Current used car prices and future GFV's

[adaM3]

I'm currently waiting, and waiting, and waiting, on a leased CLA 45S. I started looking around elsewhere, and have found myself pondering over the 2022 X3 M40i.

The Merc lease is pretty good, and there are no real deals on new cars as we all know. My heart is saying go for the BMW, but the GFV that BMW put on the car is so low that the finance package isn't very good. But, if the GFV ends up being £10k higher than they say (which in my book it should be) then they even themselves out somewhat.

But... the markets are mental at the moment, especially used. My fear is that in 3-4 years time used market takes a massive hit and this impacts negatively on my man maths!!

What do we think will happen with used cars in the coming years?

[ZX10R NIN]

The truth is no one knows, prices of used cars will drop off but I don't expect to see them back to the equivalent levels, the UK was always had the lowest used car prices in Europe I'd expect to see prices level off to similar levels to Europe.

But that's just my expectation.

[griffter]

My energy deal comes to an end today and the only deals on offer (other than SVR) are 400% (1 year fix) and 300% (2 year fix) of the current monthly cost.

If that situation is reflected across other households, I can see car budgets and hence discretionary buyers disappearing pretty quickly. Supply problems or not, I think economics is going to turn the used car market quite considerably in 2022.

[cossy400]

Strange times her this convo with the BIL this week,


Due to change our X4 but have decided to hang it out or another 6 months to a year and see how the land lies.

[samoht]

adaM3 said:

My heart is saying go for the BMW, but the GFV that BMW put on the car is so low that the finance package isn't very good. But, if the GFV ends up being £10k higher than they say (which in my book it should be) then they even themselves out somewhat.

But... the markets are mental at the moment, especially used. My fear is that in 3-4 years time used market takes a massive hit and this impacts negatively on my man maths!!

This feels like you've answered your own question here. You've identified a real reason why used car values might decline more than usual. BMW Financial Services are undoubtedly aware of this possibility, hence why they're unable to guarantee that the car will be worth more than that in three years' time.

With brand new 2022 cars, I think there's also a slight risk of values declining due to a shift to EVs. Overall it's much harder now to predict future values than it was up to three years ago.

It's quite possible that the GFV is lower than the most likely value, because the spread of possible outcomes is quite wide and BMW don't want to risk end up losing £10k each on half a million cars. So it may be likely that the value ends up above the GFV, but the value quoted is a sensible conservative one for them to offer.

My perception is that depreciation will eventually return to how it was before, because the chip shortage is temporary and I can't quite see any permanent change that would justify things being different once that's worked its way through, which it likely will have done in 3-4 years. But that's just a guess really.

Bottom line is, who knows, future values are unpredictable, up to you if you want to take on that bet, vs leasing and paying someone else to hold the risk.