GFV - Too good to be true

[Meltham Terrier]

l'm, looking at a new (used) car for my wife and we have a short list of 2

Merc EQC400 AMG Line 2022 £34,490 deposit £1k £492.18p/m on 48m

Jaguar IPACE HSE Black

when I've been comparing finance deals MBUK Have the GFV @ £22,210 on a 48m deal, But Magnitude on the same profile are £15,983 or £13,680 depending on lender.
so this makes a huge difference to the monthly payments of £80/100 p/m.

My instinct is to go with the MBUK Finance deal as even though the APR is higher the actual cost p/m is better. But is the MBUK deal going to be better when we get to the end of the deal as the car could be £8 -5k over valued and there will not be any equity in the car for the next deal.

The Jag GFV are much closer together worst £15480 mid £16356 and best £18134.

thanks Andrew

[Discombobulate]

I would forget the equity and go for the deal that gives you the cheapest overall cost. If you do go for the cheaper deal put the monthly savings into an ISA to build up equity if that worries you.

[Dimebars]

If you enter in to a PCP deal and expect equity at the end of the term regardless of deposit, then you're going to be disappointed

The upside of PCP is that you're protected from negative equity at the end of the term, so by taking the MBUK deal with a higher GFV and it being worth less just means that you hand the car back and it becomes their problem

Edited by Dimebars on Tuesday 23 April 17:52

[samoht]

Meltham Terrier said:

My instinct is to go with the MBUK Finance deal as even though the APR is higher the actual cost p/m is better. But is the MBUK deal going to be better when we get to the end of the deal as the car could be £8 -5k over valued and there will not be any equity in the car for the next deal.

If you're saving £100 a month with the MB deal, stick that in a savings account and you'll have £4800 + interest by the end of term.

Paying more per month (with a lower GFV) is an 'investment' into possible future equity in the car at the end of the deal. However there's no guarantee especially with a nearly-new premium EV that the car will be worth it - you might get to the end and find the car's only worth £13k so none of the deals have equity left.

So in general a higher GFV with lower monthlies is better as you keep the money in your pocket rather than being exposed to the swings of the used car market. (Not taking into account the different interest rates).

[SFTWend]

Have you read the "best lease deals" thread?

I think the Merc gets mentioned regularly and could be cheaper to lease if you don't intend keeping it beyond end of finance term.

[cheeky_chops]

SFTWend said:

Have you read the "best lease deals" thread?

I think the Merc gets mentioned regularly and could be cheaper to lease if you don't intend keeping it beyond end of finance term.

This!

https://www.leaseloco.com - Had a etron 3 years and the 4th year extension went up £200pm, plus i'd have to pay for a warranty £1500 pa, servicing, MOT, consumables... All in, it meant it was cheaper leasing a new etron (with better battery/spec too)

[rocket_ron]

Also bear in mind that there are LOTS of EQC prereg lease / PCP deals at the moment and I suspect they will all come to the end of their agreements around the same time. That is bound to have an impact on the supply of used cars hitting the market at the same time. Which in turn is bound to have an impact on GFVs.

Mercedes stopped making these last year and dealers seem to have preregistered a lot of them - presumably so they can shift them cheaper.

BTW - I drove one (a AMG Premium line) and found it weirdly numb and the rolled over a lot in corners. A lot of car for the money though!

1. Edited for clarity

Edited by rocket_ron on Wednesday 24th April 10:23

[119]

One thing I’ve noticed with some pcp deals is the GFV stays the same regardless of deposit and monthlies.

[Dave200]

Dimebars said:

If you enter in to a PCP deal and expect equity at the end of the term regardless of deposit, then you're going to be disappointed

The upside of PCP is that you're protected from negative equity at the end of the term, so by taking the MBUK deal with a higher GFV and it being worth less just means that you hand the car back and it becomes their problem

Edited by Dimebars on Tuesday 23 April 17:52

People gambling on GFVs at the end of a PCP term right now are insane.