Guaranteed Future Value - PCP - GTD May 2017 - what is yours please.

[ScottyUK]

I purchased my GTD at a similar time to you and started looking for a replacement about 4 months ago thinking that with some equity in the car and long lead times I should have a couple of grand in the bag for part X, but to my horror all the dealers were offering £2k less than the projected value come part X day.

Anyway I spoke with VW and they offered little in the way of explanation other than the GFV could have been raised to lower the monthly payments; thinking about it at the time it was the monthly figure that clinched it for me.

So I was left with a car worth £2k less than finance and like you they suggested I return it and just pay excess mileage.

Is it a coincidence VW are offering £2k incentive against new cars?

Anyway new Golf R ordered through Carwow, saved just over £6k including VW’s £2k, hopefully  it should arrive this week and the old one goes back to VW and will go straight to auction so let them take the hit.

[fredgroves]

Are they offering you CAP value or some arbitrary dealer price?

Have you checked this?

https://www.capconnect.co.uk/ConsumerValues/Ford.aspx

[ScottyUK]

I tried 4 different dealers across 2 brands all came out similar figures.

Interestingly just run an up to date finance request and it stands at £16,608, using your link and taking the middle of the best offers comes out at £14,775, so just under the £2k 

[fredgroves]

Well if CAP is marking it down, then that is a fair chance that at least the dealer is being reasonably straight with you.

I'd guess that the GFV figure was simply one based on people actually wanting a low emissions oil burner back then - and people definitely did. The GTD sold well because it was a lot of car for the money, a reasonably respected marque with good residuals and low running costs.

With both negative press about VW diesels and the government overhauling taxes because of "evil derv nox" its definitely less attractive than it was.

[monkeyhanger]

If you're keeping the car to the end of the PCP, it makes no sense other than to give it back and walk away owning nowt. Then you're in a great position to get a broker deal without the P/X issue getting in the way, or even look for a different marque without the "positive equity p/x" hook that keeps you going back to the VW garage. I expect early R owners are going to be the biggest hit by this - they had GFVs of £18500 at 3 years, and since leasegate, that dropped 3 grand, so they'll be handing them back with presumably no equity and the dealer will be making very little on them if they command a sticker price of £20-21k on the used lot.

[fredgroves]

The only one loosing out on the over the top GFV value is VWFS.

Whoever they out them to won't be paying that much for the car next - either a dealer or at auction.

They've stitched themselves.... but probably they haven't "lost" just their margins are down which in turn was probably internally funded by some marketing budget.

[p3asa]

Like someone has said its swings and roundabouts and works out the same.

In its very simplest form without interest say you bought a car at £20k
After 3 years its GFV was £12k so you would pay the difference of £8k over the 3 years which would be £222 a month

But someone else took the same car out and was given a GFV of £10k so that left a difference of £10k over 3 years which would be £277 a month.

In an ideal world the person paying more per month would roughly get the difference paid between the higher amount and lower amount as equity on the new car so they have both paid the same over the 3 years.

To the OP that must be really annoying that the GFV was high as you could have put some money aside for a deposit on your next car.

[monkeyhanger]

You used to be able to rely on £1500 equity in a VW PCP at the end of term, but that seems to have evaporated since dieselgate. Decent residuals are a big factor for me in choosing a performance VW (as well as them being good cars) - if they start to depreciate like BMWs do now, i'll be expecting BMW sized discounts (24% off RRP) in future.

[jjgreenwood]

Oooooh I see, the the GFV is less than the actual second hand price the garage will pay for it then you get the difference?

eg the GFV is £14k and the dealer's trade in offer is £15k then you get £1k in your pocket?

Do you have to actually fully purchase the car to own the difference or do they just transact that for you? I suppose technical VWFS own the car, not you or the dealership.

Sorry, I was interested to understand this as I'm probably being forced out of my company car scheme early 2017! Its been decades since I've owned a car!

Yup, I could just buy the car if I wanted and then sell it on and pocket the difference.  If a dealer takes it in against a new PCP, they then clear the finance and any difference between the GFV and what they give you, goes to the deposit on the new PCP. 

As I got a very healthy discount when I got this GTD, this should all be helping me, but for some reason it is all upside down.  If someone had a car at a similar age and deal as mine at say £14K GFV, whereas mine is £16K, then I would be able to start asking questions.  My suspicion is still that there was some error, either human or computer which meant the wrong GFV was put on mine, otherwise it just doesnt make sense.  Ofcourse, as I signed upfront to it all, I have pretty much no leg to stand on at the time.

A discount won't affect what happens at the end of a PCP - it will lower the monthly repayments, just like the amount of deposit makes no difference at the end - again it just lowers the payments. The only way a mistake could have been made is if the vehicle is incorrect on your finance documents or if your mileage is incorrect on the documents. If both these are correct then the end figure is also correct so just hand the car back if it isn't worth what is outstanding - that is what PCP is for anyway. The PCP has saved you the additional depreciation and the finance company takes the risk and the hit.

[TurboTrev]

I know there are no guarantees that there will be equity at the end of a PCP, but in my experience dealers do sell them (or did) on the basis that there will be always be equity left over that can be used as a deposit on your next new car.