PCP v Lease

[jv]

Magic that's what. As said, leasing totally relies on the future value.

What's a 2 year old, 16k mile, R estate going to be worth? Maybe 60% of list?
What's the likely volume discount against list? 30% perhaps?

Rough figures for easier maths...
2 year 16k mile R estate total lease cost inc all fees:
£6600

33k list price, 30% discount, dealer gets for £23100.

2 years later, car is worth £19800.
Add the £6600 you paid.
Total £26400

Profit on one car lease £3300.

All a bit theoretical plus needs some VAT sprinkling in there somewhere but it's about right.

[Mark V GTD]

It IS cheaper to buy a new R. Drivethedeal can offer just over 12% off which pitches a brand new R from them cheaper than any Mk.7 R available on the VW used website!

Crazy situation - the only people buying used will be the ones who cannot bear the wait for a new one! As I said earlier there is actually one R listing at over 40k out there!

[Exonian]

It IS cheaper to buy a new R. Drivethedeal can offer just over 12% off which pitches a brand new R from them cheaper than any Mk.7 R available on the VW used website!

The brokers will generally be using fleet departments so will have different discounts than retail sales plus different quotas to sell. My GTI was amongst the first orders yet people buying from brokers got theirs ages before I did.
Where the waters get muddy is if you have a part exchange.

[fredgroves]

Magic that's what. As said, leasing totally relies on the future value.

What's a 2 year old, 16k mile, R estate going to be worth? Maybe 60% of list?
What's the likely volume discount against list? 30% perhaps?

Rough figures for easier maths...
2 year 16k mile R estate total lease cost inc all fees:
£6600

33k list price, 30% discount, dealer gets for £23100.

2 years later, car is worth £19800.
Add the £6600 you paid.
Total £26400

Profit on one car lease £3300.

All a bit theoretical plus needs some VAT sprinkling in there somewhere but it's about right.

So, 5% per annum return?

Seems a bit low actually!

If you look at these guys:

http://www.buy2letcars.com/

These are not a huge thing like VWUK, a smallish operation... and then are guranteeing 11% PA return to investors after they have taken their cut too!

I suggest probably VWUK or whoever are making more like 12-13% PA - which is why they want you to lease, because they make more from that than finance.

[jv]

Was just a guess at figures to show why it makes sense. p2p car leasing, interesting concept!

[Exonian]

Considering VWUK buy them straight from the factory and still own the car at the end so can manipulate the resale value I'd say they were on to a very good thing.
If dealers can offer 11% plus discounts and still make money then VWUK must buy the cars in very cheaply, especially with good exchange rates and low interest.
The challenge to them is the gradual erosion of people's perception of actually owning a car. The buying public are slow to change habits but eventually they do especially if suckered in by affordability.
Then once people are suckered in the prices go up...

Not that I'm cynical or anything.

[monkeyhanger]

Magic that's what. As said, leasing totally relies on the future value.

What's a 2 year old, 16k mile, R estate going to be worth? Maybe 60% of list?
What's the likely volume discount against list? 30% perhaps?

Rough figures for easier maths...
2 year 16k mile R estate total lease cost inc all fees:
£6600

33k list price, 30% discount, dealer gets for £23100.

2 years later, car is worth £19800.
Add the £6600 you paid.
Total £26400

Profit on one car lease £3300.

All a bit theoretical plus needs some VAT sprinkling in there somewhere but it's about right.

Seems about right to me, give or take a few % either way. In the quantities they are buying in, perhaps they can take advantage of the strong pound/weak Euro in a way us mere consumers cannot.

[monkeyhanger]

It IS cheaper to buy a new R. Drivethedeal can offer just over 12% off which pitches a brand new R from them cheaper than any Mk.7 R available on the VW used website!

Crazy situation - the only people buying used will be the ones who cannot bear the wait for a new one! As I said earlier there is actually one R listing at over 40k out there!

Give it a while. Right now a 6 month old one is more expensive than a new one can be haggled down to, once there are more used ones about over 1 year old, it will just about be worth someone's while to buy used. I can see a 3 year old R being around the same price as a 2 year old GTD down the line - around £22k retail.

It is for the very reason you cite that I will not consider a nearly new VW when I have the patience to wait for a new one to be built. No way I will pay more for an almost new one than a new one.

[Schuey]

The manufacturer will want volume as higher volume will reduce manufacturing 'unit' costs.

To achieve this they agree discount levels with fleets for high volumes of the whole product line, so in this case it is not just about the R.

However they will throw in some incentives for what would otherwise be a lower volume variant (Due to its £30K+ price tag.) Yes they risk flooding the market but they only need worry about values for the first 2 years or so and this is why there was a significant shift (downwards) in GFV last year for the R.

It is apparent that within the next 12 months we will see cars coming back from lease, the nice stuff will go to franchise, the ones that are 'less than perfect' go to independent retailers.

This is win win for VW as they then resell the car, plus finance/interest charges through franchises & all associated maintenance & service revenue for the new/second owners.

This is a well thought out product life cycle which for me says that a facelift then MK8 will be sooner than expected. Possibly by late 2017 if you use the MK6 lifespan as a guide.

Then it will all start over again for the Golf & it's various guises.