Slack journalism (Z4M)
Discussion
One of the recurrent themes here over the last few weeks has been the appalling residual values of the car many of us love - the Z4M. One guy recounted a £13k hit in under six months.
It was therefore with disbelief that I read the Autocar article last week extolling the strong residuals of the Z4M.
If those guys are so out of touch, can we believe any of the advice they dole out about matters financial?
It was therefore with disbelief that I read the Autocar article last week extolling the strong residuals of the Z4M.
If those guys are so out of touch, can we believe any of the advice they dole out about matters financial?
Edited by Deutscher on Thursday 30th August 17:10
I would've said that Autocar were right tbh...
The early version are still fetching around 15k for a 1998. Impressive.
The later ones (s54) are around the 20k mark.
Unless you meant z4m, in which I agree the residuals of those are tumbling like a slinky, but I'd expect them to level out soon.
Losing 13k in 6 months sounds excessive though, unless he bought new and didn't get the big dealer discount I keep hearing of.
The early version are still fetching around 15k for a 1998. Impressive.
The later ones (s54) are around the 20k mark.
Unless you meant z4m, in which I agree the residuals of those are tumbling like a slinky, but I'd expect them to level out soon.
Losing 13k in 6 months sounds excessive though, unless he bought new and didn't get the big dealer discount I keep hearing of.
f13ldy said:
Unless you meant z4m, in which I agree the residuals of those are tumbling like a slinky, but I'd expect them to level out soon.
Losing 13k in 6 months sounds excessive though, unless he bought new and didn't get the big dealer discount I keep hearing of.
Grovel, apologies. I did indeed mean the Z4M. Error corrected in text, but how do I change the title?Losing 13k in 6 months sounds excessive though, unless he bought new and didn't get the big dealer discount I keep hearing of.
Edited by Deutscher on Thursday 30th August 17:10
f13ldy said:
Losing 13k in 6 months sounds excessive though, unless he bought new and didn't get the big dealer discount I keep hearing of.
This was the quote:rikkimagic said:
Hi there!
Bought my Z4M Roadster in Jan 07.(£44k)
Just had it valued from the dealer as fancied getting rid of it for an 06 M3 as boot too small and far too impractical these days (Going on hols soon and cant even get a suitcase in there to get to airport!)
...have a guess how much its worth now...!
>>>>>>
£31k....Thirty one F(*%^%g grand!
oh my god....
Bought my Z4M Roadster in Jan 07.(£44k)
Just had it valued from the dealer as fancied getting rid of it for an 06 M3 as boot too small and far too impractical these days (Going on hols soon and cant even get a suitcase in there to get to airport!)
...have a guess how much its worth now...!
>>>>>>
£31k....Thirty one F(*%^%g grand!
oh my god....
SortedSo, he's comparing list with trade in. No wonder it's 13k difference. If it had been anything else it would have been far far bigger.
Now consider reality. £44k new. Purchase price, max, £40k (if you can't get 10% without asking, you are rather silly).
To make a fair comparison, you should also take the VAT off (2nd hand sales are subject to margin VAT, not sale price, so ultimatly you can't expect to recover the VAT if you are a private sale), that's down to 34k
6 months, trade in £31k
So, the *real* loss is £3k in 6 months, or <5%. Not bad in real terms.
Of course, one could argue, as 2nd hand cars are margin VAT, that you shouldn't loose the VAT. If that's the case then the loss is £9k in 6 months. Private, that car would be £33-34k, so that 'real(2)' loss would be 6k, or 15% in 6 months. Still not bad if you look at things overall.
If you take actual price paid then the WhatCar depreciation index looks correctish.
J
Now consider reality. £44k new. Purchase price, max, £40k (if you can't get 10% without asking, you are rather silly).
To make a fair comparison, you should also take the VAT off (2nd hand sales are subject to margin VAT, not sale price, so ultimatly you can't expect to recover the VAT if you are a private sale), that's down to 34k
6 months, trade in £31k
So, the *real* loss is £3k in 6 months, or <5%. Not bad in real terms.
Of course, one could argue, as 2nd hand cars are margin VAT, that you shouldn't loose the VAT. If that's the case then the loss is £9k in 6 months. Private, that car would be £33-34k, so that 'real(2)' loss would be 6k, or 15% in 6 months. Still not bad if you look at things overall.
If you take actual price paid then the WhatCar depreciation index looks correctish.
J
Edited by joust on Saturday 1st September 21:43
Obiwonkeyblokey said:
there were 07 reg cars at disk lovett yesterday for 32k, full spec too by the looks of things.
I have done a load on mine too, but happy to keep it for a couple more years so not too worried.
I'm looking to get one in a month or so as they do seem very good value for money at a year old. I suspect you'll get a bit more off when you come to buy too. Makes me think the poor chap they bought it from could have only got £26k ish trade-in.I have done a load on mine too, but happy to keep it for a couple more years so not too worried.
For £30k - £31k now, I think they're a cheap car. Run it for 2 years/30k miles, and I think you'll find you don't do badly on it. (Famous last words...)
haybaby212 said:
yep i got offered £26500 for mine last week Z4M all the important toys and 14k miles told them to p*ss off in the end.
Glad i got a good £14k discount when i brought it but will be forced to keep it for a while yet
Why are you selling so soon?Glad i got a good £14k discount when i brought it but will be forced to keep it for a while yet
Didn't the car live up to expectations?
joust said:
Yes, but that's not the car's fault, that the fault of him for paying 44k!
No...its all the fault of market forces..there are no rules to say that a car must loose VAT as soon as they are registered.. This was a daft excuse made up by dealers to try to justify the massive drop in the values of new cars. If there is enough demand in the market and not enough supply then the values are proped up. The problem is that there are lots of cars in the system, discounts to be had and not really a massive market for private sales of £30k cars..add to the mix the margins that dealers (who are the only real buyers of these cars) and its easy to see why these cars are trading where they are..frankly £30k seems really strong to me Supply and demand curves will always extract VAT out of a deal if supply is anywhere near demand. Why, in a well supplied market, would anyone pay the VAT to bolster someones' profits????? 2nd hand sales only get charged VAT on the margin, so if you pay the VAT element for a second hand car you are more barmy than the person that pays any where near list for a new car in good supply....
joust said:
Supply and demand curves will always extract VAT out of a deal if supply is anywhere near demand.
Supply and demand curves do nothing!!! Its consumers actions ...if they need to pay £30k for a car that was £33k new a year earlier but is in short supply and in demand then they'll do it.. Im some cases they will even pay a premium. Consumers do not sit there and think...hmm must take the VAT off the price of that used good..they think....hmm I want that car and here's what I am willing to pay to own a used one as opposed to a new oneParacetamol said:
joust said:
Supply and demand curves will always extract VAT out of a deal if supply is anywhere near demand.
Supply and demand curves do nothing!!! Its consumers actions ...if they need to pay £30k for a car that was £33k new a year earlier but is in short supply and in demand then they'll do it.. Im some cases they will even pay a premium. Consumers do not sit there and think...hmm must take the VAT off the price of that used good..they think....hmm I want that car and here's what I am willing to pay to own a used one as opposed to a new oneA goods "value" is determined by supply and demand. Nothing else. When sold new, BWM set a price. Those that value the new good above the price asked for it, and that choose to do so, buy one. They may also haggle in doing so buy the car for less.
BMW pays VAT on the new car they've sold and so doesn't keep the full sale price themselves (the money they actually get for the car), but this has nothing to do with the consumer.
The nearly new cars at £32k advertised at present are £32k because that's the point of equilibrium at which the dealer can buy the cars, make a margin, and sell the cars on given the current level of supply and demand. The dealer would much prefer to sell the car for more and actually receive more for the car than BMW did when they sold it new (after VAT, dealer margin etc), however people won't pay it, because there's another dealer elsewhere that's cheaper, or they'll buy a Cayman/350Z/3.0l Z4C instead. Not because they have some value in their mind about how much BMW actually put in their pocket when the car was sold initially.
This is demonstrated by the cars that sell at, or above list, when used. Supply and demand.
joust said:
Supply and demand curves will always extract VAT out of a deal if supply is anywhere near demand. Why, in a well supplied market, would anyone pay the VAT to bolster someones' profits????? 2nd hand sales only get charged VAT on the margin, so if you pay the VAT element for a second hand car you are more barmy than the person that pays any where near list for a new car in good supply....
There is no option whether or not to pay your notional VAT!The components that make up a selling price (cost price, margin, VAT etc) are irrelevant to a private purchaser - they just look at the gross cost they are obliged to pay.
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