Mclaren residuals
Discussion
Just trying to get people's thoughts. I have been keen on a 720S spider for a while and probably like a lot of us the infamous depreciation increased my desire as there is no way I would spend near enough £300K on a car. However £200K on a 6 month old car with a couple of thousand miles (why don't people drive these cars???) seemed a sweet deal.
The time has come where this is now a reality with nice spiders getting down to he right sort of money so i got in touch with dealers. I normally buy my cars but the dealers are pushing me into a brand new car because the PCP deals make them cheaper than used ones on a per month basis. So, a brand new car with list price of around £300K costs less for 2 years than a 6 month old one that sells for £200K!!!
I'll be the first to admit I don't really get the whole PCP thing (too old I guess) but that situation seems like madness. Surely all it can do is make slightly second hand cars virtually worthless?
From what I can see, the best route forward is to get a brand new one, drive it for 2 years, then if I want to keep a 720 im my life buy a 2 year old one at virtually no money!!!
The time has come where this is now a reality with nice spiders getting down to he right sort of money so i got in touch with dealers. I normally buy my cars but the dealers are pushing me into a brand new car because the PCP deals make them cheaper than used ones on a per month basis. So, a brand new car with list price of around £300K costs less for 2 years than a 6 month old one that sells for £200K!!!
I'll be the first to admit I don't really get the whole PCP thing (too old I guess) but that situation seems like madness. Surely all it can do is make slightly second hand cars virtually worthless?
From what I can see, the best route forward is to get a brand new one, drive it for 2 years, then if I want to keep a 720 im my life buy a 2 year old one at virtually no money!!!
The PCP deals do seem very good on McLaren's at the moment. It's not something I've ever considered - I like to "own" my cars - but if I was looking now, I think it would be hard not to follow your plan.
I knew I'd lose plenty when I bought my 650 and went in with eyes wide open. Even so - the introduction of these PCP deals makes my 650 even more worthless than I thought it would be!
I knew I'd lose plenty when I bought my 650 and went in with eyes wide open. Even so - the introduction of these PCP deals makes my 650 even more worthless than I thought it would be!
davek_964 said:
The PCP deals do seem very good on McLaren's at the moment. It's not something I've ever considered - I like to "own" my cars - but if I was looking now, I think it would be hard not to follow your plan.
I knew I'd lose plenty when I bought my 650 and went in with eyes wide open. Even so - the introduction of these PCP deals makes my 650 even more worthless than I thought it would be!
Yep - I have always done the 'own' thing too. Maybe that fools us into thinking the cars cost less than they do though. The PCP total for 2 years is kicking £100K, and the opinion of Mclaren is that that represents a massive saving on the 'real' depreciation. So, £100K for 2 years and maybe 14000 miles. These really are expensive toys.I knew I'd lose plenty when I bought my 650 and went in with eyes wide open. Even so - the introduction of these PCP deals makes my 650 even more worthless than I thought it would be!
And, given that the PCP on a second hand one at £200K is more, that must mean that Mclaren think that level of depreciation will continue.
I wonder if these figures are the same for the brands that are purported to depreciate less such as Ferrari.
(I know some of the PCP cost is interest, but a surprisingly small amount to be honest)
The mileage limits play a part - I think most of the PCP deals assume something like 5-6k miles, and that would be too little for me. I already have to be conscious of the 12k limit on my extended warranty. Although I've heard the extra miles are quite reasonable (a charge of ~£1 a mile, which in the grand scheme of things would make sod all difference to the cost).
It's worth noting that almost all supercars are going to take a spanking over the next year or two at least and with the amount of them in the market place its only going to keep going in one direction. The biggest advantage I can see with the Mac scheme is that you give it back and wont be left holding an ever depreciating asset.
That said at the end of these deals Mac will have to do some deals to try and get people to stay in these cars, if the GFV is above the market rate at the time then they'll have to do something to make owners want to hang onto them otherwise they're going have a glut of cars they'll have to discount anyway.
I think it's just a short term marketing strategy by Mac, sort of kicking the can down the road.
That said at the end of these deals Mac will have to do some deals to try and get people to stay in these cars, if the GFV is above the market rate at the time then they'll have to do something to make owners want to hang onto them otherwise they're going have a glut of cars they'll have to discount anyway.
I think it's just a short term marketing strategy by Mac, sort of kicking the can down the road.
And herein lies exactly McLaren's problem.
They fiercely want to push you to buy a new car as they inevitably make on the PCP agreement, make more profit on a new car and get to keep McLaren HQ happy with their sales figures.
They then place zero value on the used cars. Try getting a bid from a McLaren dealer on a lightly used car.....they aren't interested at all. So to get out of them, owners have to slit their own throats, pushing used car prices down ever further.
If McLaren valued the used market, they would snap up any PX's, giving healthy trade in values for new car orders which would help the wheels turning but they don't they want to bend you over, every which way.
The number target market for a car manufacturer would be current owners you would think? How can we get them into the dealership to buy a new car? Give them a healthy trade in figure and get them on the new car merry-go-round. but they aren't interested in that.
I'm a current owner, on my second McLaren......three and a half years.......they could easily talk me into a new car if they showed any interest and offered a sensible price for my car. But, they just want to flog as many new cars on PCP's as possible. However, like a Ponzi scheme, there are only a certain amount of new customers out there willing to buy new and take a bath.........they might do it one but they won't do it again...........I won't.
They fiercely want to push you to buy a new car as they inevitably make on the PCP agreement, make more profit on a new car and get to keep McLaren HQ happy with their sales figures.
They then place zero value on the used cars. Try getting a bid from a McLaren dealer on a lightly used car.....they aren't interested at all. So to get out of them, owners have to slit their own throats, pushing used car prices down ever further.
If McLaren valued the used market, they would snap up any PX's, giving healthy trade in values for new car orders which would help the wheels turning but they don't they want to bend you over, every which way.
The number target market for a car manufacturer would be current owners you would think? How can we get them into the dealership to buy a new car? Give them a healthy trade in figure and get them on the new car merry-go-round. but they aren't interested in that.
I'm a current owner, on my second McLaren......three and a half years.......they could easily talk me into a new car if they showed any interest and offered a sensible price for my car. But, they just want to flog as many new cars on PCP's as possible. However, like a Ponzi scheme, there are only a certain amount of new customers out there willing to buy new and take a bath.........they might do it one but they won't do it again...........I won't.
I'm a bit split on the issue of McLaren depreciation.
It's true that their primary focus does seem to be shifting new cars, and they definitely don't help residuals. I bought my 650 knowing it would plummet, and basically accepted I was buying a car which would be difficult to sell and that I should assume would be worthless. Anything above that would be a bonus.
But......... the reality is, I'm driving a proper supercar which frankly should be out of my price range. If McLaren commanded strong residuals, I wouldn't own mine. In fact - I remember the first McLaren I ever saw on the road - an orange 12C that was parked up near some local shops. I thought it was absolutely stunning - and it never occurred to me for a second that one day I'd own one (or actually, it's replacement).
In the 6 months I've owned my car, I've no doubt already lost shed loads - and have shed loads more to lose. But you only live once, I could be hit by a bus tomorrow - and I'm bloody lucky that I own a car that I frankly shouldn't be able to afford.
It's true that their primary focus does seem to be shifting new cars, and they definitely don't help residuals. I bought my 650 knowing it would plummet, and basically accepted I was buying a car which would be difficult to sell and that I should assume would be worthless. Anything above that would be a bonus.
But......... the reality is, I'm driving a proper supercar which frankly should be out of my price range. If McLaren commanded strong residuals, I wouldn't own mine. In fact - I remember the first McLaren I ever saw on the road - an orange 12C that was parked up near some local shops. I thought it was absolutely stunning - and it never occurred to me for a second that one day I'd own one (or actually, it's replacement).
In the 6 months I've owned my car, I've no doubt already lost shed loads - and have shed loads more to lose. But you only live once, I could be hit by a bus tomorrow - and I'm bloody lucky that I own a car that I frankly shouldn't be able to afford.
Sarnie said:
And herein lies exactly McLaren's problem.
They fiercely want to push you to buy a new car as they inevitably make on the PCP agreement, make more profit on a new car and get to keep McLaren HQ happy with their sales figures.
They then place zero value on the used cars. Try getting a bid from a McLaren dealer on a lightly used car.....they aren't interested at all. So to get out of them, owners have to slit their own throats, pushing used car prices down ever further.
If McLaren valued the used market, they would snap up any PX's, giving healthy trade in values for new car orders which would help the wheels turning but they don't they want to bend you over, every which way.
The number target market for a car manufacturer would be current owners you would think? How can we get them into the dealership to buy a new car? Give them a healthy trade in figure and get them on the new car merry-go-round. but they aren't interested in that.
I'm a current owner, on my second McLaren......three and a half years.......they could easily talk me into a new car if they showed any interest and offered a sensible price for my car. But, they just want to flog as many new cars on PCP's as possible. However, like a Ponzi scheme, there are only a certain amount of new customers out there willing to buy new and take a bath.........they might do it one but they won't do it again...........I won't.
I don’t normally say it but I spent 35 years in the trade,dealers hate the current situation,manufacturers are hell bent on market share and moving metal. The attitude is to Hell with tomorrow sell a NEW car today They fiercely want to push you to buy a new car as they inevitably make on the PCP agreement, make more profit on a new car and get to keep McLaren HQ happy with their sales figures.
They then place zero value on the used cars. Try getting a bid from a McLaren dealer on a lightly used car.....they aren't interested at all. So to get out of them, owners have to slit their own throats, pushing used car prices down ever further.
If McLaren valued the used market, they would snap up any PX's, giving healthy trade in values for new car orders which would help the wheels turning but they don't they want to bend you over, every which way.
The number target market for a car manufacturer would be current owners you would think? How can we get them into the dealership to buy a new car? Give them a healthy trade in figure and get them on the new car merry-go-round. but they aren't interested in that.
I'm a current owner, on my second McLaren......three and a half years.......they could easily talk me into a new car if they showed any interest and offered a sensible price for my car. But, they just want to flog as many new cars on PCP's as possible. However, like a Ponzi scheme, there are only a certain amount of new customers out there willing to buy new and take a bath.........they might do it one but they won't do it again...........I won't.
Manufacturers don’t really understand the used car market and in all honestly don’t really care about it despite what they might say
Factory reps constantly call dealers and come up with deals where a new car will be discounted down to the price of a one year low miles used car
So a 300k list car probably transacts at 200k hence the PCP on the new car being cheaper,it’s that simple and to hell with anyone who did pay list at launch time
It’s no different from the bottom to the top (the odd model maybe being the exception) The industry Imo and many I still know working in it say it’s carnage right now
Everyone is fighting for their own survival and will do anything for the next NEW car deal
If I had a pound for every time I heard a manufacturer employee say “why did you sell them that used car” quite frankly manufacturers would be happy to see all used cars buried in a Land Fill they don’t give a f
k about themWe are all cash cows “not loyal and loved customers” once you’ve bought you are consigned to the history books, NEXT!
As a lot of high end dealers stock is SOR even they are not always under pressure to move a used car
The trick is to find a dealer or specialist and work out that he does own the car,be tough and I’m sure you will find a desire to sell you the used car. However I must add it’s not that simple as manufacturers will often revert to the lowest used market price to make the pcp work
It just goes to show across the board whether it’s a 20k 50k 100k 200k or 300k car in the case of getting that sale the car doesn’t actually cost anywhere near the top line figure and is rarely ever sold at the full published list price. Only the few early adopters of new models pay the full up price and boy do they pay through the nose for that privilege
The thought of any car costing 100k cold over 2 years means you have to be super rich or mad IMO
As the above poster says,the fish pond is a certain size,once it’s drained and the fish are all gone then catching fish will be very difficult task
Edited by Juno on Thursday 5th March 13:14
davek_964 said:
I'm a bit split on the issue of McLaren depreciation.
It's true that their primary focus does seem to be shifting new cars, and they definitely don't help residuals. I bought my 650 knowing it would plummet, and basically accepted I was buying a car which would be difficult to sell and that I should assume would be worthless. Anything above that would be a bonus.
But......... the reality is, I'm driving a proper supercar which frankly should be out of my price range. If McLaren commanded strong residuals, I wouldn't own mine. In fact - I remember the first McLaren I ever saw on the road - an orange 12C that was parked up near some local shops. I thought it was absolutely stunning - and it never occurred to me for a second that one day I'd own one (or actually, it's replacement).
In the 6 months I've owned my car, I've no doubt already lost shed loads - and have shed loads more to lose. But you only live once, I could be hit by a bus tomorrow - and I'm bloody lucky that I own a car that I frankly shouldn't be able to afford.
Agree with all of that, the cars are amazing which is why I've still got mine.It's true that their primary focus does seem to be shifting new cars, and they definitely don't help residuals. I bought my 650 knowing it would plummet, and basically accepted I was buying a car which would be difficult to sell and that I should assume would be worthless. Anything above that would be a bonus.
But......... the reality is, I'm driving a proper supercar which frankly should be out of my price range. If McLaren commanded strong residuals, I wouldn't own mine. In fact - I remember the first McLaren I ever saw on the road - an orange 12C that was parked up near some local shops. I thought it was absolutely stunning - and it never occurred to me for a second that one day I'd own one (or actually, it's replacement).
In the 6 months I've owned my car, I've no doubt already lost shed loads - and have shed loads more to lose. But you only live once, I could be hit by a bus tomorrow - and I'm bloody lucky that I own a car that I frankly shouldn't be able to afford.
I don't have a problem with depreciation as such, it's part of the process. My issue is McLaren's input into the depreciation curve of their cars;
- Constantly punting new cars over used cars
- Not being interested in used cars
- PX values to make your eyes water, if you can get a bid at all
- Known issues with paint and gearboxes
- Refusing to allow Indy's to establish a network for older cars to be serviced cheaply or cheaper than dealers
- Expensive warranty costs
- Refusing to release paint codes
- Flooding dealerships with unordered stock that they have to shift
- Releasing new models almost every few months
- Offering huge discounts on stock they can't move and freely advertising it, killing the second hand market for current owners. If you own a 1 year old McLaren and try and sell it, you can guarantee that you will have people tell you..."I have been offered a brand new car from McLaren directly, with a discount equal to your asking price, why would I buy your car?".......so you have to drop your price further....
However, I do love my car!
My 570 is a 2016 car but at the money I paid for it there is nothing comparable (R8 V10, 911 Turbo etc etc), I could have afforded a new car on a PCP but having mileage limitations etc doesn't suit me not to mention the merry go round you potentially get on having to either hand back or change every two years. It's not only Mclaren who are pushing an endless stream of new models and special editions I just don't see where all these buyers are coming from tbh...to change from a 720S to a 765LT is prob gonna cost the guts of £200k that just ain't sustainable.
I don't think McLaren's depreciate any more than other supercars. Perhaps if bought at the full MRRP but but very few pay that.
A new 12C was £168k in 2011. Assuming most people actually paid list the same would retail at around £68k now. £100k depreciation in 9 years = £11k pa. Yes that's a lot of money but not for a 'supercar'. The 12C lost £60k in its first 4 years and then depreciation slowed so £40k in following 5 years, or only £8k pa.
The issue is people don't keep cars long enough, they continually want to change every 12-36 months when depreciation is the most severe. If people held their cars longer the depreciation would not be as severe but there is always a deep desire by many people to have a new car and this is what drives the market, fuelled by 2/3 years finance deals adding to the 1-3 year change cycle.
McLaren are a company that make money by selling new cars so you can't blame them for happily meeting the desire for new models when punters grow tired of their 2 year old cars.
IMHO McLaren should be offering 7 year warranty & service packages to at least equal Ferrari. As they already give a 3 year warranty this is only going to cost them approx. an additional £17k in warranty and £7k in servicing over 7 years. £24K per car (probably a lot less at non-retail rates) which is much less than the near £100k discounts they have been offering.
As has been pointed out above these 2 year finance deals are just kicking the can down the road and not a real solution as above but also people need to keep their cars longer to even out the overall depreciation.
A new 12C was £168k in 2011. Assuming most people actually paid list the same would retail at around £68k now. £100k depreciation in 9 years = £11k pa. Yes that's a lot of money but not for a 'supercar'. The 12C lost £60k in its first 4 years and then depreciation slowed so £40k in following 5 years, or only £8k pa.
The issue is people don't keep cars long enough, they continually want to change every 12-36 months when depreciation is the most severe. If people held their cars longer the depreciation would not be as severe but there is always a deep desire by many people to have a new car and this is what drives the market, fuelled by 2/3 years finance deals adding to the 1-3 year change cycle.
McLaren are a company that make money by selling new cars so you can't blame them for happily meeting the desire for new models when punters grow tired of their 2 year old cars.
IMHO McLaren should be offering 7 year warranty & service packages to at least equal Ferrari. As they already give a 3 year warranty this is only going to cost them approx. an additional £17k in warranty and £7k in servicing over 7 years. £24K per car (probably a lot less at non-retail rates) which is much less than the near £100k discounts they have been offering.
As has been pointed out above these 2 year finance deals are just kicking the can down the road and not a real solution as above but also people need to keep their cars longer to even out the overall depreciation.
Edited by Bispal on Thursday 5th March 13:44
The PCP deals are skewed to being cheaper on new cars because McLaren need to shift new cars. Whilst the cost is £100k for two years that is a much cheaper cost of ownership than someone who bought one a year ago and was trying to sell it now.
In an ideal world of course McLaren would support the used market but they have a need to shift a certain amount of new cars and that will always be the priority.
Have to say I think even in this market a well bought 720 S Spider would be cheaper to own over 2 years than a new one on PCP which would cost £100k. By well bought I mean sub £200k which I reckon is achievable.
Personally I would really, really struggle to sign up for a PCP which cost £100k over two years whatever the car.
In an ideal world of course McLaren would support the used market but they have a need to shift a certain amount of new cars and that will always be the priority.
Have to say I think even in this market a well bought 720 S Spider would be cheaper to own over 2 years than a new one on PCP which would cost £100k. By well bought I mean sub £200k which I reckon is achievable.
Personally I would really, really struggle to sign up for a PCP which cost £100k over two years whatever the car.
Cheib said:
The PCP deals are skewed to being cheaper on new cars because McLaren need to shift new cars. Whilst the cost is £100k for two years that is a much cheaper cost of ownership than someone who bought one a year ago and was trying to sell it now.
In an ideal world of course McLaren would support the used market but they have a need to shift a certain amount of new cars and that will always be the priority.
Have to say I think even in this market a well bought 720 S Spider would be cheaper to own over 2 years than a new one on PCP which would cost £100k. By well bought I mean sub £200k which I reckon is achievable.
Personally I would really, really struggle to sign up for a PCP which cost £100k over two years whatever the car.
Here we go again..... You need to own the car longer than 2 years to minimise the depreciation year on year. If people keep buying cars every 2 years than it perpetuates the depreciation cycle! In an ideal world of course McLaren would support the used market but they have a need to shift a certain amount of new cars and that will always be the priority.
Have to say I think even in this market a well bought 720 S Spider would be cheaper to own over 2 years than a new one on PCP which would cost £100k. By well bought I mean sub £200k which I reckon is achievable.
Personally I would really, really struggle to sign up for a PCP which cost £100k over two years whatever the car.
It is hard to look past the new car when it costs a similar amount to re-financing your existing car at the end of the original term.
The cost over two years is becoming the only thing that really matters as it effectively puts a cap on expenses/depreciation/loss.
They seemed to sell the 600 LT Spiders quite quickly when they offered to rent them out at circa £46000 for 24 months.
And those buyers will probably be happy to buy another one as they knew total costs from the start, and that the high GFV means that they will hand the car back.
So they have gained sales and cash flow at the expense of a rival. In these times of low-cost credit we could see some great offers if each supercar manufacturer joins this race. Imagine a new 720 or 488 for £25000 per annum, or a 570 for £15000 per annum.
The cost over two years is becoming the only thing that really matters as it effectively puts a cap on expenses/depreciation/loss.
They seemed to sell the 600 LT Spiders quite quickly when they offered to rent them out at circa £46000 for 24 months.
And those buyers will probably be happy to buy another one as they knew total costs from the start, and that the high GFV means that they will hand the car back.
So they have gained sales and cash flow at the expense of a rival. In these times of low-cost credit we could see some great offers if each supercar manufacturer joins this race. Imagine a new 720 or 488 for £25000 per annum, or a 570 for £15000 per annum.
Bispal said:
I don't think McLaren's depreciate any more than other supercars.
Head in sand. The 458 was it's closest competitor at the time in 2011. 'didn't depreciate any more...'? What's the 675 done vs the speciale as well? Bispal said:
A new 12C was £168k in 2011. Assuming most people actually paid list the same would retail at around £68k now. £100k depreciation in 9 years = £11k pa. Yes that's a lot of money but not for a 'supercar'. The 12C lost £60k in its first 4 years and then depreciation slowed so £40k in following 5 years, or only £8k pa.
And no one bought a new 12c without options either at £168k. Average car was £190k if not a little bit more depending on cf options. Albeit there was some money returned for the non working nav system otherwise known as Iris1.Bispal said:
IMHO McLaren should be offering 7 year warranty & service packages to at least equal Ferrari. As they already give a 3 year warranty this is only going to cost them approx. an additional £17k in warranty and £7k in servicing over 7 years.
Since when has Ferrari ever offered 7 year manufacturer warranty? It's 4 years, 7 years for service.isaldiri said:
Bispal said:
I don't think McLaren's depreciate any more than other supercars.
Head in sand. The 458 was it's closest competitor at the time in 2011. 'didn't depreciate any more...'? What's the 675 done vs the speciale as well? Bispal said:
A new 12C was £168k in 2011. Assuming most people actually paid list the same would retail at around £68k now. £100k depreciation in 9 years = £11k pa. Yes that's a lot of money but not for a 'supercar'. The 12C lost £60k in its first 4 years and then depreciation slowed so £40k in following 5 years, or only £8k pa.
And no one bought a new 12c without options either at £168k. Average car was £190k if not a little bit more depending on cf options. Albeit there was some money returned for the non working nav system otherwise known as Iris1.Bispal said:
IMHO McLaren should be offering 7 year warranty & service packages to at least equal Ferrari. As they already give a 3 year warranty this is only going to cost them approx. an additional £17k in warranty and £7k in servicing over 7 years.
Since when has Ferrari ever offered 7 year manufacturer warranty? It's 4 years, 7 years for service.And a £190k 12C would be £85k now
To 'at least' equal Ferrari.
Hopefully most people got the point I was making...
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