Ask a car salesman anything...anything at all.
Discussion
Wooda80 said:
Sheepshanks said:
What you'd expect (with any brand) is there's be some sort of incentive to support the value of your current car so as to make it "easier" to stay with the brand. That's the whole point of PCP, as far as manufacturers are concerned.
Once you're handing the car back, the tie is broken and you may well wander off and buy something else.
Not sure I follow your logic on that. Once you're handing the car back, the tie is broken and you may well wander off and buy something else.
PCP and finance in general is useful to the manufacturers as a marketing tool as it gives them a whole different spectrum of things about which to market to you ( finance offers as well product news, changing for the same monthly payment etc ), but it still relies on the customer engaging with the dealer to renew.
Even if you have equity in the car you can just as easily wander off and realise that equity at whichever make you choose next.
ETA - As syl said, if the car is in negative equity at the end then the buyer has actually benefitted from monthly payments that were lower than they should have been to fully pay down the depreciation.
Edited by Wooda80 on Tuesday 23 July 07:16
Wooda80 said:
Sheepshanks said:
What you'd expect (with any brand) is there's be some sort of incentive to support the value of your current car so as to make it "easier" to stay with the brand. That's the whole point of PCP, as far as manufacturers are concerned.
Once you're handing the car back, the tie is broken and you may well wander off and buy something else.
Not sure I follow your logic on that. Once you're handing the car back, the tie is broken and you may well wander off and buy something else.
....
I'm not saying that doesn't happen - just that from a customer retention POV it's bonkers, especially for a manufacturer of highish value vehicles in a soft market.
Sheepshanks said:
PCP is all about keeping car factories busy churning out new cars. So when a dealer calls an exisiting PCP customer 6 months or so before their PCP ends to talk about moving them into a new car it's completely ridiculous to tell the customer their car will have a lower PX value than its GFV.
As someone who has made hundreds of such calls, guess what he first thing they tend to ask is though? 
Which is why retention prospecting is an utter ball-ache...
Sheepshanks said:
Wooda80 said:
Sheepshanks said:
What you'd expect (with any brand) is there's be some sort of incentive to support the value of your current car so as to make it "easier" to stay with the brand. That's the whole point of PCP, as far as manufacturers are concerned.
Once you're handing the car back, the tie is broken and you may well wander off and buy something else.
Not sure I follow your logic on that. Once you're handing the car back, the tie is broken and you may well wander off and buy something else.
....
I'm not saying that doesn't happen - just that from a customer retention POV it's bonkers, especially for a manufacturer of highish value vehicles in a soft market.
R.Sole said:
As I said earlier about RangeRover at the moment which have taken a real bath recently.
Sure - but there's going to be hefty discounts on new ones so the factory needs to move some of that into supporting px values for exisiting customers. Would be pretty amazing if they're not doing that.4941cc said:
Sheepshanks said:
PCP is all about keeping car factories busy churning out new cars. So when a dealer calls an exisiting PCP customer 6 months or so before their PCP ends to talk about moving them into a new car it's completely ridiculous to tell the customer their car will have a lower PX value than its GFV.
As someone who has made hundreds of such calls, guess what he first thing they tend to ask is though? What's the price to change?
Why should I change?
Who is John Galt?
Sheepshanks said:
Sure - but there's going to be hefty discounts on new ones so the factory needs to move some of that into supporting px values for exisiting customers. Would be pretty amazing if they're not doing that.
Isn't that what a "finance contribution" effectively does?How important is Brand Loyalty anyway - What proportion of PCP buyers are staying with the same brand?
silentbrown said:
Isn't that what a "finance contribution" effectively does?
How important is Brand Loyalty anyway - What proportion of PCP buyers are staying with the same brand?
Not really. How important is Brand Loyalty anyway - What proportion of PCP buyers are staying with the same brand?
The deposit contribution is there as an incentive on the new car price rather than to dig you out of any negative equity.
If you are near enough to the end of your agreement then the negative equity is not your problem, it's the finance company's
Wooda80 said:
silentbrown said:
Isn't that what a "finance contribution" effectively does?
How important is Brand Loyalty anyway - What proportion of PCP buyers are staying with the same brand?
Not really. How important is Brand Loyalty anyway - What proportion of PCP buyers are staying with the same brand?
The deposit contribution is there as an incentive on the new car price rather than to dig you out of any negative equity.
If you are near enough to the end of your agreement then the negative equity is not your problem, it's the finance company's
I really like the leasing model, unless you are going to buy a car to keep for a long, long time. My current Volvo V90 Crosscountry is no deposit, £274 a month for 18 months then give it back. No cash, PCP or HP deal could ever get close to that if I wanted to return it after 18 months.
PCP/HP makes more sense if you like to add options and/or you might want to keep the car at the end.
PCP/HP makes more sense if you like to add options and/or you might want to keep the car at the end.
Camelot1971 said:
I really like the leasing model, unless you are going to buy a car to keep for a long, long time. My current Volvo V90 Crosscountry is no deposit, £274 a month for 18 months then give it back. No cash, PCP or HP deal could ever get close to that if I wanted to return it after 18 months.
PCP/HP makes more sense if you like to add options and/or you might want to keep the car at the end.
Pcp SHOULD make sense if you want a new version of your current car next time round, or even the same model.PCP/HP makes more sense if you like to add options and/or you might want to keep the car at the end.
HTP99 said:
Renault and Dacia keep an eye on all agreements that have up to circa a year left to run and will offer loyalty money depending on how much the wrong way that particular owner is, on top of any other a viable offers.
Exactly - if LandRover aren't doing that (and it seems from earlier comments they're not) then they might as well tell customers to f-off. Of course some will still take another LandRover anyway - so I suppose the balance they have to get right is figuring out how many customers they can bear to lose, vs the cost of keeping them.
Camelot1971 said:
I really like the leasing model, unless you are going to buy a car to keep for a long, long time. My current Volvo V90 Crosscountry is no deposit, £274 a month for 18 months then give it back. No cash, PCP or HP deal could ever get close to that if I wanted to return it after 18 months.
PCP/HP makes more sense if you like to add options and/or you might want to keep the car at the end.
It's about looking at all the funding options and seeing which is cheapest to run a car over a set amount of time. If you've a particular vehicle in mind, then leasing may work out more expensive. As you know, leasing is about jumping on what's good value at the time you're looking and being open minded as to what you get PCP/HP makes more sense if you like to add options and/or you might want to keep the car at the end.
Fast Bug said:
It's about looking at all the funding options and seeing which is cheapest to run a car over a set amount of time. If you've a particular vehicle in mind, then leasing may work out more expensive. As you know, leasing is about jumping on what's good value at the time you're looking and being open minded as to what you get
Exactly this , I got offered a Golf R a few years ago , cracking deal except it was manual with basic wheels that the boss didn’t like , can’t remember if you could even pick your colours.She wanted specific extras on it , all the deals were long gone by the next day.
Could have kicked myself.
Camelot1971 said:
I really like the leasing model, unless you are going to buy a car to keep for a long, long time. My current Volvo V90 Crosscountry is no deposit, £274 a month for 18 months then give it back. No cash, PCP or HP deal could ever get close to that if I wanted to return it after 18 months.
PCP/HP makes more sense if you like to add options and/or you might want to keep the car at the end.
Exactly this. I also like the randomness of the deals, 6 months ago I would never have imagined in my wildest dreams my staid A6 would be replaced by a Leon Cupra.PCP/HP makes more sense if you like to add options and/or you might want to keep the car at the end.
Sheepshanks said:
HTP99 said:
Renault and Dacia keep an eye on all agreements that have up to circa a year left to run and will offer loyalty money depending on how much the wrong way that particular owner is, on top of any other a viable offers.
Exactly - if LandRover aren't doing that (and it seems from earlier comments they're not) then they might as well tell customers to f-off. Of course some will still take another LandRover anyway - so I suppose the balance they have to get right is figuring out how many customers they can bear to lose, vs the cost of keeping them.
As it is, I think I'm going to keep it, although the cost to do so over the next 3 years isn't that much different once you factor in a warranty, tracker subscription, new tyres and opportunity costs.
syl said:
I'd rather them tell it like it is and give me the real trade-in value rather than inflate it but give me less discount off the new one than I would otherwise have got. The salesman knows I'd be shopping around anyway and would expect them to match CarWow, etc., so he doesn't have the option to do that.
As HTP99 says, it's done with loyalty money so should be invisible to the buyer. So you might shop around but you should find no-one can match the p/x offered by your current dealer.Of course what sometimes also happens behind the scenes is "conquest" money, where dealers get extra money to move someone away from their existing brand.
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