Ex PCP value propositions

kindalen

With all the talk of PCP here on boards I am wondering what makes and models people predict will be good value/bargain second hand buys when they are handed back.

Sono

Would like to hear people's views on this too, there will surely be second hand bargains to be had for cars that are 3 years old. Failing that I will probably buy my car in England.

Toyotafanboi

Do many people actually hand back their PCP cars and walk away? I'd say that scenario is in the minority and even at that dealers aren't going to give away cars just because they've been handed back.

Supply and demand would dictate the bargains moreso i reckon so I'd be looking at what cars were popular sellers 3 years ago as there will be a flood of them coming onto the market as we speak and will have to be priced competitively to sell.

Cloudio9

Toyotafanboi wrote: »

Do many people actually hand back their PCP cars and walk away? I'd say that scenario is in the minority and even at that dealers aren't going to give away cars just because they've been handed back.

Supply and demand would dictate the bargains moreso i reckon so I'd be looking at what cars were popular sellers 3 years ago as there will be a flood of them coming onto the market as we speak and will have to be priced competitively to sell.

The majority would roll over into new pcp contacts so effectively yes most cars are handed back to the dealer.

There'll be a flood of those boring tucsons around in 2019.

Toyotafanboi

Cloudio9 wrote: »

The majority would roll over into new pcp contacts so effectively yes most cars are handed back to the dealer.

There'll be a flood of those boring tucsons around in 2019.

Handed back is poor terminology then I'd say.

"Handing back" would imply to me at least that the car was given back and that the "renter" walked away.

I think "traded in" would still describe the scenario you mentioned the best.

I think :pac:

Cloudio9

Toyotafanboi wrote: »

Handed back is poor terminology then I'd say.

"Handing back" would imply to me at least that the car was given back and that the "renter" walked away.

I think "traded in" would still describe the scenario you mentioned the best.

I think :pac:

Yeah but in the context of this thread we're talking about numbers of second hand cars coming on the market.

galwaytt

...in the motorcycle market in the UK there has been a flood of certain models onto the used market at the end of the PCP cycle which has depressed the values of them and made them attractive to buy.

In particular modes which are expensive such as BMW, Ducati etc : models which ordinarily people couldn't have got on to if it weren't for PCP.

It'll be interesting to see what happens here...

colm_mcm

Cloudio9 wrote: »

Yeah but in the context of this thread we're talking about numbers of second hand cars coming on the market.

I took it to mean potential bargains where someone hands back a car with a 30% GMFV

jimmycrackcorm

colm_mcm wrote:

I took it to mean potential bargains where someone hands back a car with a 30% GMFV

Doesn't necessarily mean you'd be able to buy at that though...

colm_mcm

jimmycrackcorm wrote: »

Doesn't necessarily mean you'd be able to buy at that though...

Oh absolutely. But I think there is a belief that many people buy on PCP without knowing how it works and won't be in the position to buy another car when it's time to change.
Of course they won't dump stuff on to the market below market value.

Toyotafanboi

I'd be interested to know who is just not needing a car at the end of the 3 years and is handing back and walking away. Although an option that is available, I can't see why anyone would do it over refinancing the baloon payment.

colm_mcm

Is there a possibility that your suitability for finance might change over the 3 years? You might be refused the credit the second time?

tedpan

colm_mcm wrote:

Is there a possibility that your suitability for finance might change over the 3 years? You might be refused the credit the second time?

It's rare. Once you kept up with the payments over the previous 36 months, the banks are more than happy to continue lending.

R.O.R

colm_mcm wrote: »

Of course they won't dump stuff on to the market below market value.

But due to large numbers being dumped in to the market, market value could be below GMFV on a few things when a lot of PCP deals mature.

I was hammering the RV on Tucsons as I think the market will be flooded with low mileage 3 year old ones.

JoeA3

There's bound to be a fair selection of VW's... 151/152 Passats and Golf's, mostly well spec'd Highlines.

Falcon L

Don't rely on PCP cars coming onto the market at 3 years old. Only the minority of PCP deals last the full 3 years. Garages start hounding the owner to change around 2 years in. As I was getting in to my new PCP car, the salesman told me to come see him in a year for a valuation.

colm_mcm

R.O.R wrote: »

But due to large numbers being dumped in to the market, market value could be below GMFV on a few things when a lot of PCP deals mature.

I was hammering the RV on Tucsons as I think the market will be flooded with low mileage 3 year old ones.

Oh without doubt it will be a victim of its success, and it's not as if they (dealer) made money on them the first time round when they were giving them away.
Then again I was saying the end was high for Qashqais 6/7 years ago.

Wouldn't GMFV on a PCP Tucson only be 9 grand min? Can't see them being the wrong side of that.

MarkN

colm_mcm wrote: »

Oh without doubt it will be a victim of its success, and it's not as if they (dealer) made money on them the first time round when they were giving them away.
Then again I was saying the end was high for Qashqais 6/7 years ago.

Wouldn't GMFV on a PCP Tucson only be 9 grand min? Can't see them being the wrong side of that.

Funny that you mention the Qashqai, the market has been flooded with them for years yet having traded one in back in Feb for a new model, they hold their value very well.

kindalen

I am talking about cars at the end of pcp cycle that are for sale. ROR mentions Tucsons, I wonder are there any small seller cars that will be hard sells for dealerships as well as the volume sellers like Passat, Golf and Tucsons.

Needles73

Toyotafanboi wrote: »

I'd be interested to know who is just not needing a car at the end of the 3 years and is handing back and walking away. Although an option that is available, I can't see why anyone would do it over refinancing the baloon payment.

There is one very simple reason to hand in and walk away. If the flood of cars coming of PCP or U.K. Exchange rate/brexit depresses the car value enough you may be better to hand back and walk away. For example you have a new Passat on PCP and end of three years say gmfv is 12k but you can get a higher spec same year Passat in from U.K. for 10k you may decide to let vw take car.

Zonda999

I share the view of the OP in attempting to try and predict what cars might be good value in our new PCP reality but honestly I don;t think theres any simplistic way of trying judge and predict this. Ultimately, someone there mentioned the Qashqai and how they managed to hold their value extremely well. To that I'd say, of course they did, mid sized crossovers were in and still very much are.

I reckon to see the kind of value the OP (As well as myself) would crave, there would need to be some kind of material change in the market, something of the likes of how MPV's got dumped and Mid sized SUV's became immensely popular. I beleve if we take something like the Tucson, yes they are immensely popular here, but I think they will continue to be popular and there won't be any bargains in two years time. Yes, the lure of a new car ia always strong for many people, however, there are still a tonne of people who simply don;t want a new car and would be the kind of value consscious buyer who will always buy used and will judge the market as to what age of used is the best shout at any given time

S over all I just think desirable cars will continue to hold their value well as they always have and cars that are out of favour won't. If thats too simplistic I'm sorry, I just thinks its the reality:cool:

Casati

Needles73 wrote: »

There is one very simple reason to hand in and walk away. If the flood of cars coming of PCP or U.K. Exchange rate/brexit depresses the car value enough you may be better to hand back and walk away. For example you have a new Passat on PCP and end of three years say gmfv is 12k but you can get a higher spec same year Passat in from U.K. for 10k you may decide to let vw take car.

I get that logic but can you buy a high spec 2014 in the U.K., pay VRT and ferry and air fare today for 10k or even 12k?? I dont think so - if you lucky you might pick up an ex lease 150,000 miler in base S spec but thats not going to be so attractive to somebody who bought a new one here three years ago

bmwguy

Casati wrote: »

I get that logic but can you buy a high spec 2014 in the U.K., pay VRT and ferry and air fare today for 10k or even 12k?? I dont think so - if you lucky you might pick up an ex lease 150,000 miler in base S spec but thats not going to be so attractive to somebody who bought a new one here three years ago

He only used those figures as a hypotethical example...not actual figures.

Needles73

bmwguy wrote: »

He only used those figures as a hypotethical example...not actual figures.

Correct- just a hypothetical reason to hand a car back

bmwguy

Needles73 wrote: »

Correct- just a hypothetical reason to hand a car back

I think your logic is sound on particular models it could be cheaper to walk away and buy in UK depending on FX rates at the time.

161/2 520d se..... be a good amount of them about in 2 years time. With the new model out this year and plenty UK models about too I reckon they'll be a bit of value.

I know quite a few people in one who are on mileage deals /car allowance from work & they are of course popular on business leases too.