WDB
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Post by WDB on Feb 22, 2024 15:35:35 GMT
Well, more like 15 months but the dealer will be on to me well before next May. The subject here is the i3, specifically my 2021 i3S 120Ah. Three years ago, the deal rested on these pillars: - Equity: strong covid-era used values meant that, with half a year of the original PCP to run, I had already pad off more than the old 2017 i3 94Ah Rex had depreciated.
- Congestion Charge: changes to the rules meant that the Rex car, legally if not technically a hybrid, would lose its exemption for our trips into London.
- Utility / futility: the Rex had been a necessary sop to MrsB1's concerns but had scarcely been used outside its obligatory self-maintenance runs. The bigger battery made it superfluous, even to her.
- Interest rates: in the pre-Truss age, money was still cheap and BMW Finance had some it wanted to share.
- Subsidies: the government nearly scuppered the deal by reducing the EV grant threshold as I was about to sign, but...
- Price: ...BMW UK responded by reducing the list price by more than the lost grant.
- Nice to have: the i3S is notably nicer to drive than the older i3 and a much better motorway cruiser.
- Shiny
Things now are a bit different. And I will have a bit of a head-v-heart decision to make.
- Interest rates: still several points above the one in the present PCP.
- Depressed used prices: the GFV is £13,700, which may well be more than the car's trade value - not that I'd expect to be able to buy another one as good for less.
- No more new i3s: BMW's smallest EV is now the iX1 / iX2, neither of which really appeals.
- Still a fine car: no non-financial reason to change.
I always expected to simply pay the final amount and keep the car. It's depreciated further than we hoped, but not catastrophically and it should continue to be useful and enjoyable for several years yet. It's a bit of a 21st-century classic, it does everything we could ask of it and I think we'd miss it if it went. But there is always an alternative, so discuss away.
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Deleted
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Post by Deleted on Feb 22, 2024 16:14:54 GMT
You're pretty much in the same boat as me with my Leaf.
Good luck with your deliberations, I'm going round in circles like a one-legged duck.
I presume you wish to maintain a 2-car household, with at least one, perhaps 2 EVs? Where does the CLS come in to considerations?
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WDB
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Post by WDB on Feb 22, 2024 16:46:07 GMT
You're pretty much in the same boat as me with my Leaf. Well, that did occur to me. Thought it might amuse you to mess with someone else's money for a change. I presume you wish to maintain a 2-car household ... Where does the CLS come in to considerations? It doesn't, really. I expect to have made a separate and final decision about that before then - probably swallowing my aesthetic preferences and buying an iX3. There'll be a larger, longer-distance EV on the drive anyway. |
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Post by EspadaIII on Feb 22, 2024 18:23:09 GMT
Not having ever done a PCP I am not fully au fait with the mechanics, but if you like the car, presumably there are two options: -
1. Hand it back and then try to buy when it recirculates onto the used car market; or
2. Buy it at their pre-agreed price and enjoy a car which does exactly want and know its history.
How would you be overpaying by if you took the second option?
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WDB
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Post by WDB on Feb 22, 2024 19:36:14 GMT
Only (2) makes any sense. Unless I could somehow do a deal with the dealer before they sent the car for auction, I’d have to (a) find it again and (b) pay another dealer’s margin too.
I suppose the real ‘head’ question is whether it’s wise to pay that much for a four-year-old example of what will then be a 12-year-old design, albeit one with recent updates like LED lights and modern infotainment. (Those LED lights seem to upset some other drivers, incidentally — but that’s for another discussion.)
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Rob
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Post by Rob on Feb 23, 2024 0:04:06 GMT
Or you could just hand it back.
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Deleted
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Post by Deleted on Feb 23, 2024 8:48:47 GMT
Not having ever done a PCP I am not fully au fait with the mechanics, but if you like the car, presumably there are two options: - 1. Hand it back and then try to buy when it recirculates onto the used car market; or 2. Buy it at their pre-agreed price and enjoy a car which does exactly want and know its history. How would you be overpaying by if you took the second option? Your second option, EIII, as WDB said, isn't a practical one. If you want to keep the car, just pay the balloon. There are 3 realistic options: 1 - Pay balloon payment, keep the car. 2 - Hand car back to finance company and walk away. 3 - Trade car in for a newer one using any equity remaining between the balloon payment and its trade in value. If this is zero or negative, then go back to Option 1 or 2. My first Leaf PCP ended with min in positive equity - I used that to upgrade to my current one using Option 3. Now that I'm coming to the end of my current PCP, I am likely to be at zero or negative equity, so it'll be Options 1 or 2, accepting there's a small financial hit (tough luck son, you lost this gamble, move on). I would like a newer car and can afford one, however I do not need a newer car. That's where the dilemma lies for me. Unlike WDB, I am considering involving my other car in deliberations, as discussed elsewhere. I *think* in WDB's situation, I'd pay off and keep the i3. Because that's what I'd do with my Leaf, if it hadn't occurred to me that I could use the larger equity in the Civic to renew the fleet entirely. |
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Post by Humph on Feb 23, 2024 9:24:34 GMT
Or, option 4. Buy a car you can afford, that suits your current and foreseeable needs/preferences with money, keep it indefinitely and stop agonising about options 1-3.
😉
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Deleted
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Post by Deleted on Feb 23, 2024 9:33:47 GMT
Or, option 4. Buy a car you can afford, that suits your current and foreseeable needs/preferences with money, keep it indefinitely and stop agonising about options 1-3. 😉 That is actually implied in Option 1. It is also one of the subsequent paths one can take, should one take Option 2. But those of us in PCPs, must take one of the 1-3 Options when the agreement comes to an end. Whether we should have taken the PCP in the first place isn't really part of this discussion, and we've covered it before. |
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Post by Humph on Feb 23, 2024 9:36:30 GMT
My humble apologies.
🙄
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Deleted
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Post by Deleted on Feb 23, 2024 9:44:30 GMT
Sorry Humph, you're allowed to be a Grumpy Old Fart in here.  |
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WDB
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Post by WDB on Feb 23, 2024 9:47:17 GMT
Or, option 4. Buy a car you can afford, that suits your current and foreseeable needs/preferences with money, keep it indefinitely… Nothing wrong with using cheap money to lubricate the ownership of something you might otherwise pay a lump of cash for. ‘Time value of money’, as the accountants say. I am (or will be) in a situation more like yours when you bought your ex-company E: had the car since new, know all about it and have the choice of buying it for a lump of cash or using that cash to do something else. I could have taken the ‘buy’ option in 2021 but, as I explained, there were ‘foreseeable needs’ reasons not to do that then. Those don’t apply this time. |
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Post by EspadaIII on Feb 23, 2024 10:00:57 GMT
Espadrille always wants our cars to be owned outright. And four out of the five are. Mine was a company lease for tax benefit and potential technological reasons. My car goes back in 14 months. I probably have the choice to extend the lease or hand it back. Maybe I could buy it (but as discussed previously there are some tax implications over this) or my company could buy it. Unless there any significant improvements in the technology coming over the horizon, and at present there don't seem to be, I would be very happy to buy the I5, especially as values have fallen.
So I would buy it, Dubya. 12 year old design or not, it is still a head turning car with lots of excellent features and has lasted and been updated well. The Merc does an excellent job of the very long distance work and its depreciation is now very low. Servicing at an indy is no more than any car really. Why change?
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Post by Humph on Feb 23, 2024 10:03:51 GMT
I guess, actually I know, I come at life from a history of variable fortune. The thought of committing to regular monthly payments on anything is hard wired into my “don’t do that” file. Especially when it relates to something that is liable to depreciate.
I’ve had some excellent paydays and others that didn’t happen at all: Overall, I’m well up on what might be regarded as a decent income but it has come sporadically over the years. Of course I’m now in a strong position to forecast my finances but the mindset remains.
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Post by EspadaIII on Feb 23, 2024 10:15:42 GMT
I am sure I read the wise words of a super rich guy about buying and leasing. You buy for investment and lease for use. Buy a house, lease the car; so I can see the logic in leasing a car but whereas it works for a business, like you I am unhappy about personally entering into an ongoing contract for something which depreciates. If I lost my income, I would lose my car...
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