GFVs have taken a real kicking with Nov 14 price rise

[Chriscav]

Your fixed into the original finance mate.
No need to panic at all. They won't change it. Already had that discussion.

[monkeyhanger]

Your fixed into the original finance mate.
No need to panic at all. They won't change it. Already had that discussion.

Chris: I didn't need the finance (which was going to save me a canny bit every month), but now it seems daft not to take it if the car is truly worth £3k less in 3 years time, effectively making the finance virtually free vs buying outright and seeing a likely p/x price of £16700 instead of expected £19700. Did Mick have any comments on why they've given all the GFVs a kicking?

Looking more likely that getting this R would see me in zero equity at p/x time and potentially walking away at the end of the term. The alternative is paying £2500 more out for a discounted S3 which will come with Nappa seats and specced to an R's equipment level + lane assist and headlight assist, and have it with a GFV around £2k higher than the R.

[Chriscav]

Right I get what your saying now buddy. Apologies. Mick didn't mention why the finance had such huge changes but if you look at it from a slightly different point of view, this change will make it more difficult for people to afford an R therefore potentially reducing the rapidly flooding market. Hopefully helping the value long term.

[JBirchy]

I know when I agreed the deal and placed my order for my GTI just over 12 months ago it was based on a certain monthly figure. If they'd have tried to change that when I collected I would have walked away. I would have thought if you've agreed the deal, then that's that.

All of those GFV's seem low to me though... I'm sure mine is around the £15.5k mark even after 4 yrs... Saying that, list price on mine was £30,540 so at 51% that would make sense.

If you were ordering now on the new GFVs, your GTI as per your signature would be coming up as worth around £14k dead (options retaining about 20% of their cost after 3 years), giving you a GFV of around 45.8% after 3 years. I’m not counting the options though, they’re not representative of the car as a whole. I can’t see how you got a GFV of 51% after 4 years, the GTI and the GTD have never been that high. The basic GTI was around 51% after 3 years on all the finance examples I have seen.

I can’t believe how full of doom and gloom I am over those GFVs on their website after really looking forward to my R. As you can tell, residuals do play a large part of my decision making for a new car.

Hmm you've got me thinking now. I'll check my agreement when I get home tonight and have a look at the figures.

[matchboy]

MH: My GFV after 4 years is £16,500.  I expect it to be worth more than that if I keep it 4 years (unlikely, I'll probably change before that) ie. enough to use as a deposit for my next car.  If you look at the history of the R, R32 & GTI, they always hold their value very well.  I have zero concerns about what the car will be worth once I'm ready to chop it in as VW's of that nature will always be sought after cars on the second hand market 

They've obviously lowered the GFV to stop these cheap lease deals, as that pushes the monthly payment right up.  And that means less R's/GTI's on the road - and that's a good thing for all of us 

[monkeyhanger]

MH: My GFV after 4 years is £16,500.  I expect it to be worth more than that if I keep it 4 years (unlikely, I'll probably change before that) ie. enough to use as a deposit for my next car.  If you look at the history of the R, R32 & GTI, they always hold their value very well.  I have zero concerns about what the car will be worth once I'm ready to chop it in as VW's of that nature will always be sought after cars on the second hand market 

They've obviously lowered the GFV to stop these cheap lease deals, as that pushes the monthly payment right up.  And that means less R's/GTI's on the road - and that's a good thing for all of us 

The one difference with the 7R is that all the others (R32/5, 6R) were extremely rare, not sure how rare the 7R will be when all those leases hit our shores from Jan to April - still rare, but not super-rare. Waiting to hear about a couple of potential S3 deals, mainly that I know the discount is achievable on the S3, but not what they'll offer on the GTD in p/x.

I'm in 2 minds: The R has a nicer overall shape and I don't feel the need to add any spec beyond metallic paint (which will put me on a par with the lease specials), the GFV drop has really knocked my confidence as to worth down the line. The S3 will be a rarer sight, and I like the interior and the front end more, the GFVs haven't slumped. But Audi drivers are stereotypically complete twits.... If the GFVs had only slumped a grand I wouldn't even think about it.

Can't see the likes of me buying cash and then being offered £19600 if the prevailing GFV is only £15700. They could've done it purely to scare away the lease companies, but I can't see there being a 2 tier system of what is offered in p/x - £3k more for private buyers than the leasers disposing of end of lease stock.

[Exonian]

MH: My GFV after 4 years is £16,500.  I expect it to be worth more than that if I keep it 4 years (unlikely, I'll probably change before that) ie. enough to use as a deposit for my next car.  If you look at the history of the R, R32 & GTI, they always hold their value very well.  I have zero concerns about what the car will be worth once I'm ready to chop it in as VW's of that nature will always be sought after cars on the second hand market 

They've obviously lowered the GFV to stop these cheap lease deals, as that pushes the monthly payment right up.  And that means less R's/GTI's on the road - and that's a good thing for all of us 

I think this was always going to happen. VW obviously filling obligations until the bean counters pulled the plug on it - I expect someone looked at the stockpiled bumpers, GTI engines and VAQ diffs sat in a corner of the factory and thought "WTF?" before getting on the blower to someone in a grey suit somewhere which stated a chain reaction. In other words it certainly didn't go unnoticed by VW management that every other car ordered was an R...

[Exonian]

I can't see there being a 2 tier system of what is offered in p/x - £3k more for private buyers than the leasers disposing of end of lease stock.

VW finance underwrote most of the lease deals so I expect a few arses have been kicked and they'll try and hold on to the ex-leasers in the dealer network throwing them into closed auctions or possibly drip feeding them into the dealer network then leaving all the ratty scratched basic spec cars to go to general auction where the car supermarkets will pick them up cheap and knock them out quickly at retail so there will only be a very quick dip in the used prices. It's in VW's interest to keep their halo models prices high on the second hand market as an awful lot are bought by private buyers and if they're getting poor part-ex prices I'm sure BMW etc will be the ones that benefit and VW will be losing the new car sales and the second hand sales too meaning less finance deals.

[monkeyhanger]

Exonian: I'd agree with you about BMW - they've become the fleet car of choice, it seems no-one buys a new one privately any more, not when 47% GFV for their best performers is the norm.

If VW handle the ex-lease cars right and integrate them all (or nearly all) back into the dealership network then at least the network can set the prices. I buy VWs with a mind to residuals as well as liking their cars. I generally expect the cars I choose to retain 55% of RRP and to get 10% discount or close to it. If that wasn't happening i'd be buying a great car that has relatively poor residuals a few years old. If VW decimate part-ex prices they will alienate a fair proportion of their new retail buyers.

[Exonian]

Exonian: I'd agree with you about BMW - they've become the fleet car of choice, it seems no-one buys a new one privately any more, not when 47% GFV for their best performers is the norm.

If VW handle the ex-lease cars right and integrate them all (or nearly all) back into the dealership network then at least the network can set the prices. I buy VWs with a mind to residuals as well as liking their cars. I generally expect the cars I choose to retain 55% of RRP and to get 10% discount or close to it. If that wasn't happening i'd be buying a great car that has relatively poor residuals a few years old. If VW decimate part-ex prices they will alienate a fair proportion of their new retail buyers.

Yes, that was what I was getting at about VW Finance trying to keep the cars within the VW network to keep the prices managed and also keep the finance 'in house' for the second hand buyers. Only the sh!tters will be chucked into general auction, all the others will go to in house VW auctions.

I'm very similar to you, I buy with a view of resale value and have generally bought 'nearly new' before the mk7 GTI to keep depreciation to an absolute minimum. I get no company car allowance or any other help from work so the ££ figures strongly for me. Incidentally although it's mainly % value depreciation which we look at in actual £££ terms supermini hatches like the Clio 16v's and Polo GTI's depreciate less as they cost much less in the first place.
GFV of 50% on a big BMW would still be maybe £25k worth of dead money through depreciation but GFV on a Polo GTI of 40% would be far far far less in actual £££ terms so I also keep an eye on these type hatches too and will be taking a keen interest in the upcoming Polo 1.8 GTI.
So I've been reading your posts on values and costs with much interest over the last few months, just in case you think you've been wasting your efforts!!!
I've basically been sat waiting for the R bubble to burst knowing the knock on effect on my GTI will suffer.