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

[Talk-torque]

My post seems to have been lost at the end of page 1, so I am repeating the saliant points.

I traded my GTD last January and broke even on my PCP, after about 2 years (GFV £13,225, settlement £15,319). Given my figures, above, I can see your point. Seeing that your deal was done around the same time as mine (March 2014), it is difficult to imagine why the 2 GFVs should be over £2K different! Hope you manage to negotiate a deal.

So can anyone else, who started a PCP on a GTD around that time, show any figures, so that we can establish a norm?

[fredgroves]

Sounds like the rubbish I got with my endowment mortgage Trev... "paid off and cash to have expensive holidays too"... If only :-(

[dereks]

Cap seem to be valuing my Gti @14800 my settlement ATM is 17200 2.5 years into a 4 year deal. Doubt I'm going to end up with any equity.

Are all these cheap R's causing the fall.

[evo1986]

Unfortunately having any equity at all in early GTI, GTD and R PCP's is highly unlikely. VW finance were hoping for similar GFV's to the much more limited MK6 cars but then they let every man and his dog get one for peanuts on contract hire and it has destroyed the 2nd hand market.

Back in 2013/2014 you could have a GTD on PCP for less than a GT or in some cases a match spec car because the GFV was so ridiculously high. Like someone has said earlier the only person loosing with you having a high GFV is VW finance. You have benefited from a unusually low payment for a car that has lost more than you have paid out for.

Setting your mileage on 5000 miles per year would of also paid a big part in the GFV back then but it doesn't make that much of a difference now.

[karlak]

Thanks Guys or all the responses.  Looks like loads of us at the time were put in the same boat.

I had a call back from VWFS today who basically said "tough" but in a very nice way . Agree with several others here, it is simply very poor Future Values being applies to the car at the start of the PCP.

What was interesting was that VWFS told me that the dealer can manipulate the GFV when the contract is being setup.. I dispute this and was always under the impression this was set by the term and mileage on the agreement.


I am going to head back to the dealers tomorrow if I get time and ask to sit down with a senior manager who can hopefully explain how I have been put in this position, along with what they can do to fix it.  Definitely think leasing is the way to go from now on.

[evo1986]

You have been put in that position because at the time VW finance were offering very high GFV's the only way the retailer can increase the GFV s by shortening the term or as you did set the mileage lower.

We will never see GFV's like those ever again because Volkswagen finance or loosing thousands on every one that was signed up back then. It's actually a very good thing you had such a high GFV because if it was a lot lower you would of paid out more per month for the same car and still had nothing to show for it.

A lot of PCP customer are moving to contract hire now......

[jjgreenwood]

Yup its not so much the cheap deals now but how the market has gone. Historical data is what is used to judge the GMFV. When MK6 was around VW had the 170ps engine which had 139co2. Whilst this was a great car the company car tax brigade didn't like it as much as other cars and preferred to take the Golf GT or BMW 120D. As a result it didn't sell in huge numbers (most cars registered are fleet cars) and therefore commanded very high resale values. Likewise MK6 Golf R was on  its own production line with limited allocation meaning production was less than demand reducing discounts and protecting resale. GTI was also fairly rare due to it's separate allocation and the model turning into edition 35 mid cycle which only lasted a few years - there was plenty of MK5 GTI around at the time but these were still commanding a premium on the used market due to a cycle of price increases that saw the price of GTI  go from £19995 on launch in 2005 to £27000 for the Edition 35 in 2011. VW also kept standard GTI fresh as it increased the price by putting leather into it late cycle.

When predicting GMFV's on MK7 they used the data from this period to work out the % of residual value the MK7 was likely to have. They do this using CAP future and by monitoring the used car market. What has actually happened is limited price increases - perhaps even price decreases when taking into account tactical deposit allowance. Increased production to keep up with the demand for the fleet market who suddenly liked the 184ps diesel with 109co2. All performance golf now part of standard Golf allocation meaning dealers could order as many as they liked and therefore competing on price pushing down the cost of new cars. Also spec increases have kept the car up to date but not added the sort of value that adding in £2000 of leather late cycle tends to do for this kind of product.

So what we see is now the residuals quoted today are lower, in fact the increased deposit contributions on offer now are there to negate the impact of the lower residual for those wanting to change their GTI/GTD/R for another one - essentially they prop up the lower residual value due to the way the market has performed.

Ultimately whilst its hard to predict the future I suspect the next set of Golf's will start to rise in price again. We are coming out of a market where the pound was strong and the market was growing strongly each year. Now the pound is weak and the market if anything is starting to contract volumes are likely to reduce and prices can only go one way. MK7.5 certainly won't be any cheaper and will only be made for 2 years tops, and when MK8 comes out the price will go up as it will be the most modern luxury hatch in the market place. VW didn't hike the Golf's price in November along with all the other cars so the product is overdue its inflationary increase.

Oh and a dealer can manipulate the future value - but only downwards. Why would you want a guarantee at a lower figure? No dealer in their right mind would recommend that as the only person who can lose is the customer. It's worth remembering a GMFV is only high in retrospect, nobody ever complains when there is equity at the end but I've heard plenty complain if they think it's not high enough at the outset and the monthly payment ends up being more than BMW, Mercedes etc etc.

[monkeyhanger]

I haven't seen much manipulation in GFVs for VWs, they seem to be pretty much set at certain duration/mileage combinations.

Have you ever been through negotiations with an Audi Garage though? When buying the missus' A1, went in knowing full well what the Audi website's finance example was for her model/trim/engine of A1, and therefore what the GFV was. Given that I was adding £1500 of optional equipment, I expected to at least match the website quoted GFV.

I was surprised to see that he'd knocked £1400 off that figure to bump up the monthlies, when I asked why, he said it was down to the discount I had negotiated (9% is about all you can expect from an A1). They give with one hand and take it all back with the other to keep the monthlies the same. I asked whether this would mean that I would get offered lower p/x value if I had a lower GFV on the exact same car as someone else, and he implied that I would, without actually saying it. Is it me or do most Audi salespeople have that slimy estate agent vibe about them? When enquiring aabout an S3 in the past and then this A1, I was made to feel like it was a privilege to have an appointment with them.

I took their finance to get the £500 deposit contribution and settled under the cooling off period the next day, so I had the last laugh. 

[Mark V GTD]

Sadly I saw all this coming six months ago and baled out of my GTD (which was also a March 2014 car) by selling privately and went over to leasing on a no deposit basis. Now I have no money tied up in the car , paid no deposit and know exactly how long I will keep it for.

I think PCP will die off as the preferred option for private purchases over the next few years as people see the reality that the companies promises of equity at end of term are just not materialising. Its much better to know that you have to hand the car back at the end of the term and just accept it which is the case with leasing.

I lost a lot of money on that GTD purchase - never again!

[monkeyhanger]

Is it really any worse than it used to be?

I'd gotten used to paying out £400 a month on PCP (after getting that "positive equity" at p/x and a decent discount) for 2 Sciroccos and 2 MK5 Golfs before I had the means to buy outright, and people are paying that now on a bare bones MK7 GTI if they don't get any discount (finance example over 48 months is £6055 deposit + £265 PM ~ £391pm term average inclusive of deposit). The sticker price is higher, but the incentives and discounts are bigger and finance APR % is lower.

Maybe there are some here that have bought a Golf for the first time and thought that £300pm average for a standard spec performance Golf is the norm. As always, going in heavy on options is always going to cost you a lot on your monthlies, but that has always been the case.

I could see myself leasing next time rather than tying up £28k of my own money and putting away £300 a month to cover depreciation.