End of PCP and GMFV

[MarkW]

Has anyone come out of a 3 or 4 year PCP on an E89 Z4 and had any positive equity at all?

We are coming to the end of a 4 year PCP in April on an SDrive20i MSport with a final payment of £12747.

Today we have been offered a value of £11000 from a dealer for April, which is significantly less than above, so even if we get a better offer I can't see us getting to positive equity.

I was expecting to have some equity after 4 years and would have considered another PCP if this was the case. It now looks like the only options now are to walk away, or to buy the car and keep it.

It is on an 8k miles pa PCP, and has only done 16k in nearly 4 years so was hoping the low mileage would have helped. WBAC are quoting £14400 at present, but don't know what their price would be in April. We could try to sell privately but it would be a risk ordering a new car on this basis if it doesn't sell.

I guess this is just a rant really, as there is not a lot we can do about it, but it doesn't seem the best for BMW either as we won't be going back for another PCP.

[jimmybell]

Can you sell privately? I'm not sure what it's worth but i'd assume more than their offer. Surprising they dont want to give you some cash to encourage towards a PCP renewal on a new model tbh.

[TR4man]

Not too sure that it is yours to sell privately is it? Isn't the leasing company the owner? (Although never having had a PCP, I might be mistaken).

[jimmybell]

Correct, it's owned by the finance company, probably BMW Finance in this instance. You can pay the finance off with a loan and sell it though I think sometimes other manufacturers might take it off you (pay your balloon) in order to win business too.

[mr wilks]

Assuming its a 11/12 plate 1 owner 2.0 Msport with sub 20k miles coming to the market in April i would expect to sell privately between £12k / £15k , i guess the value of the deal reflects the cash youve paid along the way
BMW finance deals aren,t known for making customers money

[SO8]

You can trade it to any dealer not just BMW and they will settle the finance. You can sell to WBAC and they will do the same. I have been offered more by WBAC repeatedly than BMW dealers who basically said take it there - if it is in good condition you will get what they offer.

I may well do that with my 35iS when I sell as it should make it easier.

[metal licker]

Got about £500 equity on my 23i Sdrive when I decided to buy the 35i
That was 6 months before the settlement was due

[JustCruzin]

The 3 year PCP on my 63 plate ends on the 35is in about 7 months. I did place a £9000 deposit on this (ouch for me!) and have a GMFV of just over £16000..... (3 year old 35is have been on AT for £23-27k )

Was hoping to do an exchange to an M4, but this is looking bleak now. Looks like PCP is a loss from the start but I guess I could keep the 35is.

Hope it all pans out ok.

Cheers

JC

[MACK]

Have E89 residuals weakened considerably in the last 3-4 years? would explains the deals you can get on these new if demand is slipping.

[MarkW]

Thanks for all the comments. It seems prices for these have not held up well, but we did get a good deal at the time with about 9.5k off and 300 per month payments.

Deals on the 2.0 now are nowhere near as good with only about 7k off plus the list price has gone up over 2k and the APR is higher so for the same deposit we put down you are looking at over 400 per month now.

There are some good deals about on the M135i though and we are going to test drive one, but we would need to sell the car privately or to WBAC to get enough out of it for a deposit.

Otherwise we will keep it for a few more years as my wife still loves it, it is low miles and in good condition so no hardship really.

[jimmybell]

Recently tested an m135i - nice car! They're turning loads out at the moment, i had them knock down a 38k car to 31k, brand new LCI 5door.

Would be interested to hear if anyone has had any positive stories from PCP deals, like a reasonable equity at the end?

[techathy]

When I got my Z4 the ARP for HP & PCP was the same. So given the same trade in value for the car it was just under 10% cheaper going for HP over PCP. As I can easily afford the monthlies it's a no brainer. You have to remember that with PCP given the same invoice price for the car the lower the monthlies the more you pay for the car at the end of the finance period.

[MattHall91]

You can sell privately and pay the settlement figure and then you're free.

I have just done this with my fiancé's car. Made 500 quid.

You will definitely have equity with the low mileage and market prices privately.

[MACK]

I have always though that when it comes to Balloon Finance on a new car (or even used) you are best off treating the whole thing as a 2/3/4 lease and leave minimal deposit. If you want a new car every few years (in the same way as say a company car) its great, keeps the repayments low and depending on mileage, length of term etc your protected by the manufacturer warranty. if you keep the deposit low upon renewal your not worried about not having a trade in this time or much if any equity in the existing PCP vehicle and you start the whole process again.
If you get attached to cars or just like to keep cars for longer then tradition hire purchase/bank loans etc are probably more suitable.

The car industry is currently facing something of a perfect storm of its own creation.
CAP/HPI have been warning the trade for a while now of downward pressure on residuals because of the shear number of used cars hitting and about to hit the market coming off company lease and PCP's etc.
All these record new car sales have to go somewhere secondhand and I think next time around for most folks going to replace a PCP with another PCP the new PCP vehicle residual (guaranteed future value) wont be anything like as strong. This coupled to the fact that a lot of folks out there used a p/x vehicles as a deposit worth thousands last time around and wont have this or any equity in their current PCP will mean an equivalent car on a PCP that cost you say £250-300p/m last time out might be a £500 next time.

Doesn't bode well for future new car sales, with a lot of folks flipping back to used or even keeping hold of their existing PCP vehicle long term

[techathy]

I know of 2 people who've ended up taking out a lone to pay off their PCP balloon payment as they were in negative equity due to massively over-optimistic GMFV (75% of new value after 3 years... really?!)