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Dusty

Member Since: 23 Sep 2013
Location: London
Posts: 1022

2015 Discovery 4 3.0 SDV6 HSE Auto Corris Grey

I think the GFV's are a lot more realistic these days. I done a PCP back in the late 90's, put in a £5k deposit and after 3 years was offered the GFV as my PX, therefore having to put my hand in my pocket to provide a new deposit, I'd felt like I'd done £5k in hard cash!!

If I finance these days I use HP to avoid any possible hassles in the future. Discovery 4 HSE
SDV6
2015

20th Feb 2016 4:33 pm

Someone-Gone

Member Since: 21 Dec 2015
Location: Gone
Posts: 5117

My Bank is doing personel loans at 3.4% APR. Didn't appear excessive, but I tend to save up, then purchase, albeit I accept I am in the old fashioned minority.

I do sometimes wonder about getting one of these LR loans just for the discount, then paying it off immediately, but knowing my luck, I'd end up getting it wrong!

20th Feb 2016 4:44 pm

Red Merle

Member Since: 30 Aug 2014
Location: Liskeard
Posts: 7441

Dealers are even know to suggest doing exactly that.

Land Rover Finance are also very helpful when it comes to taking over payments and reducing interest payments (unlike by mortgage company, who put every possible obstacle in the way) and have even suggested ways of taking additional early payment that I hadn't even thought of.

Land Rover Finance is very helpful in exactly the same that that Land Rover "Customer Services" isn't!

2011 - 2015: 3 x FL2
2015 - 2017: 2 x D4
2017 to date: FFRR SDV8
2023 to date: 2 x FL2 as “second” cars 🙄

2021 to date: Hinckley built ‘14 Triumph Trophy 1200
2022 to date: Hinckley built ‘14 Triumph Trophy 1200 & sidecar!
(One of only two known to exist in the world!)

21st Feb 2016 10:10 am

scimmiamagia

Member Since: 05 Jan 2016
Location: Surrey
Posts: 130

I have been looking at PCP with other manufacturers and they are all slightly different.

For example, a £32k BMW X5 works out at £250 pcm, compared to LR at £400! Same period, same deposit, same mileage.

Any suggestions as to why?

I am told that LR set the GFV lower to ensure there is some equity, having taken most of it in repayments!

1st Mar 2016 6:21 pm

Red Merle

Member Since: 30 Aug 2014
Location: Liskeard
Posts: 7441

With so many comparisons made simply on the basis of monthly cost, there's little incentive for manufacturers and their dealers to be realistic and honest about residual values. All they really need to do is set the highest GMFV that the finance company will dare to underwrite and to hell with equity at the end of the agreement!

If the assumed value at the end of the agreement looks conspicuously high, then suggest it's to do with "superb residuals"; it's what the prospect wants to hear!

If it falls short of the GMFV at the end of the agreement, the finance company can always press for maximum dilapidation charges to help bridge the gap.

An acquaintance got hit by this. His 320d's contract was set with an unrealistically low mileage assumption and when it came to the end, the monster excess mileage charges and the complete lack of any equity meant that he could not afford to walk away. He had to sign up for a new agreement, on a poverty spec 320d, at an increased cost and the whole sorry cycle started again....

The GMFV on my own D4 is only around 70% of the current private selling price of a similar, 3 year old, car with the correct contract mileage.

I think LR are being realistic and sensible. BMW are being well, erm, BMW

2011 - 2015: 3 x FL2
2015 - 2017: 2 x D4
2017 to date: FFRR SDV8
2023 to date: 2 x FL2 as “second” cars 🙄

2021 to date: Hinckley built ‘14 Triumph Trophy 1200
2022 to date: Hinckley built ‘14 Triumph Trophy 1200 & sidecar!
(One of only two known to exist in the world!)

1st Mar 2016 7:28 pm

Dusty

Member Since: 23 Sep 2013
Location: London
Posts: 1022

It's good to hear that LR are at least being realistic with their GFV, because many manufacturers clearly are not. We are in the market for a new car for SWMBO and she quite fancies the new Kia Sportage. We made enquiries about a particular model that retails at £25.5k. I asked for a quote on their finance assuming an £8k deposit. The salesman came back with a huge smile telling us our repayments would only be £174 per month over 36 months. Very good says I, but what on earth was the GFV, £13k he says

I pointed out that for me to realise another £8k deposit in 3 years time, the car would have to maintain approx 82% of it's value

And to generate any sort of deposit it would have to be worth over 50% of it's original price!!!

I'm sure these figures could have been jigged to be more realistic, but I told SWMBO to get her coat before we could find out

Discovery 4 HSE
SDV6
2015

1st Mar 2016 10:07 pm

Seeby

Member Since: 22 Jun 2011
Location: West Sussex
Posts: 197

2007 Discovery 3 TDV6 SE Auto Tonga Green

Anecdotal, but talking to the LR dealer I use "70-80% of all new LRs and RRs they sell are on PCP". It's a clever marketing tool where they can support by interest rates / deposit contributions etc and "manage" the customer when you come to sell.

Mercedes dealer also stated that c80% of all new cars they sell are PCP.

Is it a Win:Win? Consumer gets a new car for the same price as a 2nd hand one when looked at by monthly payments. Dealer sells more cars. Demand increases which helps 2nd hand values.

1st Mar 2016 11:25 pm

scimmiamagia

Member Since: 05 Jan 2016
Location: Surrey
Posts: 130

Thanks Seeby

This is main concern. Who can be trusted? Is it better to pay more to the loan company in the first place on the basis that the car 'might' have some equity despite that equity being eaten up by the repayment in a peter v paul payment battle to keep the rental payment (which is what it is) down to a minimum in the first place? Are we not conned/pleasantly surprised by the equity when we sell making us think we have made a good choice when we could have saved the same or more in the duration? 400-250=150 pcm x 36 = £5600 saving.

2nd Mar 2016 12:25 am

dc130john

Member Since: 08 Sep 2015
Location: Somerset
Posts: 70

2010 Discovery 4 3.0 TDV6 HSE Auto Galway Green

Just a couple of observations:

Firstly decide if you are wanting to keep the car after the finance period has finished or will be trying to change for a new one again.

If you want to keep the car then look for the lowest APR on an HP loan over the shortest term that fits your budget. Also be aware that if you use a personal loan, the bank/finance company have not interest in your car which means that if you have any issues with the car you are on your own and still liable for the payments.

If you want to upgrade every few years, then the Land Rover PCP would be my suggestion. With the PCP on a D4 you can get a LR finance deposite contribution of £3k, the benefit of a SENSIBLE GMFV and APR plus you will be able to go back to Land Rover Finance if you have any issues with the vehicle and they will be duty bound to support you.

Looking at the equity side, have a look at the payments for a 2,3 or 4 year PCP as the payments I suspect will be lower on a shorter term agreement due to the strength of the GMFV's earlier on in the agreement. I think you can do any term up to 48 month so you could do a 28 or 32 month agreement if that matched your budget.

Have a look around to see what a 3 or 3 year old D4 is making privately and that will give you an idea of what equity you are likely to have.

For me I would go down the PCP route, have the benefit of a new car, 3rs warranty, £3k for LR and cash in my pocket. Just make sure that you have a sensible monthly payment, not too low. If your payment is lower than the average monthly depreciation of the D4 then all you are doing is burning your equity to subsidise an unrealistic low monthly payment.

Hope this helps D4 3.0 TDV6 HSE Galway Green Black Leather Adaptive Xenons Logic 7 TV Pre-heater
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2nd Mar 2016 7:30 am

scimmiamagia

Member Since: 05 Jan 2016
Location: Surrey
Posts: 130

The intention is always to keep a car for as long as possible but life has a havit of getting in the way or reliability issues start making the decision to keep the car difficult, as was the case with my D3. I dare say i would still be driving it now, 5 years later had the thing started without needing to be jump started every time. I have had current car for over 3 years and now it's too small for a growing family so again while the intention to keep it longer is there reality has bitten. Have kept current car longest of all. Who's to say next car won't be a lemon and i will have to sell sooner than expected. Hence my dialemma.

I am not sure i buy the whole LR PCP GFV is realistic arguement. As stated above if i were to save the difference between the bmw payment and the LR payment it makes the effective gfv of the bmw £5k less which in this instance means the effective gfv is actually less than LR on a similar priced car.

2nd Mar 2016 9:18 am

countrywide

Member Since: 16 Sep 2007
Location: UK
Posts: 6019

2016 Discovery 4 3.0 SDV6 Graphite LE Auto Unknown Colour

At the end of the day it is a basic math calculation. Whatever happens you will pay the same and only the interest rate and/or incentives make a difference.

2nd Mar 2016 9:24 am