Talk Morgan Forums Community The Malvern Arms Car Market in 2017

That is bad news - in my innocence I assumed with the electronic odometers that they would be pretty secure.

Is the only real cross check against the historic recorded MOT mileage then ?

The FSA is, already, concerned about the car finance industry.
It has the potential to be the next financial problem.
Car sales are not under the control of the FSA.
For how long?

PCP is simply wrong. When I bough my late 2008 MB car in 2015 for less than £10k it was "cheaper" to buy it on a PCP than HP, even though I intended to buy it at the end of the PCP. Which I have done.
Why?
A dealer "incentive".
I ran a proper 5 year DCF on the deal, including buying the car out after 2 years.
Compared with HP at almost credit card rates, the MB PCP cost less however measured.
Why?
I still don't understand.
Base rate is effectively insignificant.
Companies like MB can borrow at close to zero %.
They charge 4 to 7% on PCPs, yet on simple HP the rates are closer to 10%.

I can only assume that there is a hidden agenda.

Now Morgan is following.

Not really. Most clocking goes on before the MOT due date for that very reason.

Thanks for the information - I think !

So new car or post 3 years then I guess.

On the Jag they almost insisted that I paid 50% when I picked it up and 50% at zero interest after 2 years. I decided to go for it even though I had the cash ready. I don't make much on the funds invested but it is better than zero. I can only think that they hope that I will trade it in on a new car in 2 years time.

I may even do that as it is diesel and I can see there will be problems before long.

By the way we saw a Tesla Model S on the weekend. Nice car!!!



A bit above my budget though, both in power and money.

Put simply, as I have said before, I don't want or need a car that has more than about 200hp, I just want an attractive looking car with good acceleration and handling, I like AWD and I would want a range of about 600km with the aircon running. Oh! and I don't want to have to pay the price of a single bedroom apartment for it.

The vast majority of cars are now "bought" on PCP or similar. The vast majority of cars are diesels.

Political incompetence has resulted in a collapse in the residual value of diesel cars.

The result will be a shortfall between the forecast value and the actual value when the cars are returned to the dealer, and that's where the problem is.

This could all have been avoided had the situation been managed competently.

Yesterday I have been reading in a newspaper that more than one third of all car leasing contracts in Germany are designed in a way that the consumer has to pay for unforeseen deprecation when the contract ends. This is currently a big oncoming issue regarding the huge number of current contracts because unofficially confirmed is that the value of Diesel cars has dropped by minimun around 20% in addition to the normal deprecation.
Not only privat persons are involved but also big company fleets which could be a good thing for consumers because the companies have the money to start a case model where single consumers are not allowed to start class action law suits.
Case model is just a hope, we don‘t have US laws system.

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.

A good bargain both for you and the second owner - and that's exactly why I can't see that the business model is sustainable. There was £56k, not £75k, of customer value in the car, and to realise that value MB has to design, manufacture, market the thing and run a finance operation and a dealership and a commercial relationship with BCA.

My point is that either MB can build these cars for way, way less than £56k (In which case why are they pitching the ticket price so high?) or it's not going to be sustainable in the long-term.

I really hope the PCP bubble doesn't burst the way that PPI did, but at the moment the signs are all there, and unlike the banks I'm not entirely sure the motor manufacturers will be able to survive it so easily...

https://www.ft.com/content/0e651206-0ee1-11e7-a88c-50ba212dce4d

I would imagine gross profit is way more than 25%....