End of PCP and GMFV
- Thread starter MarkW
- Start date
Copied from BMW uk website about their pcp -
How it works
Simply choose a BMW you like and we’ll arrange a finance plan that suits you, taking into consideration
the contract length (typically between 24 and 48 months), an estimation of your annual mileage and your deposit
contribution. Whether you have a monthly payment or particular deposit in mind, we can tailor a repayment
plan to suit your budget and lifestyle.
The importance of the GMFV is that it lets you keep your options open at the end of your agreement.
Your decision will be based on the future value of the car, which is why it’s important to accurately estimate your
mileage. Depending on what the actual market value is when you come to change your car next time, you have
the flexibility to select from one of the following options:
Pay the optional final payment and own your BMW*
Part-exchange your BMW and choose another vehicle**
Hand the car back***
In both the first two options, if the value of your car is more than what we predicted for you in the GMFV, you
get the benefit.
If the GMFV does not meet the market value, you are protected by the guarantee in the third option, do not
have to pay the final payment, and can hand the car back to us. However, your decision will need to factor in
any additional charges relating to excess mileage and the condition of your car, which will influence the final
market value.
How it works
Simply choose a BMW you like and we’ll arrange a finance plan that suits you, taking into consideration
the contract length (typically between 24 and 48 months), an estimation of your annual mileage and your deposit
contribution. Whether you have a monthly payment or particular deposit in mind, we can tailor a repayment
plan to suit your budget and lifestyle.
The importance of the GMFV is that it lets you keep your options open at the end of your agreement.
Your decision will be based on the future value of the car, which is why it’s important to accurately estimate your
mileage. Depending on what the actual market value is when you come to change your car next time, you have
the flexibility to select from one of the following options:
Pay the optional final payment and own your BMW*
Part-exchange your BMW and choose another vehicle**
Hand the car back***
In both the first two options, if the value of your car is more than what we predicted for you in the GMFV, you
get the benefit.
If the GMFV does not meet the market value, you are protected by the guarantee in the third option, do not
have to pay the final payment, and can hand the car back to us. However, your decision will need to factor in
any additional charges relating to excess mileage and the condition of your car, which will influence the final
market value.
MACK said:
I think you are spot on there with your comments.
We only put a smallish deposit down, about £1200 I think. The only advantage of PCP over leasing I can see is that they sell you the benefit of having positive equity at the end towards your deposit for the next one. If this is not the case and GMFVs are set too high, then you may as well go for some of the crazy lease deals that are about. At least you know up front you are putting down say a 6 month deposit followed by 24/36 payments and will need to do the same again at the end.
Surely they just walk away - The Guaranteed future value is just that - If the car isn't worth the GMFV you hand back the keys and it's their problem - unless I'm missing something - which is entirely possibletechathy said:
Sorry - You've already answered this above
Your rightJasey said:Surely they just walk away - The Guaranteed future value is just that - If the car isn't worth the GMFV you hand back the keys and it's their problem - unless I'm missing something - which is entirely possibletechathy said:
Sorry - You've already answered this above
Z4M-2006 said:
They have upped their offer to £12750, basically the GMFV - so still the same as just walking away and starting again.
Not Sytners, though that's who we bought it from originally.
They are offering great deals on the M135i though, so I guess they need to recoup their margin somewhere:
The M135i deal is as follows:
M135i 5 door. Manual, alpine white, standard car.
£26400 OTR
Deposit £1000 then 47 X £299
If we could sell the Z4 and make £1.5-2k we could get into a new M135i with a few extras for no additional upfront cost.
metal licker, People on this forum are by the nature of the beast going to be fairly clued up on this sort of thing & also have access to a pool of people detached from the situation with their heads screwed on properly. However, it’s a different situation when you’re miss head-in-the-clouds & have been used to paying your £225/pcm for 3 years then suddenly you’ve found that there’s a £1800 shortfall of trade-in to balloon payment a month or so before PCP contract comes to an end.
In the case of my contract handing the car back came under voluntary termination. Given the structure of the contract it’s not obvious you can enter VT at any point up to 2 working days before the final balloon payment is due once payment threshold for VT had been reached. With that contract in a fair bit of stress, as you’ve just found out you’re apparently in a fair bit of debt, it’d be easy to make a bad decision if you weren’t given the right advice.
In the case of my contract handing the car back came under voluntary termination. Given the structure of the contract it’s not obvious you can enter VT at any point up to 2 working days before the final balloon payment is due once payment threshold for VT had been reached. With that contract in a fair bit of stress, as you’ve just found out you’re apparently in a fair bit of debt, it’d be easy to make a bad decision if you weren’t given the right advice.
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.TonyP said:
Jasey said:
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.
MACK said:
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.
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!
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!
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!
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!
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.
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.