PCP's and any equity in jaguars?
Discussion
Hi,
As my car is coming up for renewal I went into my dealer at the weekend and asked about replacing my current x 2.5 sport with a new equivalent model, given my car has only done 29,000 and is A1 I expected some equity in the part ex price above the final balloon payment, however the equity is negligable, have other jaguar owners suffered the same experience? I believe jaguar have come unstuck in the uk 3 years ago they set high balloon final payments expecting residuals to be far higher, now part ex prices are barely above the balloon figure leaving many owners with little or no equity from the current car to put into a new car and questioning whether to keep the current car or walk away from jaguar entirely. I'm asking myself did Jaguar sell endowment home policy's in the late 80's
As my car is coming up for renewal I went into my dealer at the weekend and asked about replacing my current x 2.5 sport with a new equivalent model, given my car has only done 29,000 and is A1 I expected some equity in the part ex price above the final balloon payment, however the equity is negligable, have other jaguar owners suffered the same experience? I believe jaguar have come unstuck in the uk 3 years ago they set high balloon final payments expecting residuals to be far higher, now part ex prices are barely above the balloon figure leaving many owners with little or no equity from the current car to put into a new car and questioning whether to keep the current car or walk away from jaguar entirely. I'm asking myself did Jaguar sell endowment home policy's in the late 80's
Hi Dominic,
Unfortunately this has been the case for most PCP renewals I have seen for Jaguar product. When the X-TYPE was first launched in '01. The residual values were set far to high on the basis that there was next to no discount and high desirability for the product. Unfortunately 12 months down the line, discounting was rife, quality was not as it should be and desirability was on the decrease. As you can imagine, this slapped the RV's and as a consequence, Jaguar Financial Services have taken back *most* of the original cars. However, even now the situation seems to be the same!
The best advice I could ever give you where PCP's are concerned is to put in the absolute minimum deposit you can afford!
Unfortunately this has been the case for most PCP renewals I have seen for Jaguar product. When the X-TYPE was first launched in '01. The residual values were set far to high on the basis that there was next to no discount and high desirability for the product. Unfortunately 12 months down the line, discounting was rife, quality was not as it should be and desirability was on the decrease. As you can imagine, this slapped the RV's and as a consequence, Jaguar Financial Services have taken back *most* of the original cars. However, even now the situation seems to be the same!
The best advice I could ever give you where PCP's are concerned is to put in the absolute minimum deposit you can afford!
Triple 777
I'd be happy with 50% depreciation (I'd have some equity) but we're talking nearer 60% on a 35 month old car with sub 30k mileage fjsh not a mark. Given that the post 2002 models are better built and in the 2.5/3.0 case more scarce (most X sales are now diesel), I'd have expected the residuals to harden not fall through the floor for the AWD models.
I'd be happy with 50% depreciation (I'd have some equity) but we're talking nearer 60% on a 35 month old car with sub 30k mileage fjsh not a mark. Given that the post 2002 models are better built and in the 2.5/3.0 case more scarce (most X sales are now diesel), I'd have expected the residuals to harden not fall through the floor for the AWD models.
Hi Dominic, it's my understanding that they've reduced guaranteed values in line with CAP monitor. I think they work off 90% or something like that.
With regards to misselling, i completely agree with you, the way it should *really* be explained is that you are effectively renting the vehicle with the option to purchase at the end for a pre determined value. As I have said, the primary aim is to safe guard against negative equity with the opportunity of positive equity a little bonus!
With regards to misselling, i completely agree with you, the way it should *really* be explained is that you are effectively renting the vehicle with the option to purchase at the end for a pre determined value. As I have said, the primary aim is to safe guard against negative equity with the opportunity of positive equity a little bonus!
Just to add:
The difficulty they have in setting the GMFVs is that too high and you'll have a 100% hand back ratio, yet to low and it looks like the manufacturer is showing no faith in the product!
If you really want to end up in an equity situation at the end of the term, you could suggest to the business manager that you'd like him to double your annual mileage and therefore reduce the GMFV. You'll pay for it though ultimately in higher monthly payments!
The difficulty they have in setting the GMFVs is that too high and you'll have a 100% hand back ratio, yet to low and it looks like the manufacturer is showing no faith in the product!
If you really want to end up in an equity situation at the end of the term, you could suggest to the business manager that you'd like him to double your annual mileage and therefore reduce the GMFV. You'll pay for it though ultimately in higher monthly payments!
philhopkins said:
Just to add:
The difficulty they have in setting the GMFVs is that too high and you'll have a 100% hand back ratio, yet to low and it looks like the manufacturer is showing no faith in the product!
If you want to see cautious residuals, ask for a PCP quote on an Alfa...
Chris
The reason for the intended equity is often put forward as a perk for the customer, whereas is fact it is there purely to save the Dealers ar5e. The higher the GMV the more liekly that the Dealer (or the finance provider) will make a loss due to the actual value of the car being lower than the GMV.
Also, the GMV has nothing to do with your problem. The depreciation is your problem. If you had been given a GMV that was lower than the one you actually got, then you would have paid higher monthly payments, and would have "equity" in the car However, as your GMV was higher you were "saving" on your payments and hence your equity is already in your bank account. Whatever the GMV, the outcome is the same (ignoring interest differences).
Also, the GMV has nothing to do with your problem. The depreciation is your problem. If you had been given a GMV that was lower than the one you actually got, then you would have paid higher monthly payments, and would have "equity" in the car However, as your GMV was higher you were "saving" on your payments and hence your equity is already in your bank account. Whatever the GMV, the outcome is the same (ignoring interest differences).
Gassing Station | Jaguar | Top of Page | What's New | My Stuff