for) nor does that include how much he under egged my Part Ex price.

Edited by MattyD803 on Thursday 24th June 16:53

[MattyD803]

Nickbrapp said:

Yes we leased our previous car and will be leasing the next, shame as if the dealers had just offered what could pass for a good service then they would have got a sale, on a decently speced car

Gone though a broker now. £297 for 12k over 4 years with £297 upfront. Still umming and aring about adding white leather for £20 a month

Agreed/

The crazy thing is that even with leasing, main dealers won't give you the same price as each other, which is an utter nonsense.

As you'll see on the leasing thread, if you want to lease a VW (for example), you need to get your quote from one of maybe just 3 or 4 specific outlets in the UK (e.g. JCT600, Martins, Inchcape & Listers) if you want to be sure of a sensible price.

My local VW dealer (Citygate) were not remotely interested in dealing with me on a PCH basis, let alone matching or beating a quote from another dealer.

Even service costs can differ massively - Mini Countryman Cooper S - first service at 18k/2yr was quoted at £375 at Cooper BMW Reading, yet I only paid £260 with Dick Lovett in Hungerford. Even the DL Swindon branch was nearly £300!! How is this justifiable?

All in all, I avoid at all costs where I can.

Edited by MattyD803 on Thursday 24th June 16:56

[HTP99]

MattyD803 said:

Nickbrapp said:

Yes we leased our previous car and will be leasing the next, shame as if the dealers had just offered what could pass for a good service then they would have got a sale, on a decently speced car

Gone though a broker now. £297 for 12k over 4 years with £297 upfront. Still umming and aring about adding white leather for £20 a month

Agreed/

The crazy thing is that even with leasing, main dealers won't give you the same price as each other, which is an utter nonsense.

As you'll see on the leasing thread, if you want to lease a VW (for example), you need to get your quote from one of maybe just 3 or 4 specific outlets in the UK (e.g. JCT600, Martins, Inchcape & Listers) if you want to be sure of a sensible price.

My local VW dealer (Citygate) were not remotely interested in dealing with me on a PCH basis, let alone matching or beating a quote from another dealer.

Even service costs can differ massively - Mini Countryman Cooper S - first service at 18k/2yr was quoted at £375 at Cooper BMW Reading, yet I only paid £260 with Dick Lovett in Hungerford. Even the DL Swindon branch was nearly £300!! How is this justifiable?

All in all, I avoid at all costs where I can.

Edited by MattyD803 on Thursday 24th June 16:56

Most likely as they knew they couldn't get close, companies/dealers that specialise in CH will get far better terms from the manufacturer than dealers who don't.

[hepy]

Would love to lease a car via a local dealer, but they are all a PITA to deal with, just getting a lease quote from them, without battling through the wall of PCP quotes is hard work.

Then there is all the extras they add on!

Or, you can have a brew, do a few clicks, and get a decent price, then a car appears a few months later.

The same will happen with 2nd hand cars as well, certainly ones less than 6-7 years old and mainstream models.

[Hennerz1994]

samoht said:

So, in both cases you get a brand new car, and later give them back a car that's three years old and therefore worth a lot less. Therefore the monthly payments have to cover this depreciation in each case.


One difference is that traditionally, the PCP 'final value' is set low, below the likely actual value of the car at the end of the contract. This means you're paying a bit more per month, but then at the end you end up 'in credit' by a few thousand pounds.

You could get this money out by paying the final balloon payment to own the car, and then selling it for more and pocketing the difference. Or, as is common, you can roll this money into the deposit on a new PCP on a new car (the dealer will be keen to suggest this).
.

I didn’t find on my last car a Audi A5. The gfv was 17k and similar cars were selling at dealers for around 15k. I did go over the mileage slightly but only around 3k miles over 4 years. The value of the car was so low the dealer wouldn’t even tell me what they would offer and suggest just giving it back.

[samoht]

Hennerz1994 said:

samoht said:

So, in both cases you get a brand new car, and later give them back a car that's three years old and therefore worth a lot less. Therefore the monthly payments have to cover this depreciation in each case.


One difference is that traditionally, the PCP 'final value' is set low, below the likely actual value of the car at the end of the contract. This means you're paying a bit more per month, but then at the end you end up 'in credit' by a few thousand pounds.

You could get this money out by paying the final balloon payment to own the car, and then selling it for more and pocketing the difference. Or, as is common, you can roll this money into the deposit on a new PCP on a new car (the dealer will be keen to suggest this).
.

I didn’t find on my last car a Audi A5. The gfv was 17k and similar cars were selling at dealers for around 15k. I did go over the mileage slightly but only around 3k miles over 4 years. The value of the car was so low the dealer wouldn’t even tell me what they would offer and suggest just giving it back.

Yeah, since the higher the GFV the lower the monthly payments, I understand there has been a tendency for manufacturers to gradually become more optimistic with the final value to the point that many people were ending up with no equity at the end of the deal. If the final value is too optimistic then it becomes effectively no different from a hire contract, so might as well do that if it's cheaper.

I assume that lately the rise in used car values has taken them back above most GFVs, but that's a bit of a one-off unpredictable situation, no reason to assume that it'll be the case three years from now.