Jump to content
Jay Beach

Depreciation in 12 months.

Recommended Posts

22 hours ago, Taxboy said:

Having looked at this again. That's painful. I did a quick search for a 2 year lease on a 520d MSport which is £457 per month Inc VAT on 2 years at 12,500 miles with an initial rental of 1 month. It won't be quite as well specced as yours.

BTW should the list price have been £41k rather than £51k

Sent from my moto g(7) plus using Tapatalk
 

 

Funny that figure, it’s exactly what I’m paying on mine, and list price was £47k and I’ve had it since new. So picking one up now would save me 2 cans of Coca Cola a month. Bargain that. 

 

Plus mine - as a trade is, is worth seemingly more as well. And I get a £13k discount on a new X5.

 

if you finance a car and looking at something which is 3/4 years old, I guarantee that buying new will be far more competitive. People just assume other wise because the sticker price is double. 

Share this post


Link to post
Share on other sites
On 18/09/2019 at 12:49, Taxboy said:

No but a pre owned car depreciates at a lower rate than a new one. Taking the OP, his car was listed at £51k he secured an £18k discount and yet it still lost £11k. Assuming the dealer who has offered £22k sells it to the next buyer for £25k it's unlikely it will lose £11k in the next year

 

Sent from my SM-T800 using Tapatalk

 

 

 

 

Sorry for multiple reposts - on my phone...

 

how does a used car depreciate slower?

 

Mine cost £47k rotr. Finance was £38k, £0 in from me. Car is now being traded in at £26200 so a loss in value of £11800. You don’t count from list price as that’s not what it cost. 

 

On top of that, I have made 26 monthly payments of £459 that’s £11934. As far as I’m concerned the car only owes me £134 over 26 months and 26k miles. 

 

Now as as an example I’ve just looked at a comparable 520d approved used by BMW a 520d xDrive from September 2017 at Dick Lovett in Bristol, on sale for £27k.

 

A £0 deposit purchase would make that car £21 a month more than mine. If I bought cash, and kept for 30 months (shortest I can calculate) according to BMW car would be worth £16485. That’s a loss of £10.5k. 

 

Yes you’re £1300 quids in but, imagine the out warranty repair costs and factor in that and GFV is a best case scenario and the loss curve becomes so slight, it doesn’t make any sense to cash purchase a used premium car. 

 

Just my perception of it but of course, everyone buys in most suitable way for them. If dealers were not certain that people would over pay for the car I hand back after x amount of months, I would get a deal that suits me in the first place.

Share this post


Link to post
Share on other sites

I totally agree that everyone has their own requirements. It has cost you £460 a month to run a new car for 2 years. As you are now trading again it will continue to cost £460 assuming depn remains constant.

Taking your example of the 2017 model. If you bought for cash & it loses the same. In 2021 it's worth £16k. It won't continue to depreciate at the same rate if you keep it so the monthly cost of depn goes down.

My comment was based on car depreciation is not normally on a straight line basis so if you want to beat depreciation buying used and keeping is the way to go. If you are a frequent changer then leasing may well be the better bet.

Sent from my moto g(7) plus using Tapatalk

Share this post


Link to post
Share on other sites
4 hours ago, sjak92 said:

Mine cost £47k rotr. Finance was £38k, £0 in from me. Car is now being traded in at £26200 so a loss in value of £11800. You don’t count from list price as that’s not what it cost. 

 

On top of that, I have made 26 monthly payments of £459 that’s £11934. As far as I’m concerned the car only owes me £134 over 26 months and 26k miles. 

 

I think that what you're saying is that over the period you have paid only £134 more than if you'd bought outright. You can nett off against this any interest etc. of course but it's a short-term calculation. If you don't trade your costs will continue in a straight line but the car's depreciation will slow roughly exponentially so for anyone planning to keep a car for 3 or more years the figures, based on the above,  favour buying outright (again netting off interest etc.). 

 

Edited by Boba

Share this post


Link to post
Share on other sites
 
I think that what you're saying is that over the period you have paid only £134 more than if you'd bought outright. You can nett off against this any interest etc. of course but it's a short-term calculation. If you don't trade your costs will continue in a straight line but the car's depreciation will slow roughly exponentially so for anyone planning to keep a car for 3 or more years the figures, based on the above,  favour buying outright (again netting off interest etc.). 
 
Spot on

Sent from my SM-T800 using Tapatalk

Share this post


Link to post
Share on other sites

Buying a new car with cash is a bad use of money . If you hand over £38k for a new car and sell for £26k, 2 years later thats a huge amount of money locked away doing nothing.   More importantly it means you would have to sell other investments to generate the original lump sum

Do businesses buy machinery with cash . Nope .

 

With new cars the PCP interest rate was 2.9%.  For a 2017 Approved Used Car their representative interest rate is 12.4% !!!! . In that case it might be better to plonk down the cash .  IMO the representative deal offered for 520d is really bad - its the interest rates plus the profit margins together.  Plus its not a PCP contract, its hire purchase and you are locked in for 4 years !!!. Please dont do it
 

If I was buying a used 2-3 year old BMW I would go outside the dealer network and get it serviced by an independent BMW garage. Check some of the deals on Autotrader - they are big car store type places. Same prices but 6-12 months newer - ie, 68 plate instead of 2017 . 2 year warranty as opposed to 1 year

  

 

Share this post


Link to post
Share on other sites
51 minutes ago, Carrera77 said:

Buying a new car with cash is a bad use of money . If you hand over £38k for a new car and sell for £26k, 2 years later thats a huge amount of money locked away doing nothing.   More importantly it means you would have to sell other investments to generate the original lump sum

Do businesses buy machinery with cash . Nope .

 

With new cars the PCP interest rate was 2.9%.  For a 2017 Approved Used Car their representative interest rate is 12.4% !!!! . In that case it might be better to plonk down the cash .  IMO the representative deal offered for 520d is really bad - its the interest rates plus the profit margins together.  Plus its not a PCP contract, its hire purchase and you are locked in for 4 years !!!. Please dont do it
 

If I was buying a used 2-3 year old BMW I would go outside the dealer network and get it serviced by an independent BMW garage. Check some of the deals on Autotrader - they are big car store type places. Same prices but 6-12 months newer - ie, 68 plate instead of 2017 . 2 year warranty as opposed to 1 year

  

 

Well there’re a few points there and there’s a thread somewhere on the same subject but my own view..........

 

Businesses certainly do buy capital assets for cash (you obviously never worked for GEC  ^_^ ), but so many businesses run on an overdraft it’s a bit moot.

 

PCP makes sense if and only if you want a new car for a short (under 3 years) time. Any longer and you’re paying through the nose while the car value plummets. There’s a sweet spot (see @sjak92 above).

 

Paying cash versus financing (new or old) to buy is very dependent on personal circumstances, but it’s easy to work out which is best for you. Many (maybe most) investments don’t match even today’s cheap loans if you’re eligible. Older folk (me ^_^ ) tend to move into cash or low-interest securities.

 

i do agree that there is sharper pricing outside the dealers of course though even a 1 year AUC warranty is worth a fair bit. Where you service things and what do do about warranties  is a whole other subject though.

 

Edited by Boba

Share this post


Link to post
Share on other sites

Interesting reading this thread.

 

16 hours ago, sjak92 said:

 

Mine cost £47k rotr. Finance was £38k, £0 in from me.

 

 

If it was £47k rotr, but the finance was £38k with nothing down from you, where is the £9k difference from?  Did they just drop it by £9k due to the fact you were taking it out on finance and you must return it within 3 years?  Excuse what might be an silly question but I've never bought new and never used finance.  

 

As someone who has always bought outright and never had a finance deal in their puff I'm curious to understand how much it would really cost to buy a G30 new or the next 5er before the Government ban all decent cars for ever.  I've always planned on keeping a car for minimum of 4 years, I had my second E60 for 8 years and I've no plans to chop in the F10 yet and I've had that 3.5 years.

 

New v older with its increase running costs.  Hmm yes plenty to do sums with.

 

Thanks all.

Share this post


Link to post
Share on other sites
1 hour ago, 535i Andrew said:

Interesting reading this thread.

 

 

If it was £47k rotr, but the finance was £38k with nothing down from you, where is the £9k difference from?  Did they just drop it by £9k due to the fact you were taking it out on finance and you must return it within 3 years?  

 

Right so my deal was as follows:

 

£47k rotr

£9k discount and carry over from previous car (that was also £0 in when I purchased in April 2016)

Leaves me with finance of £459 x 48 months

 

That would be the true cost of owning the car over 4 years. It comes to £22032. I then have a balloon payment which if I recall is around £17k which works out about right taking interest into account. Obviously at that point I'd have three options. 

 

A) Pay balloon and keep car (pointless for me as I have much better ways of spending £17k)

B ) Hand the car back and walk away (there is a debate about excess millage and paying for this although I maintain that law does not require you to do so and as long as you dont go on a 8k per annum agreement and hand the car back with 100k excess miles, BMW finance wont care)

C) Trade in and go again

 

I'm effectively doing C. I am mid way through my 48 month agreement. BMW buys the car back off of me for £26200 ( i have around 8K excess miles at this point) as per my previous post, I am only £134 over what i would have paid if gone by cash, however, the excess miles should cost me around £872 so ive pulled it back already. 

 

Now new car, is a X5 30d M Sport with Tech Pack, M Sport Plus, Pano Roof and adaptive lights. Rort is £67k. Discount brings me down to £54k!!! Again, nothing in from me and the finance is on 2.9% APR. That low a rate of finance makes it easily justifiable to borrow against the car rather pay up front for it. 

 

Yes monthly payment will be significantly more on this, however, the payments mean that I will be in positive equity at the end and should be OK throughout the term too, 

Share this post


Link to post
Share on other sites
On 20/09/2019 at 11:08, sjak92 said:

 

Right so my deal was as follows:

 

£47k rotr

£9k discount and carry over from previous car (that was also £0 in when I purchased in April 2016)

Leaves me with finance of £459 x 48 months

 

That would be the true cost of owning the car over 4 years. It comes to £22032. I then have a balloon payment which if I recall is around £17k which works out about right taking interest into account. Obviously at that point I'd have three options. 

 

A) Pay balloon and keep car (pointless for me as I have much better ways of spending £17k)

B ) Hand the car back and walk away (there is a debate about excess millage and paying for this although I maintain that law does not require you to do so and as long as you dont go on a 8k per annum agreement and hand the car back with 100k excess miles, BMW finance wont care)

C) Trade in and go again

 

I'm effectively doing C. I am mid way through my 48 month agreement. BMW buys the car back off of me for £26200 ( i have around 8K excess miles at this point) as per my previous post, I am only £134 over what i would have paid if gone by cash, however, the excess miles should cost me around £872 so ive pulled it back already. 

 

Now new car, is a X5 30d M Sport with Tech Pack, M Sport Plus, Pano Roof and adaptive lights. Rort is £67k. Discount brings me down to £54k!!! Again, nothing in from me and the finance is on 2.9% APR. That low a rate of finance makes it easily justifiable to borrow against the car rather pay up front for it. 

 

Yes monthly payment will be significantly more on this, however, the payments mean that I will be in positive equity at the end and should be OK throughout the term too, 

This is pretty much what I did, with almost exactly the same cars! Am I really sjak92 and I don't realise it?! :-)

 

If you're looking at the true cost of ownership, I think another (small) factor in this is what happens in the time of ownership. While I had the G30 I only did one service - no tyres, no MOT, etc. If I'd held on till 4 years rather 2.5, I'd be adding on (guessing) another 2k at least.

 

While I think there are lots of wrong answers, I don't think there is one right answer. It depends on your circumstance, current interest rates, etc Key is understanding what you intend to do and what that means for the various options. Says The Ministry for Stating The Obvious :-)

Share this post


Link to post
Share on other sites
14 minutes ago, G Whizz said:

This is pretty much what I did, with almost exactly the same cars! Am I really sjak92 and I don't realise it?! :-)

 

If you're looking at the true cost of ownership, I think another (small) factor in this is what happens in the time of ownership. While I had the G30 I only did one service - no tyres, no MOT, etc. If I'd held on till 4 years rather 2.5, I'd be adding on (guessing) another 2k at least.

 

While I think there are lots of wrong answers, I don't think there is one right answer. It depends on your circumstance, current interest rates, etc Key is understanding what you intend to do and what that means for the various options. Says The Ministry for Stating The Obvious :-)

 

you're not me, you beat me to it, I had to put on part worn tyres onto the G30 before handing back (not my proudest moment) but fuck no was I going to loose almost £800 in trade in because tyres were under 3mm. Fair bit of time scouring ebay and £180 later including fitting the car was siting on the exact same tyres but with 6mm up front and 5.5mm at the back. Not a bad bit of business. 

 

Mind you, I was shocked when they put the car up for sale for £24,500. Meaning the dealership really wanted my clientele because they sold at a loss and were counting on a finance sell for the BMW FS incentive to break even.

Share this post


Link to post
Share on other sites

This is why, when I was looking for the car I subsequently bought, that I seriously considered Porsche. Of all the 'good' German brands, they hold their price better. The reason I didn't go down that route was down to the high level of tech on a BMW and relatively low level for Porsche.

Share this post


Link to post
Share on other sites
47 minutes ago, Hal9000 said:

This is why, when I was looking for the car I subsequently bought, that I seriously considered Porsche. Of all the 'good' German brands, they hold their price better. The reason I didn't go down that route was down to the high level of tech on a BMW and relatively low level for Porsche.

Are you still subject to the Porsche tax on servicing and parts compared to BMW ?

Share this post


Link to post
Share on other sites
Just now, Taxboy said:

Are you still subject to the Porsche tax on servicing and parts compared to BMW ?

Yikes! No idea! I didn't get further than looking on the Porsche approved website. So, I never spoke to a Porsche salesman

Share this post


Link to post
Share on other sites
1 hour ago, Hal9000 said:

Yikes! No idea! I didn't get further than looking on the Porsche approved website. So, I never spoke to a Porsche salesman

I wouldn’t bother. Modern Porsche’s hold their value for the dealership and no one else. £12k margin on trade-in on a car that will retail for c.£45k? Yes sir, that’s the porsche price promise!

 

And yes, porsche service/parts prices make BMW look cheap!

Edited by Zerouali

Share this post


Link to post
Share on other sites
1 hour ago, Zerouali said:

I wouldn’t bother. Modern Porsche’s hold their value for the dealership and no one else. £12k margin on trade-in on a car that will retail for c.£45k? Yes sir, that’s the porsche price promise!

 

And yes, porsche service/parts prices make BMW look cheap!


Plus EVERYTHING is an option, would you like a Macan with an electrically adjustable heated drivers seat and the passenger gets a manual non heated seat? No problem!

Share this post


Link to post
Share on other sites
On ‎01‎/‎10‎/‎2019 at 10:28, G Whizz said:

While I think there are lots of wrong answers, I don't think there is one right answer. It depends on your circumstance, current interest rates, etc Key is understanding what you intend to do and what that means for the various options.

 

+1 on that.

 

But there are some very wrong ways to do it.

 

https://www.pistonheads.com/gassing/topic.asp?h=0&f=23&t=1126922

 

 

Share this post


Link to post
Share on other sites
3 minutes ago, 535i Andrew said:

Holy cow!

Unless he was getting really, really good discounts, it's a "good news! story that makes the buyer look stupid, and the dealer pretty darn tight! I wonder what commission that he was responsible for over that period...?!

Share this post


Link to post
Share on other sites
52 minutes ago, 535i Andrew said:

 

+1 on that.

 

But there are some very wrong ways to do it.

 

https://www.pistonheads.com/gassing/topic.asp?h=0&f=23&t=1126922

 

 

 

The sad thing is Peugeots used to be good producing the best fwd mass produced cars in the 1980's - shame this turkey bought all his in the last 20 years when most were lemmings! 

 

TBF Peugeot are coming back with some great cars now such as the 3008. 

Share this post


Link to post
Share on other sites

Probably my favourite car in my back catalog would be my 205 1.9 GTi - that in the twisties was sublime!

 

Anything post 306 is pretty dire i think, the 208 we had in france was hateful!

Share this post


Link to post
Share on other sites
3 hours ago, 535i Andrew said:

 

+1 on that.

 

But there are some very wrong ways to do it.

 

https://www.pistonheads.com/gassing/topic.asp?h=0&f=23&t=1126922

 

 

 

What a shrewd negotiator he must have been. I bet he paid for the autoglym too... EVERY SINGLE TIME

Share this post


Link to post
Share on other sites

I am looking at a G31 June 17 plate just comes under the 40k so normal  tax,and it’s the colour and leather Combo I want plus its only done 19k miles. It’s costing me 11k to change they took my 14 plate touring in which had 40k on it. I had that two years lost about 2.5 grand a year so I can live with that

Share this post


Link to post
Share on other sites

just to reiterate my point a little here. My old car is now on BMW's approved used and up for sale at a bargain of £24,500 with Sytner in Harold Wood.

 

on the same agreement terms as I had (48 months, £0 in) the car comes to £449 a months i.e £10 less on a monthly than what it cost brand new. The difference is that it will only have 12 months warranty left and at the end of the term it will be a 6 and a half year old vehicle compared to 4 years old what mine would have been had I kept it. 

Share this post


Link to post
Share on other sites

Interesting discussion about the pcp costs and had to read it a couple of times. I think the gist is you need to change fairly frequently and be happy paying 450-500 per month continually for the pleasure of driving a new car - but never actualy owning anything until you decide to jump off and pay the final payment. Is that about it?

 

I'm only on my 2nd car in 10 years so not for me. I did drop 19k on my current car at 3.5yrs old (f10) and its now worth about 10k (wbac, offered 9.5k trade in) so that is about 9k over 4 years excl maintainance costs. It's only got 65k on it now, done 30k.

 

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×