Residual Values

[gizmo]

As ever keeping any eye on used values. I got this quote for a New as standard 300 C CRD whilst being quite good the important part is the residual value after 3yrs. On my current PCP deal my GFV (residual) is just over £11.000. It would seem that by offering lower monthly payments brokers are banking on the car holding its value hence the higher GFV.

£24981.00
APR:
10.1%
Total Cash Price:
£24981.00
Deposit:
£1000.00
Amount To Finance:
£23981.00
Term:
36 Months
Admin Fee:
£175.00
Option Fee:
£75.00
Interest Charges:
£5197.35
Excess Mileage Charge:
6.34 ppm
TOTAL REPAYABLE:
£30428.35
Regular Payment:
£454.29

Residual Value:
£13278.20
APR:
10.1%
PAYABLE BY:
First Payment:
£629.29
36 Payments of:
£454.29

Final Payment of:
£13353.20

[BMEWS]

Hi Gizmo.

There seems to be a definite improvement in residuals. I ordered (1 week ago now) a standard 300c and was quoted an APR of 5% which dropped the payments dramatically and i'm sure the GFV was in the 11-12k mark.

[UK CHRYSLER 300C]

you are gonna lose out no matter which way you pay for any car,lease,hp or outright ownership,just get it and enjoy the damn thing,I know I am

[BMEWS]

Originally Posted by UK CHRYSLER 300C

you are gonna lose out no matter which way you pay for any car,lease,hp or outright ownership,just get it and enjoy the damn thing,I know I am

as are we all

[watsonofearnock]

I hate to be the ignorant one here but being a canny Scot I have never borrowed money to buy a car - nor leased nor done anything but put my hand in my pocket and paid over my hard cash. Can someone please explain to me in words of one syllable what this is all about - and what the heck PCP and GFV are and what they have to do with buying and then presumably after a period of time, getting shot of a car. Is there a better way than cash? Is there a way to save money by partial payment and walking away? It is maybe time I knew about these things. Sorry but I am confused by all of this.
Cheers John

[gizmo]

Hi John.
PCP (Personal Contract Purchase) ie Lease. GFV (guaranteed Future Value).

It is really a lease deal available to the public you say the car costs 20000 you only pay say 15000 with 5000 deferred as last payment. This lowers the monthly repayments . At the end of the 3yrs options are to pay the 5000 Trade the car ( only if its worth more or at least getting your deposit back) or hand it back. If the car retains its value you sell private or trade, if it is worth less than 5000 hand it back to finance company and then let them take the hit on depreciation. then take out a new deal. its a wee bit more complicated in terms of the deal structure but safer in terms of not tying up lots of cash up front.

[gizmo]

UK Chrysler

As a punter I try to minimise my potential losses. I have used this method for the last 10 yrs changing 2 cars every 2.8 years and have broke even on all but 1 deal. It might not be for everyone but it works for me. Nothing is ever a given but better to try and work the market than be led by the nose. Unless you have loads of money.

[watsonofearnock]

Hi Gizmo, I think you and I will have a wee chat on the 4th May - you can fill me in on the details. Minimizing outgoings is what it is all about and having been retired for 19 years now it is time I garnered my resources.
Cheers John

[gizmo]

Hi John,
No problem.

[Michaelr]

I have 2 CRDs and are banking on them holding good values.