My experience and observation. I apologise if this sounds excessive to some and do agree re Dacia's reality but it is part of the salary package I work hard to earn.
The PCP and finance is generally provided by the subsidiary of the motor company or through a tied arrangement. VW UK FiServ are on the same road as VW UK in Milton Keynes. They are technically separate entities as they need to be by law. Finance is a large part of moving new tin. Yes the lease termination value or balloon payment is the issue. It does need management. If the finance company want to push their luck and own the risk then thats their issue but if they leave it with the customer then we have PPI all over again. I am not looking forwards to hearing that on the radio for 5 years.
JLR have always had high lease costs and realistic termination values. I guess it is why I have never ended up on one as I always found better deals so it does work.
As mentioned before I got my Mercedes E Estate on a Personal Hire Arrangement at £550/month. 3 months payments up front and then 23 more over 2 years, then hand it back and walk off. So a £76k car new for two years cost £14,300. Rather a lot less than it would have to buy and sell.
The end of the lease was interesting. MB sub-contract/disposal the collection to British Car Auctions (BCA) who inspected it for all the usual elements and then took it away. I asked them for a settlement figure and got £54k but if I looked at the car value in the usual places and got £38-44k which is what i would have paid. Apparently some rule says that the lease owner is not permitted to buy it directly. A weird moment happened some three months later when I parked in the Reading Oracle car park and came back to my new car to find the old MB parked right next to it. The owner came back and said he had purchased it from an MB dealer for £42k. Apparently the dealers like going to BCA to get the pre-approved models ? So they lost a bucket on that exchange.
When buying the Audi through carwow I was offered 9% discount for a cash purchase and 15.5% if I took the Audi PCP. They said it was normal as the PCP had a "cash-back" element. If I did not want to pay cash I was advised to take the PCP and then pay it back in full within 1 month. They calculated the interest in real time (monthly) and so I would only pay one month.
At the end of the day they get to make a decision on making profit or taking a loss across both businesses. Its not illegal to take advantage of someone wanting to give you free money. Well hardly free but in this context its pretty close. If they want to lose money and get too good at it then the board sack them.
It would be sad if the current C and E diesels suffer as they are amazingly efficient cars. Mind you if you are looking for a bargain then it would be worth keeping an eye open. Nice little GLC 220d.
