Quick Finance Question
Discussion
Just a quick one about the GFV, is the end value of the car, E.G £20k rolled into the next one, or is it a small portion of it? Car is a 340i Touring, coming to then end of term in September, possibly want another 340i before they go xDrive with the next one(I'm guessing), or an M2/M3.
aaron_2000 said:
Just a quick one about the GFV, is the end value of the car, E.G £20k rolled into the next one, or is it a small portion of it? Car is a 340i Touring, coming to then end of term in September, possibly want another 340i before they go xDrive with the next one(I'm guessing), or an M2/M3.
I really hope you understood what type of finance agreement you signed for ...The GFV is a misleading name in my mind
It is a final payment due at the end of the contract
You can, at the end of the PCP hand the car back and pay no more, unless you have exceeded your mileage allowance in which case you would have to pay the excess mileage charge
You can part exchange it or sell it privately and ANY money over the final payment amount is yours to put towards your next car
You certainly won’t have £20k to use as a deposit
REALIST123 said:
How common is it for a car to be really worth more than the GFV at the end of the term?
Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
Well the GFV for ours they said would be around £17k, right now a 340i Touring with a similar spec, same age (65 Plate 16), and same mileage (20k) seems to still be mid-high 20's, I'd imagine trade value around August wouldn't be less than £19k+Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
REALIST123 said:
How common is it for a car to be really worth more than the GFV at the end of the term?
Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
It depends on the manufacturer. Some try to pitch it so that at the end of the agreement you have enough equity for a deposit on a new car so you can swap for roughly the same payments. A difficult temptation to resist, so they get to 'sell' you 2 cars and have a car to sell approved used. Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
Others, EG Mercedes, tend to pitch the GFV high to keep the monthly payments down. Though the interest on the GFV means it actually costs you more altogether.
Of course you can always lower the GFV by contracting for a higher mileage.
aaron_2000 said:
REALIST123 said:
How common is it for a car to be really worth more than the GFV at the end of the term?
Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
Well the GFV for ours they said would be around £17k, right now a 340i Touring with a similar spec, same age (65 Plate 16), and same mileage (20k) seems to still be mid-high 20's, I'd imagine trade value around August wouldn't be less than £19k+Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
aaron_2000 said:
REALIST123 said:
How common is it for a car to be really worth more than the GFV at the end of the term?
Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
Well the GFV for ours they said would be around £17k, right now a 340i Touring with a similar spec, same age (65 Plate 16), and same mileage (20k) seems to still be mid-high 20's, I'd imagine trade value around August wouldn't be less than £19k+Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
The older a car gets the less buyers that are looking to tax/insure/run an expensive barge which won’t help residuals
Very rare for the salesperson to smile and tell you you've got X amount to put towards a new car, GFV is the bid from BMW finance on your car at the end of term all things being equal (mileage/condition).
They sit as the buyer of last resort....but are usually the buyer of first/second and last resort.
They sit as the buyer of last resort....but are usually the buyer of first/second and last resort.
aaron_2000 said:
Well the GFV for ours they said would be around £17k, right now a 340i Touring with a similar spec, same age (65 Plate 16), and same mileage (20k) seems to still be mid-high 20's, I'd imagine trade value around August wouldn't be less than £19k+
There will be no "around" about it will be a fixed sum in the contract.In my experience webuyanycar may actually offer you more than the trade. Last two sales have been matched to their offer as the book quoted lower (apparently).
GFV is the rob of the nation. As above it is purely the amount that you will owe to keep the car, or you get to hand it back.
My late 2016 640 GC has a GFV / Final payment of £18,000 which makes it attractive to purchase at the end (only 6k on the clock at the moment!) but I'm very sure BMW wouldn't be offering me anything higher.
GFV is the rob of the nation. As above it is purely the amount that you will owe to keep the car, or you get to hand it back.
My late 2016 640 GC has a GFV / Final payment of £18,000 which makes it attractive to purchase at the end (only 6k on the clock at the moment!) but I'm very sure BMW wouldn't be offering me anything higher.
Find out what the actual final payment is in September.
You then need to get a settlement figure for now to see what you currently owe (should be fairly easy to work out anyway) but get a figure, and then start to look at new cars and get a part ex price for yours.
Don't just turn up with a week to go and expect to do anything other than throw the keys back, they know you haven't got enough time to get a better trade in elsewhere or sell it privately.
They rely on folk not realising they can do what they want with the car.
You then need to get a settlement figure for now to see what you currently owe (should be fairly easy to work out anyway) but get a figure, and then start to look at new cars and get a part ex price for yours.
Don't just turn up with a week to go and expect to do anything other than throw the keys back, they know you haven't got enough time to get a better trade in elsewhere or sell it privately.
They rely on folk not realising they can do what they want with the car.
aaron_2000 said:
Isn't HP quite a bit more expensive than PCP?
No, total cost is usually quite a bit less (unless it's something like a brand new 7 series where depreciation is more than the monthly payment). PCP will give you cheaper monthly payments, that's all. It's to allow average Joe to buy a car they normally wouldn't be able to afford. If you don't mind writing off your deposit and all your monthly payments then PCP is fine. Nothing to show for it at the end though, in effect you're just renting the car. Edited by Pioneer on Thursday 29th March 22:59
Roma101 said:
aaron_2000 said:
REALIST123 said:
How common is it for a car to be really worth more than the GFV at the end of the term?
Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
Well the GFV for ours they said would be around £17k, right now a 340i Touring with a similar spec, same age (65 Plate 16), and same mileage (20k) seems to still be mid-high 20's, I'd imagine trade value around August wouldn't be less than £19k+Not very, I would guess, which means that for most it’s simply a matter of handing back and starting again.
Roma101 said:
Are you talking about value if sold privately? If you are talking about what a dealer will offer, I think you might be a bit disappointed with the 340's value. I have been offered very low £20ks for a '15 65 plate with 17k miles. Excellent condition, MPPSK, new Michelins, GTechniq etc. etc.
Roma let me know if you want to sell you're MPPSK separate as i'm looking for a second hand unit!It's always worth checking whether you can get any other sort of loan, especially mortgage. On my previous car (330d Touring) the dealer financing was better, but on the replacement (M235i Convertible) using my offset mortgage was far and away cheaper: by £4,100 after 3 years (£114/month), so I just bought outright. Obviously, I have to be sensible that I still 'owe' myself and should still try and 'repay' at least the depreciation.
Edited by msej449 on Thursday 29th March 14:30
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