Trade in value

[Broch Hunter]

If only you could erase history, #yourfirstpost
View attachment 60877

Perhaps Paul is doing some academic research and using the forum and the views/opinions of members as a source of material ?

 

[Big Ron]

And spend a lot more time at the Dealership if some of the press reports are to be believed.

It’s not just press reports WelshGas. Had a new 2010 Vogue SE, which was the most comfortable car I’ve ever had to drive but....I rarely got to drive it, always at the dealers with a part broken or “we’ve run our diagnostics and it’s an unknown fault but we recommend a new <insert ANY name of part> for £3,500”.
My last service, plus new TFT screen which went 1 month after 3 year warranty, was over £8,000. Appallingly unreliable. Would never have one again even if I was given one.

Anyway, that was a bit of a side-step.....don’t agree with the leasing advice on Cali’s, in fact I’d go further and say it is the long term finance deals which has allowed VW to drive the prices up unrealistically high.
Bah humbug!

 

[Big Ron]

One of my "reserve" automotive choices is an LPG powered Range Rover Vogue. I have been following this market for a while now and you can pick up a 10 year old face lifted model with massive spec for c. £6k. In the Vagophile book that is a good deal for long term ownership, especially if you have a Range Rover specialist mechanic as a friend. At 10 years old, most faults will have revealed themselves and been remedied. After some protracted deliberation, I went for a California, but that doesn't mean the Range Rover possibility is dead.

Sorry Mate, but I hope he’s a good friend as I think you’ll be spending a lot of time visiting him. Perhaps he’ll hook up some electrics for you to stay, permanently?

As with all things, if you ask other people they might have a different experience? (Although I did become friendly with several other Range Rover customers just by meeting them so often at the dealers.....so maybe not?)

 

[Karlos]

One of my "reserve" automotive choices is an LPG powered Range Rover Vogue. I have been following this market for a while now and you can pick up a 10 year old face lifted model with massive spec for c. £6k. In the Vagophile book that is a good deal for long term ownership, especially if you have a Range Rover specialist mechanic as a friend. At 10 years old, most faults will have revealed themselves and been remedied. After some protracted deliberation, I went for a California, but that doesn't mean the Range Rover possibility is dead.

My point exactly, you would run a mile probably if you saw a 10 year old Cali for 6K

 

[oliver100]

if you buy a California with the current discount rate on pcp with the associated servicing and warranty package and finance the balloon with a personal loan, it would currently still work out less than the rrp cash price of the vehicle that VW quote. Sure you will loose some money in depreciation like you would if you paid cash but I don’t see what the beef if someone wants to do that with their money and doesn’t have 60k lying around. Leasing doesn’t seem like a great option to me with this is mind as you can recover some of your expenditure this way even if you you finance the ballon with a short term loan and immediately sell. I had the option to sell my air cooled 911 or finance a California and went the finance route, but each to their own...

 

[Legin]

I think the beef is it was being explained as a lower cost alternative to outright purchase for things that depreciate. When I did my calcs way back when on a new Golf even if i borrowed the money it was cheaper than a pcp and handback. I bought it cash in the end.
Fully get that it suits some people like yourself but end of the day someone has to pay the depreciation and interest and its always the buyer.
I bought my Cali on PCP then paid it off immediately to get the £2k contribution. If you can borrow cheaper than the PCP interest rate then thats another option.

PCP only really protects against a massive unpredicted market shift and guess what its just happened, I would pcp or lease a high financial risk vehicle. A friend is handing her slc300 back as its only worth the same as the Balloon.

 

[oliver100]

he was talking about outright leasing though unless I miss understood which is a completely different proposition. The problem with any kind of loan over 25k is the apr is rubbish so even if you have a 30k+ In cash you will be paying well over 6% apr, I know you could re-mortgage but that something I wasn’t comfortable with even if it was slightly cheaper in the long run. I looked at 30k plus vehicles with big miles on which have done most of their deprecating, but they will require at least some maintenance and lets be honest if you chucked your money into a well mainted 180 that ended up lunching it’s engine you would be on your way to new car depreciation money without the other benefits. Again it’s all about personal choice though as long as you go in with your eyes open imo

 

[oliver100]

For the record I would rather walk than drive a modern Range Rover but that’s more a personal prejudice than anything else!

 

[Legin]

I wouldnt buy a 180 either. But given we now have the benefit of hindsight I would buy a 140SE in a shot and its hard to imagine any issue that would significantly dent the economics. I nearly did and sometimes think should have done.
However I didnt so it confirms your personal choice point.

 

[Hamish S]

HP, PCP, leasing or cash purchase all have their place each one has good points and bad. The key is what suit's the purchasers need at the time and what risks they are prepared to take. Paying cash, if you have it, upfront looks like the cheapest deal unless interest rates rise sharply above the rate it could have been borrowed at the time of purchase. But may also miss out on offers like deposit contribution & or free servicing.

HP, if you don't have the cash but want to purchase outright then this may be the one for you but always check the interest rate against other lenders (i.e. the bank). HP means that you get a fixed rate of interest throughout the loan period, fixed monthly repayment and get the deposit contribution and free servicing offers. Great if interest rates are low or likely to go up during the loan period and make it easier to budget long term but have a higher monthly repayment than a PCP as you are repaying more capital each month.

PCP's differ to an HP agreement in that you are expected to either return the vehicle or pay a balloon payment in order to purchase the vehicle at the end of the contract. That balloon payment is based on what the lender feels is going to be the market value for the vehicle at the end of the contract. Good news is that if the market value is much less than the balloon payment then it may be cheaper to hand the keys back and walk away. If not and you want to own the vehicle then you either need to stump up the cash for the balloon payment or you will need to take out a further loan. This gets complicated in that you need to agree an annual mileage for the vehicle and can be expensive if you go over it. This needs to be considered if you want to hand the vehicle back. Another risk is at the end of the contract interest rates may have risen so any further loan could be at a higher rate.

Personal leasing is a different ball game and not very often offered. It's basically a PCP that doesn't let you make the purchase at the end (so check it out). This type of agreement is usually for businesses where they include in the monthly price the cost of servicing , tyres etc.. Again you have to agree annual mileage and can be expensive if you wish to chop in early or go over the mileage. Businesses often use this option as it has tax advantages. Not my personal choice but may be yours.

These are just my views it's up to the buyer to decide on what they think best. My own choice at the moment, as I have the cash, is to purchase on a PCP, get the deposit contribution and free servicing, and the pay off the PCP after making the first repayment. AS VW are offering £1,000 deposit contribution this is cheaper than a couple of month's interest and I win.

 

[Big Ron]

I wouldnt buy a 180 either. But given we now have the benefit of hindsight I would buy a 140SE in a shot and its hard to imagine any issue that would significantly dent the economics. I nearly did and sometimes think should have done.
However I didnt so it confirms your personal choice point.

I think I’ve missed out on a lot of chat about 180’s. I’ve had my 2014 since new (55k miles) and it’s been great. Is this all 180’s? Before/after a certain date?
I’m not particularly concerned, just interested....

 

[GrannyJen]

Perhaps Paul is doing some academic research and using the forum and the views/opinions of members as a source of material ?

As someone who has supervised a lot of academic research programmes the first thing I drum into my research students is to get your associations right.

Using "also" to associate the depreciation rate with a RR compared to a Cali is like using "Genghis Khan, also Sister Theresa"

 

[reserves]

I think I’ve missed out on a lot of chat about 180’s. I’ve had my 2014 since new (55k miles) and it’s been great. Is this all 180’s? Before/after a certain date?
I’m not particularly concerned, just interested....

The potential issue with the 180bhp is believed to be resolved by 2014. Plenty of threads on it but it’s 2010-2012 engines which potentially are of concern.

 

[Legin]

AS VW are offering £1,000 deposit contribution this is cheaper than a couple of month's interest and I win

FWIW you dont need to make any payments at all. If you do it within the 14 day cooling off period you only pay the daily interest charge thats it. You win even more.

I did this and kept the 2k and servicing deal in case you ask

 

[JonoSlack]

I'm a real newbie around here - and I'm still not certain whether I got a fantastic deal, or I got ripped off! We bought a T6 2018 reg Ocean (4 motion lots of extras) with 614 miles and only owned but VW for £49,000 (I have really failed to work out how much it should have cost!). But maybe it reflects the current rather odd market

 

[reserves]

I'm a real newbie around here - and I'm still not certain whether I got a fantastic deal, or I got ripped off! We bought a T6 2018 reg Ocean (4 motion lots of extras) with 614 miles and only owned but VW for £49,000 (I have really failed to work out how much it should have cost!). But maybe it reflects the current rather odd market

Sounds ok to me

 

[WelshGas]

I think I’ve missed out on a lot of chat about 180’s. I’ve had my 2014 since new (55k miles) and it’s been great. Is this all 180’s? Before/after a certain date?
I’m not particularly concerned, just interested....

My 2014 is now on 97,000.

There was a problem with the CFCA 180 engine built between 2010/11.

There is a Facebook group that has its own theories centred around the EGR valve Cooler.

 

[steve_b]

so the big question is - why are the book values wrong? Surely if the market consistently pays "over the book value" for a produce, then the book value is wrong - not that the market is consistently stupid.

Presumably this means that if a Cali is written off, you would have the mother of all battles with the insurance company to get a fair value from it.

(Ironically, I bought mine for book value but it appears that I am in a crowd of one - a 2008 SE for £15,000. It was a rushed sale from someone out of the country - and it was enough more than they were offered in Switzerland to make it worth re-importing back to the UK... )

 

[soulstyledevon]

I really don’t get PCP deals.
As a 41 year old man. I’ve seen the majority of my friends enter into these and once in, people are trapped into renewing the deal every 2-3 years. Great if you like owning brand new cars.
But absolutely tragic for the house finances...

Done the sums time and time again. Had the discussion a million times.
I just don’t get it...?

You may as well throw hard earned money in the bin.

 

[OGII]

I really don’t get PCP deals.

There are a number of factors, but one is generational. The younger you are the more used you are used to renting whatever it is you "need" and getting a higher end product than you can "afford". As well as housing, it's cars, iphones, music through Spotify etc. The concept of ownership and working/ saving for the essentials, then the luxuries has changed. Marketing and peer pressure also contribute. Why drive the Kia you can afford when you can pcp a BMW. Why suffer with last year's iphone when you can get the shiny new one. In some ways I kind of understand it, especially as the cost of housing can make many young people want to live for the moment rather than save indefinitely.

Having the money to make financial choices is such a game changer, witness how many take the PCP, benefit from the incentives and then pay it off.

 

[ArunAlec]

There are a number of factors, but one is generational. The younger you are the more used you are used to renting whatever it is you "need" and getting a higher end product than you can "afford". As well as housing, it's cars, iphones, music through Spotify etc. The concept of ownership and working/ saving for the essentials, then the luxuries has changed. Marketing and peer pressure also contribute. Why drive the Kia you can afford when you can pcp a BMW. Why suffer with last year's iphone when you can get the shiny new one. In some ways I kind of understand it, especially as the cost of housing can make many young people want to live for the moment rather than save indefinitely.

Having the money to make financial choices is such a game changer, witness how many take the PCP, benefit from the incentives and then pay it off.

It’s going to be interesting to see the impact of the current crisis and the looming downturn in the economy. I imagine there are a lot of households who will struggle to keep up repayments.
I’m currently looking at buying a new (used) car and it does make me smile when the salesperson asks what I‘m looking at spending, then immediately try to get me to up my budget by offering a finance deal.

 

[Legin]

Its totally aimed at what you say ie the person that wants a new car every 2/3 yrs. Cars are now white goods to all intents just like mobile phones.
Once people wake up to it like they have the iphone then things will reverse but it will be carnage.

PCP has destroyed the top end car market for the simple reason you dont have to be minted to own one and thats bad in the longer term because the market is being flooded. Witness JLR, Mclaren and Aston in deep sing producing too many cars.

The premium brands are now the same as the old stack em high brands from a quality viewpoint and mostly lower quality than in the 90,s.
All the cheesy plastic bling that looks low rent, its the equivalent of moving from mechanical to battery watches.

So the answer is to buy the 2 / 3yr old hand backs ? Unfortunately possibly not for two reasons.
High potential repair costs due to ever more complexity and high repair costs.
Secondly PCP is thought to be the next sub prime and I certainly subscribe. The handbacks appear on dealer forecourt at potentially over inflated prices because the deal residual values are high to keep monthly down.

So at some point when the ponzi stops the market crashes and ironically the winner is the PCP person as they just hand back and thats that. The loser will be the private buyer.

This is not lost on me so I recently got out of my wholly owned X3, the proverbial depreciator and frankly not any better than a Kia.
I have kept my 2010 porsche (toy) and some cheapies like 2013 Citigo and 2014 Yeti all of which are easily repaired and low financial risk.

Way around all this ?
Well buy older vehicles and simpler vehicles that are fixable by the local garage, Also buy specialist stuff non white goods if you like.
The special edition 1 of xxx. The Cali fortunately fits this especially the Beach as its NLA and is still just about fixable.
If it goes EV then its done for and will drop like the proverbial as have all EV,s - iphone again.

Why are trade book values wrong ? They often are for more niche stuff as they are mixed in with the mainstream stuff.

 

[soulstyledevon]

Isn’t it sad, the state of our throw away society...
I’ve always thought best to look after whatever I buy. Use it and then recycle.
I follow a minimalist lifestyle best I can. There’s no happiness in-purchasing stuff...

 

[Borris]

There are a number of factors, but one is generational. The younger you are the more used you are used to renting whatever it is you "need" and getting a higher end product than you can "afford".

I think this depends on your perspective. From mine, your post should read, can't "afford".

 

[OGII]

I think this depends on your perspective. From mine, your post should read, can't "afford".

Oh Borris, you say tomato, I say potato.

I thought in the context of the sentence it read ok - getting a higher end product than you can "afford".

Either way go Team Beach.