End of PCP and GMFV

[Jasey]

Another little known option on PCP deals is that once you are half way through (paid half the cost) you can hand the car back and stop the payments.

So if you got yourself a heavily depreciating turd you can cut your losses once you paid back half of it !

[techathy]

So what's the point of a Guaranteed Future Value if it's err not guaranteed, I'm missing something here...

It defines the final payment & is nominally representative of an okay to marginal bad condition car after age & miles. However some manufactures finance departments have given GMFV valuations which stink of cooking the figures to get sales through the door. Being fair every GMFV figure I've seen on BMW finance has been reasonably pessimistic looking at exiting trade in values for okay condition cars.

[MACK]

voluntary termination. are you talking about the half and thirds rule?

[techathy]

I'm talking about the section of the contract which is titled "Voluntary Termination". It sets out the conditions under which you can hand the car back without further finance payments.

[MACK]

Another little known option on PCP deals is that once you are half way through (paid half the cost) you can hand the car back and stop the payments.

So if you got yourself a heavily depreciating turd you can cut your losses once you paid back half of it !

the halfs and thirds rule is what you referring. You have to be careful with this and PCP's as its half the total amount payable under the entire agreement including the balloon payment (gfv) and all interest. In reality, depending on deposit this is means your a good 3/4 of the way through your deal if not more before handing it back becomes an option.

[Angie4m]

Another little known option on PCP deals is that once you are half way through (paid half the cost) you can hand the car back and stop the payments.

So if you got yourself a heavily depreciating turd you can cut your losses once you paid back half of it !

the halfs and thirds rule is what you referring. You have to be careful with this and PCP's as its half the total amount payable under the entire agreement including the balloon payment (gfv) and all interest. In reality, depending on deposit this is means your a good 3/4 of the way through your deal if not more before handing it back becomes an option.

Correct Mack and I think people automatically think that halfway through they've paid half of what they own but fail to factor in they also have the 'balloon' to factor in.

Another issue with this situation re the OP is how do they know what the market will be like in April? Possible scaremongering to get you to swap now possibly?

Also BMW have unfortunately for a good few years been punting out cheap white 18i & 20i basic Z4s for a couple of hundred and month on 24/36/48 deals. Cheap way to get a good looking car but inevitably these will end up flooding the second hand market which in turn pushes the value down especially in those model variants.

If you seriously want to change now and are getting a better value elsewhere, sell it elsewhere and do a deal for no trade in.

[MarkW]

Hi folks
I am well aware of the benefits and pitfalls of PCPs but getting back to my original post my point really was trying to understand if those of you that have had a pcp on a z4 have come away with any equity or not, just trying to understand if this is common.

I've bought many cars over the years, some held their price better than others. We have never had a pcp before, but I know others who have positive equity towards the end.

I think I was just shocked to be told a low milage car would only be worth 11k when AUC retail around £18k and the lowest I have seen is £16k.

I agree we don't know what prices will be like in April, but I would have thought it a better time to see a convertible with summer approaching. If wbac offer 14400 now I can't see that dropping to under 13000 in two months.

We can and may go down the private sale route, but with a new car it is a timing issue so my wife is not without a car.

I can always lend her my car and use my tvr for a short time, but it's not an ideal commuting car unless the weather gets a lot better!

[MACK]

Perhaps the best thing you can do is get yourself some proper valuations from CAP/Glasses. From experience most of the trade tend to use CAP values and they tend to be lower than Glasses. It should give you some clarity on were the trade prices are actually at. I suspect the WBAC is nearer to true trade value and the dealer value is..........well.............an attempt to separate you from your pants!

The projected residual value of a model year 2016 version of your car with a PID Value of £34,700 in 4 years with 40k on the clock is a shade over £10,000. (source Fleet News)
Its not an exact science but surely yours is worth more than whats been offered by the dealer with only 16k on the clock

Plus there are two E89 23i S Drive on with BCA at the moment, different engine/model I know. However that said I would have though yours being a newer car with the newer engine/m sport trim would be more desirable. The 23i are CAP Clean on a 10 plate with 55k £9,500 and 61 plate 13k £13,250.

As a general rule with CAP/Glasses converitible prices stablise after christmas and actual start to increase around February as dealers get ready for the mythical summers we never have. So I would be too worried about your car being worth less in a few months, its probably going to be worth slightly more! Hope this helps!

[MarkW]

Well there is an update and a happy ending to this story.

A local-ish dealer has done us a good deal on a M135i and will take the Z4 in exchange, so no deposit required and monthly payments only slightly higher.

We have a White with Black Leather 3 door M135i, Auto, Comfort Pack, Heated Seats, Sun Protection Glass and Black M Performance Grills arriving next month.

Total discount was over £9k. The other half is happy, but still loves her Z4 and will be sad to see it go.