Retained value

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Simmo63
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Retained value

Post by Simmo63 »

I will finally take delivery of my Polo GTI+ on monday following a 9 month wait, to benefit from VWs deposit contribution I have agreed to a 48 month PCP that will add a figure of £5267 to the purchase price! It’s a while since i have financed a car this way, I remember that companies used to give you a projected value of the car after 3 or 4 years, are there any reliable figures of the GTI+ retained value after 12, 24, 36 & 48 months?
PhilArnold
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Re: Retained value

Post by PhilArnold »

Simmo63 wrote: Sat Sep 05, 2020 8:56 am I will finally take delivery of my Polo GTI+ on monday following a 9 month wait, to benefit from VWs deposit contribution I have agreed to a 48 month PCP that will add a figure of £5267 to the purchase price! It’s a while since i have financed a car this way, I remember that companies used to give you a projected value of the car after 3 or 4 years, are there any reliable figures of the GTI+ retained value after 12, 24, 36 & 48 months?
Within your PCP agreement it will give you a GMFV (Guaranteed minimum final value) that VWFS says how much your car is worth at the end of the agreement

In reality the value and part ex price will usually be higher than this at the end of the agreement, so you have equity in the car to use as a deposit for your next car if you want
monkeyhanger
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Re: Retained value

Post by monkeyhanger »

Simmo63 wrote: Sat Sep 05, 2020 8:56 am I will finally take delivery of my Polo GTI+ on monday following a 9 month wait, to benefit from VWs deposit contribution I have agreed to a 48 month PCP that will add a figure of £5267 to the purchase price! It’s a while since i have financed a car this way, I remember that companies used to give you a projected value of the car after 3 or 4 years, are there any reliable figures of the GTI+ retained value after 12, 24, 36 & 48 months?
I take it you mean total interest on your PCP is £5267? That is hefty! Why a 4 year PCP? You should have access to the VW deposit contribution with a 3 year PCP. Or are you also getting the "3 months on us" promotion that many of te cars in the VAG group are getting right now (first 3 months of PCP payments waived by VWFS)? That usually requires a 46 month term.

As VWs are getting more expensive, for those that PCP, 48 month terms are becoming more favourable than 36 month terms, but it;s a bit iffy having a new car on financ beyond the warranty term You'd hope that VW would increase its warranty term to 4 or 5 years like many other marques have done, e.g. French, Italian, Japanese and Korean marques. Even thehistorically unreliable Alfa Romeo give a 5 year warranty now.

I haven't looked into it lately, but back when the RRP on a GTI+ was £23k and you could get one with a few options for under £21k, the GFV was around £11500 at 3 years, giving a realistic £13k p/x value. As the RRP has gone up, but the "real" price hasn't gone up appreciably because you now get deposit contributions that weren't available on the GTI+, i'd still expect that to be the case.

If you get rid at a year old, you'll lose a lot of money, because you have a second hand car that has to be priced to appeal over a new one and still the dealership wants a 20% margin. If you see a 1 year old GTI+ on a used forecourt for £21k and willing to accept £20k, you can bet that the person who traded it in only got £16-17k for it.

I got rid of my Aug 2018 GTI+ at 22 months old. I paid £20800 for it (RRP was £23k) and was offered £15k at 2 trusted buyers (the guys who bought my Golf R for appreciably more than the VW dealerships offered, and a few VW dealers).

Any time in year 1, expect to get 65-70% of RRP in part-ex (30% depreciation per year)
At the end of year 2, expect to get 60-65% of RRP (17.5% depreciation per year)
At the end of year 3 expect to get 50-55% of RRP (15% depreciation per year)
At the end of year 4 expect to get 40-45% of RRP (13.75% depreciation per year)

As you can see, the longer you keep it, the less impact the depreciation has in any given year as that year 1 depreciation is diluted the longer you keep it. Also though, the depreciation advantage of keeping it 4 years rather than 3 is tiny and is likely eaten up by edditional PCP interest if you are PCPing.

That £5267 PCP interest over 4 years is likely to only be £3500 over 3 years. so taking it to 4 years, you pay £1767 more in interest to save about £1300 in depreciation over the term keeping it 4 years rather than 3. There's little to no advantage keeping the car 4 years, and in your last year of ownership you'll have no warranty and be copping for the cost of another (minor) service, brake fluid change, maybe your second set of front tyres in addition to the set the car came with and possibly a DSG fluid change if you exceed 40k miles. I'd stick to 3 yearsunless you are getting that "3 months on us" promo that could save another grand.
Simmo63
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Re: Retained value

Post by Simmo63 »

My intention is to use the 14 day opt out and pay off the balance, I will probably keep the car a couple of years, but agreed to the pcp for the deposit contribution, as the car was price locked in January I will avoid the recent VW price increase, I also purchased the car through carwow and got a dealer discount, overall the price is £22,694 with all the extras I chose, if you spec the car on the latest configurator it comes in at £27,400, so I’m happy at that👍 My worry is the cars depreciation will be worse with the demand & popularity of fully electric cars🤔
monkeyhanger
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Re: Retained value

Post by monkeyhanger »

Simmo63 wrote: Sat Sep 05, 2020 10:53 am My intention is to use the 14 day opt out and pay off the balance, I will probably keep the car a couple of years, but agreed to the pcp for the deposit contribution, as the car was price locked in January I will avoid the recent VW price increase, I also purchased the car through carwow and got a dealer discount, overall the price is £22,694 with all the extras I chose, if you spec the car on the latest configurator it comes in at £27,400, so I’m happy at that👍 My worry is the cars depreciation will be worse with the demand & popularity of fully electric cars🤔
14 day optout is best way to go if you have the readies - Did that recently for my nearly new Audi A4 to score for 2 free services.

Fully electric cars still aren't that popular - expensive, range anxiety for most models and a charging infrastructure that currently only supports a theoretical 3% of cars on the road being electric. If you live in a flat or a house without a drive then you're screwed for home charging. I'd be worried about buying an ICE car in 2030.
Nodster
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Re: Retained value

Post by Nodster »

Simmo63 wrote: Sat Sep 05, 2020 10:53 am My worry is the cars depreciation will be worse with the demand & popularity of fully electric cars🤔
I wouldn't worry about that. Electric cars, although good, still are priced more than their combustion equivalent. Well... at least the one's I've looked at. Usually bumps the price by a few thousand.

Then the whole issue of where to charge, how long it takes, are the charge points fast charge or not, are they the right type to fit that model car, etc, etc. For me, there is just not enough infrastructure or scrappage incentive to make people en mass jump ship over to electric. And if everyone did move to electric we'd probably not have enough juice in the grid to charge them all. :lol:
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PO10ASH
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Re: Retained value

Post by PO10ASH »

Simmo63 wrote: Sat Sep 05, 2020 10:53 am My intention is to use the 14 day opt out and pay off the balance, I will probably keep the car a couple of years, but agreed to the pcp for the deposit contribution, as the car was price locked in January I will avoid the recent VW price increase, I also purchased the car through carwow and got a dealer discount, overall the price is £22,694 with all the extras I chose, if you spec the car on the latest configurator it comes in at £27,400, so I’m happy at that👍 My worry is the cars depreciation will be worse with the demand & popularity of fully electric cars🤔
Looks like we went down a similar route with carwow, after discounts, adding on my minus equity from my previous car it came to NET PRICE of £22,642.30, so similar figure although you've got a lot more options (pano & audio)! I enquired around the 3 month free and they said that I wouldn't benefit and would turn out more expensive, I still asked them to run the figure but it came back slightly more expensive overall monthly.

Anyway, just clocked your location, so look forward to driving past you real soon ;)!
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