PCP and EV's don't go well together

Villain

I've mentioned this a few times in a few threads here and some have argued against it but today I sadly got the news that confirms it: PCP and EV's don't go well together.

I bought a 142 Leaf SVE as new on PCP with 20,000km per year allowed and after 2 years into that deal I asked my Nissan dealer to look at replacing it early next year and I am only doing 15,000km a year!

Well the figures are in and guess how much of my 4,500 deposit is going to be there in equity? ZERO! F*CKING ZERO!

Yes you read that right, no equity at all and when I asked if there would be any if I waited for 172 when the agreement is completed they said NO!

Basically with 30kw Leaf on sale, no-one wants a 24kw so the re-sale value is ****e and there is no equity.

This is the problem with adopting a technology during the early life cycle of that technology, I have grown to realise that but some like Mad Lad here are in denial about it.

If you are thinking of buying an EV on PCP, don't do it! In fact if you are thinking about buying a new EV on any finance, make sure you can afford to keep it as the resale will be ****e.

corglass

Very informative. Can you sell the car privately?

Villain

Villain wrote: »

I've mentioned this a few times in a few threads here and some have argued against it but today I sadly got the news that confirms it: PCP and EV's don't go well together.

I bought a 142 Leaf SVE as new on PCP with 20,000km per year allowed and after 2 years into that deal I asked my Nissan dealer to look at replacing it early next year and I am only doing 15,000km a year!

Well the figures are in and guess how much of my 4,500 deposit is going to be there in equity? ZERO! F*CKING ZERO!

Yes you read that right, no equity at all and when I asked if there would be any if I waited for 172 when the agreement is completed they said NO!

Basically with 30kw Leaf on sale, no-one wants a 24kw so the re-sale value is ****e and there is no equity.

This is the problem with adopting a technology during the early life cycle of that technology, I have grown to realise that but some like Mad Lad here are in denial about it.

If you are thinking of buying an EV on PCP, don't do it! In fact if you are thinking about buying a new EV on any finance, make sure you can afford to keep it as the resale will be ****e.

I don't see what the problem is? Its you who clearly didn't research PCP properly. This isn't a situation that only affects hybrid cars.

Villain

Willow Rich Hobo wrote: »

I don't see what the problem is? Its you who clearly didn't research PCP properly. This isn't a situation that only affects hybrid cars.

A leaf is not a hybrid and I did research it and I know others who have done PCP on diesel and Petrol and have had equity at the end.

Yourmama

I don't know much about pcp but isn't it that the car has guaranteed value after the 3 years?

Villain

Yourmama wrote: »

I don't know much about pcp but isn't it that the car has guaranteed value after the 3 years?

Yes and the plan would be that the resale value is higher than that value and you have some equity to use as deposit on the next car.

colm_mcm

So how much are they saying the GMFV is?

Is the list price lower now than what you paid, I know they were discounting them heavily in the last year. That won't have helped.

Villain

The GMFV is around 11k I need to check exact figure, the list price is a little lower but not more than €1500

colm_mcm

How does €11k compare to what you can buy one used for?
Weren't they selling them new straight for €22k at some point in the last year?

jca

I think we'll be seeing a lot more threads like this in 2019 and not just with EV'S either. The deprecation on those leafs is savage. A guy in work had the new 30kw for a week, he loved it but it's 31k. There was a 142 for sale outside with a 15,500 price tag on the window (his figures not mine) That's a lorra lorra money lost in a 2 years.

Villain

This is a SVE model which may be part of the issue but the dealer told me he can't give away 24kw models now!

A 132 asking price is around €12,000

KCross

I think you have misstated the issue slightly. It's not that PCP doesn't go with EV it's simply that depreciation on EV is terrible.

PCP is fine on EV (or any car) but you need to be willing to find the deposit each time.

PCP has probably "saved" you in some regard as you won't lose anymore, it has bottomed out at GMFV

Part of the issue with PCP is that it is sold as some brilliant new finance deal like you are getting a fabulous deal somehow... it's just a lease with a balloon payment at the end.

Buying a new EV is going to cost you big time. There are good 2nd hand deals where 50% of the new price is already gone... that's where the value really is.

Villain

Well I believe the issue is far worse on EV and the Nissan Finance guy said the same.

It's not difficult to understand really, the technology is evolving quicker than the life cycle of a finance agreement.

In 2019 60kw Tesla Model 3 will be about and who will want a 30kw car?

Diesel and Petrol technology is not evolving in any way like Electric is.

maximum12

This scenario was predicted by many and should be a warning to anyone considering buying one now. It'll be a minimum of 10 years before I consider buying an EV as the technology might be reaching maturity by that stage.

KCross

Pretty much every new car will depreciate 50% in 3yrs(give or take a few %)

You probably bought the SVE for around €28k so the most it was going to be worth is €14k at the end of a 3yr PCP

You've lost the difference between GMFV and €14k so about €3k. Think about what you've saved in fuel in the 3yrs and use that to think positively!

You will still have to dig deep for the next deposit if you want new again but you won't have the problem of a car you can't sell. Just hand it back and go again or else pay the GMFV and drive it into the ground.

unkel

colm_mcm wrote: »

Weren't they selling them new straight for €22k at some point in the last year?

€20k

On the road price with the bigger 6.6kW internal charger (metallic paint extra)

€31k for a Leaf is ludicrous. If you're going to pay that, you need your head examined.

pwurple

Yup, not unexpected. All there in the contract, which I read when it was being offered to me. Didn't sound like a good deal to me then, and still doesn't. We bought the car outright (well, after trading in a worthless 12 year old banger for the 4k 'scrappage' and taking the 5k govt grant).

We got the Leaf with the explicit intention to drive it into the ground, ie... give it to our children in ten years time, rather than trade it in. I think it will be a great future car for a teenager. Not too much range so they can't get in massive trouble. Won't have any street cred whatsoever, so they won't be crusin'. Won't cost me an arm and a leg to tax / fuel. (insurance is another matter!)

KCross

pwurple wrote: »

We got the Leaf with the explicit intention to drive it into the ground, ie... give it to our children in ten years time, rather than trade it in. I think it will be a great future car for a teenager. Not too much range so they can't get in massive trouble. Won't have any street cred whatsoever, so they won't be crusin'. Won't cost me an arm and a leg to tax / fuel. (insurance is another matter!)

I like it! Everyone has their own ideas, circumstances and opinions.

I feel slightly sorry for your kids though!

mickdw

It's not really an issue with pcp although it is a sh1t situation.
If you had bought the car on traditional finance with similar monthly, you would be in a similar situation - owing as much or more than the car is worth.

bk

I'm not all surprised, I've seen this happen time and time again with new technology, desktop pc market, laptops, smart phones, etc.

With each new generation there are massive leaps in technology, which brings great new things. But the unsaid down side is that the second hand value drops like a stone, as the gap between generations is so large.

That can be ok if you are talking about a €600 smart phone, but a 30k car, eckk!

Eventually these markets mature, innovation still happens, but the tech reaches a good enough point where people feel happy to keep it for many years and not feeling pressure to upgrade frequently. It is not unusual for me to see people with almost 10 year old laptops and still happy with them! That was unimaginable 15 years ago when the laptop market had been evolving so quickly.

The EV market is currently in the same early adopter, highly evolving stage where the price of second hand models will drop like a stone.

On the up side, fantastic deals available for people looking for a good quality 2nd family car for running around the city.

Lantus

That's unfortunate re the leaf and equity. I was thinking of getting one. This is a technology issue. I have a car on pcp and would be concerned re equity. It's a huge issue for Nissan as nearly all new cars are pcp financed. Unless they are going to be very equitable with the truth or buyer is naive it's a sales issue.

n97 mini

Our 152 Tekna landed at just under 14.5k but I'm still expecting it to depreciate like no other car we've ever had. In contrast we sold a 6 year old Prius that we bought at 3 y.o. for only slightly less than we paid.

Unlike the Prius (which didn't come anywhere close to the stated economy) I expect the very low running costs of the Leaf to offset the depreciation to an extent, and I think this is where it's a real winner. It's also a lovely car and very nice to be in or drive.

24kw Leafs will be a steal in time, and hopefully our daughter, a student who wants her own car, might actually start with a Leaf rather than a ****ty Micra.

Bigus

Villain wrote: »

Yes and the plan would be that the resale value is higher than that value and you have some equity to use as deposit on the next car.

But on the plus side does the PCP and guaranteed future value not insulate YOU from total price collapse ? And leave the Nissan dealer and the banks with the problem of high depreciation.

If Nissan have their heads screwed on they should release a 35 kw Retrofit subsidised battery for earlier Leaf models to be made available to coincide with the Leaf II launch and lift the whole E - brand, by raising secondhand demand and values.

This is where Tesla have been clever with free upgrades, they are overcoming a lot of potential tech obsolescence issues and protecting the Brand and by extension, ( no pun intended) the viability of electric cars.

From experience I remember the Prius' had the same heavy depreciation issues early on , however eventually as the market copped on to the benefits of the product, Prius resale values hardened very significantly for both gen 2 and gen 3, but this didn't happen until about 2013 in both U.K. And Ireland , IE ;10 Years after Gen 2 launch.

peposhi

The only reason I went for PCP was that I wanted to go for an EV but did not know / understand the technology nor had experience. At the end of the term I was to make my mind which way to go.
The way I look at it now - the current EV will become our run-around car and we will be going for a long range EV, most likely new again or a nearly new. After that I see no reason why to change cars, given the little maintenance needed and troubles an EV gives (so far).

For me PCP is a worry only if you plan to change your car every so often.
If the car is doing a good job, it is a good way to spread the cost ex. if I am to refinance the GMFV to pay the dealer it would be only €150 a month (I know that in the long run it would cost me more due to interest paid, but I am OK with that).

Fastpud

Saw a 141 Vista on Autotrader for £8950 stg - with Sterling dropping like a stone that is going to kill the second market for Leafs here.

http://www.autotrader.co.uk/classified/advert/201610148778281?make=nissan&model=leaf&logcode=p

My balloon payment is €9500 so at the moment it is working out just OK for me, but in 2 years with Tesla & Nissan having new models I don't expect to do well at all. That being said, I was planning on keeping this car and maybe getting another new EV so may not be too bad.

isnottheword

Fastpud wrote: »

Saw a 141 Vista on Autotrader for £8950 stg - with Sterling dropping like a stone that is going to kill the second market for Leafs here.

I paid €9200 for a 141 Leaf Acenta (and a June reg'ed 141 at that) - sourced in the UK (and that was before most of the drop in sterling).

grogi

Villain wrote: »

I've mentioned this a few times in a few threads here and some have argued against it but today I sadly got the news that confirms it: PCP and EV's don't go well together.

That soon will be the reality for more buyers... With sterling so cheap at the moment and a sea of cars exiting PCP, all residuals will look bleak...

Villain wrote: »

If you are thinking of buying an EV on PCP, don't do it! In fact if you are thinking about buying a new EV on any finance, make sure you can afford to keep it as the resale will be ****e.

That is applicable to all purchases. One should not assume renewing the PCP will be a viable option at all...

maximum12

grogi wrote: »

That is applicable to all purchases. One should not assume renewing the PCP will be a viable option at all...

Yeah pcp could potentially become a victim of its own success. If lots of people are tempted to buy new, who'd normally have bought 2-3 year old cars, then that's going to have the knock on effect on residuals.

Villain

grogi wrote: »

That soon will be the reality for more buyers... With sterling so cheap at the moment and a sea of cars exiting PCP, all residuals will look bleak...



That is applicable to all purchases. One should not assume renewing the PCP will be a viable option at all...

It may well be an issue in general but with evolving technology in the EV space it will only be worse.

unkel

Even if you bought a new Leaf and it would be worth say only €5k after 3 years (probably worst case scenario and then some), you're depreciation is €5k per year (presuming you paid €20k, not €30k for your Leaf)

Add up all the other costs of motoring, and unless you do an extremely low mileage, it would still be cheaper / similar compared to any other basic family size car with an ICE...

KCross

Villain wrote: »

It may well be an issue in general but with evolving technology in the EV space it will only be worse.

So what are you planning on doing?
There is unlikely to be anything new or ground breaking available in 2017 in time for the end of your PCP... maybe there will be something to order for 2018.

Will you stick with EV or do you feel you have been burned and you'll go back to ICE until things settle down in a few years? That still leaves you with a decision... pay the GMFV or hand it back?

I suppose the other thing is, if the car is doing what you need of it today then it will continue to do so. Just keep driving it.

Where is your mind at with it?

isnottheword

unkel wrote: »

Add up all the other costs of motoring, and unless you do an extremely low mileage, it would still be cheaper / similar compared to any other basic family size car with an ICE...

Don't buy new - buy a fresh 2nd hand that's had the major bulk of the depreciation wiped away already. Then it can make financial sense.

For those that are holding back waiting for the new generation, are all of you going to go out and buy new off the bat?....because I can't see a 60kW EV being cheap - the manufacturer will be onto a winner at that point, not to mention that they will have considerable costs to recover.

The move from 24 to 30kW in the Leaf is welcome - but it still doesn't fix the range issue as such. My intention is to hang on to my 24kW Leaf - until such time as a 2nd hand 60kW becomes affordable to me - and that's going to take a good few years.

DrPhilG

isnottheword wrote: »

Don't buy new - buy a fresh 2nd hand that's had the major bulk of the depreciation wiped away already. Then it can make financial sense.

My intention is to hang on to my 24kW Leaf - until such time as a 2nd hand 60kW becomes affordable to me

That's what I did and we have the same future plans exactly.

Bought a top spec Leaf in England, 1 year old and 5k miles on the clock.

It cost the equivalent of around €18k (damn you sterling rate) and has saved me over €2k a year compared to my old ICE.

My plan is to change in 2019. I'll have owned it 4 years, saved nearly €10k and that €10k added to my resale value will be my budget for the next EV.

Hopefully by then there will be a few options around for 200+ mile cars in the second hand market.

Brexit may piss on my plans a bit though as I would have most likely imported again.

isnottheword

DrPhilG wrote: »

Brexit may piss on my plans a bit though as I would have most likely imported again.

Yeah, that would appear to be the flaw in my plan also :-(

Water John

Is there any possibility that a second add on battery could be installed in the boot. They are only cells after all.
I'm sure some guys are looking that way.

Villain

unkel wrote: »

Even if you bought a new Leaf and it would be worth say only €5k after 3 years (probably worst case scenario and then some), you're depreciation is €5k per year (presuming you paid €20k, not €30k for your Leaf)

Add up all the other costs of motoring, and unless you do an extremely low mileage, it would still be cheaper / similar compared to any other basic family size car with an ICE...

I did 29,000 km in 2 years so saved about 2k on Fuel but that saving was meant to mean the monthly payments were easier on the finances instead it just ate any equity.

If I had bought an ICE I would be better off by about €1,500 after the years going by my figures but I wouldn't have had 3 years of range anxiety along with some cold journeys when you turn off heating so you can reach your destination.

Villain

KCross wrote: »

So what are you planning on doing?
There is unlikely to be anything new or ground breaking available in 2017 in time for the end of your PCP... maybe there will be something to order for 2018.

Will you stick with EV or do you feel you have been burned and you'll go back to ICE until things settle down in a few years? That still leaves you with a decision... pay the GMFV or hand it back?

I suppose the other thing is, if the car is doing what you need of it today then it will continue to do so. Just keep driving it.

Where is your mind at with it?

At present my thinking is keep until 172 when the plan is up, try save as much as possible until then and then go with a PHEV, possibly Hyundai IONIQ, or back to ICE.

September1

When I was replacing my 2011 LEAF it was Nissan dealer who gave me worst trade-in value and that was major reason why I went for diesel this time.

Surely the PCP has been the best way to buy a Leaf as it guards you against the horrible depreciation. The less lucky souls like myself, unless Nissan makes me an unbelievable trade in offer to compensate me for the depreciation, are just going to be stuck with the car for its lifetime. If at 5 years the trade in value is pennies I just won't change.

As John says, once the price of these cars falls down towards bangernomics money and the price of batteries per kWh goes down there very likely will be affordable third party/DIY mods to increase the capacity of 24 kWh later on. The way I see it: If the car drives like new and the warranty has ran out I would have no problems investing another 10k to my car to get it up to 2..3 times the capacity it had when new. Compared to trading it in for a new 40-60 kWh car 10k is still very affordable. Then just drive it for another 5-10 years with the new battery to get value from your investment.

Bigus

samih wrote: »

Surely the PCP has been the best way to buy a Leaf as it guards you against the horrible depreciation. The less lucky souls like myself, unless Nissan makes me an unbelievable trade in offer to compensate me for the depreciation, are just going to be stuck with the car for its lifetime. If at 5 years the trade in value is pennies I just won't change.

As John says, once the price of these cars falls down towards bangernomics money and the price of batteries per kWh goes down there very likely will be affordable third party/DIY mods to increase the capacity of 24 kWh later on. The way I see it: If the car drives like new and the warranty has ran out I would have no problems investing another 10k to my car to get it up to 2..3 times the capacity it had when new. Compared to trading it in for a new 40-60 kWh car 10k is still very affordable. Then just drive it for another 5-10 years with the new battery to get value from your investment.

The chances are,that an electric car will run forever , once new batteries are installed, hence the reluctance of the manufacturers to introduce them more widely when they rely on obsolescence to,generate sales of ICE vehicles.

isnottheword

samih wrote: »

As John says, once the price of these cars falls down towards bangernomics money and the price of batteries per kWh goes down there very likely will be affordable third party/DIY mods to increase the capacity of 24 kWh later on. The way I see it: If the car drives like new and the warranty has ran out I would have no problems investing another 10k to my car to get it up to 2..3 times the capacity it had when new. Compared to trading it in for a new 40-60 kWh car 10k is still very affordable. Then just drive it for another 5-10 years with the new battery to get value from your investment.

I'd be hoping the same. However, you can be sure the manufacturer will screw with it - and mess with the form factor of the battery - making it difficult to retrofit an upgraded battery to an older leaf. I'd be hoping that there would be a range of batteries on the market by then and in tandem with that, some independent specialists who could facilitate a 60kW battery.....

isnottheword

isnottheword wrote: »

I'd be hoping the same. However, you can be sure the manufacturer will screw with it - and mess with the form factor of the battery - making it difficult to retrofit an upgraded battery to an older leaf. I'd be hoping that there would be a range of batteries on the market by then and in tandem with that, some independent specialists who could facilitate a 60kW battery.....

I'm hoping that Nissan will come up with a plan themselves on how to upgrade existing cars as the low residuals hurt them too not just the current owners. But if Nissan won't provide upgraded batteries Kreisel Electric or other similar companies will:

http://www.kreiselelectric.com/projekte/electric-golf/

isnottheword

samih wrote: »

I'm hoping that Nissan will come up with a plan themselves on how to upgrade existing cars as the low residuals hurt them too not just the current owners. But if Nissan won't provide upgraded batteries Kreisel Electric or other similar companies will:

http://www.kreiselelectric.com/projekte/electric-golf/

It remains to be seen. Nissan will weigh up reputational damage vs. their desire to get people to upgrade and shell out for the latest offering.

The other hope is that there will be other reputable third party providers that can help - will check out the one that you mentioned. There's another outfit - indra.co.uk - that reconditions Leaf batteries - replacing dead cells. Hopefully there will be more as time goes on.

Water John

I know it would occupy the boot, but a second 24Kw battery could be fitted as a mod. Batt A and Batt B. One to charge following the other. Then say use A and supplement with B on Monday. On Tues B is the lead etc.
You have a car with 48KW. Would cover most uses.

Will look up those mentioned.

unkel

Villain wrote: »

I did 29,000 km in 2 years so saved about 2k on Fuel but that saving was meant to mean the monthly payments were easier on the finances instead it just ate any equity.

If I had bought an ICE I would be better off by about €1,500 after the years going by my figures

I'd like to see your sums. Not that I don't believe you!!!

Would you mind sharing them - you could attach an excel spreadsheet to your post

I still like the idea of an EV as the main family car, but the sums would be crucial to me...

Lantus

There are three big issues that will affect pcp in particular.

1. Sterling value could potentially affect second hand values

2. Technology will affect equity. Seen now in 24kwh leaf battery but as we move from fossil fuel to electric all cars will see values tumble.

3. Given the above there will potentially be a huge potential backlash of the product. If Nissan shaft all their leaf customers who will either be forced to hand back the keys, sell privately or buy outright then new car sales of leafs is going to crash. I wouldn't buy a PcP on a 60kwh leaf at Nissan's interest rate as a new battery is roughly 2 to 3 years away all the time. Why would a new buyer willingly do this? It's a huge issue for Nissan and the industry as a whole.

You can't sell a product on the premise of three wonderful options and then tell people after three years there is just one.

Water John

The key point is that 60KW will be enough for most. Like once laptops reached a certain level, people no longer bought as the present model fulfilled their needs.
Maybe the present buyers of new diesels will get a bigger burn.

isnottheword

Only problem with your suggestion Water John is that a 2nd battery will add to the weight - so you wouldn't exactly get a 48kW car. Furthermore, there are significant cost implications as it stands right now. Notwithstanding that, there is a 3rd party company doing exactly that in the states right now.

Whats needed is more capacity within as close to the same form factor as currently exists. That's what the battery manufacturers are trying to achieve.

Water John

Yeah, battery density is NB. A couple of research projects on batt look promising. Surely one will be a game changer.
Didn't know anyone had started looked at Mod. Will look it up.

Would insurer's not hammer you for modifying your car?

Villain

unkel wrote: »

I'd like to see your sums. Not that I don't believe you!!!

Would you mind sharing them - you could attach an excel spreadsheet to your post

I still like the idea of an EV as the main family car, but the sums would be crucial to me...

I had them on a sheet somewhere when I worked them out I can do it again but the main figures were

Repayments 16,000
Cash Deposit 4,800
GMFV 11,000
Fuel Savings over 3 years 1725 based on 45,000km, based on comparing it to my Wife's Kadjar which gets 4.5l/100km

I would have expected around 3,500 Deposit to roll into next car based on Equity but that will now be Zero so compared to an ICE which would have some equity I rounded to 1,500.

Hope that makes sense