The noisy people’s car…

[Yusee]

That sounds pretty good. I had a 1985 Alfa Sprint..........................

I really liked Alfa’s from that era but never owned one. The Alfa Spirit was a stylish car though IMO. I think I was worried that if I bought an Alfa, there might not be much of it left after 3-4 years of British weather.

I knew someone who had an Alfa Sud and it suffered from rust in some really unexpected places - not just the usual places where many 1970’s/1980’s cars rusted (wheel arch edges, sills, front wings and door bottoms). but the roof and C pillars as well!

To be perfectly honest, stuff broke far quicker than it could rust although that didn't stop me having regular nightmares of getting up in the morning to find it had dissolved! Dynamically though it was a fantastic car, great handling, brilliant engine and the rasp was a treat. The onboard front disc brakes though were an unwelcome quirk, they needed adjusting regularly with a feeler guage as they also acted as the handbrake but getting to them was a right royal pita.

I value dynamics over quality but draw the line at an Alfa Sud. I understand they rusted within weeks of delivery.

[p3asa]

........The second issue for me as a private buyer is depreciation. I've looked at a March 2020 M135i with options to a list of £43.5k with 5500 miles, being sold for £31,500 (before negotiations) that's nearly a 28% devaluation in 5 months. Similarly I've seen a beautiful 320i M-Sport with all the toys (list £44,800), going for £30,750 - that's over 31% depreciation in just 7 months (Feb 2020 car). So whilst I do think a BMW will most certainly be in my future as my next car (when ever that is), it won't be new but a few months old. Sure I might not get the exact spec I'd ideally want, but you save a bucket load of money. Company car drivers obviously have different considerations and most likely wouldn't be considering a M135i anyway but probably a 330e ?

I suppose that's to the extreme though saying a car listing at £43,500k has dropped to £31,500k when the vast majority of folk aren't going to be paying anywhere near that list price.

BMW have £1500 contribution and most dealers I've spoken to are willing to take up to £5000 off on top of that. So straight away that car has £6500 off list.

That seems to be the way most car manufacturers are going, list them high then allow a large discount although BMW and the higher end Audi's seem to be the worst.

[monkeyhanger]

........The second issue for me as a private buyer is depreciation. I've looked at a March 2020 M135i with options to a list of £43.5k with 5500 miles, being sold for £31,500 (before negotiations) that's nearly a 28% devaluation in 5 months. Similarly I've seen a beautiful 320i M-Sport with all the toys (list £44,800), going for £30,750 - that's over 31% depreciation in just 7 months (Feb 2020 car). So whilst I do think a BMW will most certainly be in my future as my next car (when ever that is), it won't be new but a few months old. Sure I might not get the exact spec I'd ideally want, but you save a bucket load of money. Company car drivers obviously have different considerations and most likely wouldn't be considering a M135i anyway but probably a 330e ?

I suppose that's to the extreme though saying a car listing at £43,500k has dropped to £31,500k when the vast majority of folk aren't going to be paying anywhere near that list price.

BMW have £1500 contribution and most dealers I've spoken to are willing to take up to £5000 off on top of that. So straight away that car has £6500 off list.

That seems to be the way most car manufacturers are going, list them high then allow a large discount although BMW and the higher end Audi's seem to be the worst.

Despite the discounts increasing a little and deposit contributions being implemented, the depreciation cost of a performance Golf has mushroomed lately - clearly the market won't bear crazy high residuals to match the crazy high new prices. Prices below relate to 5 door manual Golfs and 3 year old values.

When the MK7 came out only 7 years ago, you could get a GTD for £23k after discount and with a GFV of about £15.3k and an expectation of £16.5-17k in p/x, the car was relatively cheap to PCP, with £2k loss per year in seoreciation plus PCP interest. It was a little worse for the GTI as it was dearer but had lower GFV. When the R came along, you could buy one for as little as £27.5k after discount with Prets and metallic paint and it had £18.5k GFV. P/x expectations were £19-20k if you went for Prets and a decent colour. Even so, expected depreciaion was no higher than £3k a year.

Fast forward to the TCR and it's got a GFV of about £13.5k, giving a p/x expectation of £15-16k so will have lost over £5k a year in depreciation over 3 years.

Of course we've seen steep initial depreciation profiles for BMWs and big German cars (like my recently acquired A4) in general for a while, but you've been able to get 20-25% off RRP for a new one to counter that.

If VW want to stop people chopping in their TCRs for 135s rather than MK8 GTIs, they're going to have tl offer dar deeper discounts than they're doing now.

[Exonian]

It just annoys me that list prices have been hiked up so far that (as per my previous post) you have to be pretty wealthy or have quite a decent company car allowance to pay near list price only to see the vale drop by 50% in two years on fairly desirable models.
It’s not like the discounts are immediately forthcoming to most customers when they walk through the showroom door kitted out in surgical masks.
You either have to be switched on enough to have scoured the internet brokers (and we can’t take it for granted that everyone does that) or a hardcore haggler (which most people aren’t).

I and many many others used to save hard to buy a German car knowing they’d be fairly robustly built with bullet proof strong residuals. It’s reasonably recently this massive discounting to hook everyone into PCP deals for dealer bonuses became prolific. Trouble being with the mass registering of brand new cars it means recent second hand cars which have low mileage and loads of warranty left suddenly become less attractive to buyers because of the much higher interest rates and less dealer financial incentives making them more expensive to buy than new cars and hence retained values are plummeting in relation to original list prices.

For a cash buyer with no part exchange a 9-12 month old hot hatch can seem fantastic value next to the list price of a new car.

I grabbed a price of a reasonably specced M135i on a PCP using the maximum deposit via TRL and the monthlies were under £80 a month! And no, there’s not a figure 1 missing off the front there, I’m pretty sure it wasn’t a typo. Plump for 24 months and you might not even need to service the thing.
No wonder part-ex prices are rubbish!
Save a deposit, pay bugger all a month, hand it back having saved another decent deposit... really, why bother actually owning something?

[monkeyhanger]

It just annoys me that list prices have been hiked up so far that (as per my previous post) you have to be pretty wealthy or have quite a decent company car allowance to pay near list price only to see the vale drop by 50% in two years on fairly desirable models.
It’s not like the discounts are immediately forthcoming to most customers when they walk through the showroom door kitted out in surgical masks.
You either have to be switched on enough to have scoured the internet brokers (and we can’t take it for granted that everyone does that) or a hardcore haggler (which most people aren’t).

I and many many others used to save hard to buy a German car knowing they’d be fairly robustly built with bullet proof strong residuals. It’s reasonably recently this massive discounting to hook everyone into PCP deals for dealer bonuses became prolific. Trouble being with the mass registering of brand new cars it means recent second hand cars which have low mileage and loads of warranty left suddenly become less attractive to buyers because of the much higher interest rates and less dealer financial incentives making them more expensive to buy than new cars and hence retained values are plummeting in relation to original list prices.

For a cash buyer with no part exchange a 9-12 month old hot hatch can seem fantastic value next to the list price of a new car.

I grabbed a price of a reasonably specced M135i on a PCP using the maximum deposit via TRL and the monthlies were under £80 a month! And no, there’s not a figure 1 missing off the front there, I’m pretty sure it wasn’t a typo. Plump for 24 months and you might not even need to service the thing.
No wonder part-ex prices are rubbish!
Save a deposit, pay bugger all a month, hand it back having saved another decent deposit... really, why bother actually owning something?

It seems that the only people savvy enough not to pay list price or close to it for a new car are people on these forums. Only a few weeks ago on the Polo forum, someone had put a deposit down on a 1.0 R-line Polo, having ticked every options box, including the dealership "protection" products and was looking at £500 a month over 4 years, then complaining that he couldn't afford a GTI. There's some seriously naive people out there. I pointed him towards a Polo GTI+ at a broker price (which had 2/3 of his R-Line options as standard). and was going to cost him less than £300 a month.

If prices keep increasing as they are currently and residuals aren't following suit, buying new is going to become a mugs game, buying a year old one for 65-70% of RRP rather than a new one for 85% of RRP. In that respect, buying a VW is going to be like buying a Ford, Vauxhall or any French or Japanese marque - buy new at 25% off list or buy a year old for 35-40% off list then see a sensible depreciation profile thereafter for 2 or 3 years.

I do think that to a certain extent, (apart from having a shiny new car that no-one has farted on the seats - except the dockside workers who deliver it) people who buy new cars do so out of fear that if they buy used and keep it beyond the warranty they'll get a big bill out of warranty because reliability isn't great on modern electronics-laden cars. Even something seemingly small that wouldn't immobilise the car can easily cost £600 when it fails. The German marques are way behind general expectations here, almost everyone except the German marques now offer minimum 5 year warranties - even the hugely unreliable Alfa and Renault.

Whether their customers have as big a battle on their hands to get warranty work approved as plenty here do is something I don't know. Right now though, VW especially in the VAG group seem to be treating customers like sh!te when things go wrong and the dealerships are reluctant to even take on warranty work for fear it won't get authorised.

I do think that buying a new car from a franchised dealership is on its way out and we'll see a bigger switch to leasing new cars (HUKDs is full of posted lease deals) and  then people buying 2 year old cars that the leasing market supplies in the next 10 years.

How big a deposit are you talking to do what you're doing with the Beemer, Exonian? What does it really cost you a month (average) for your deposit +£80 a month over your 24 or 36 months?

Audi also let you do what you're doing with the Beemer. You can put down 50% deposit (inclusive of discounts to get you to 50% of RRP) on a PCP (which effectively covers the depreciation) and your £80 a month is pretty much just covering interest on the other half of the car's worth at the end of the PCP. VW only allow 30% down. You save a lot of PCP interest in doing it that way.

Do you ever really "own" a car anyway? My 2 cars are bought outright and I save the depreciation each month to put back into savings for the next one, but no-one keeps a car forever, and even though they are mine, I probably won't keep either more than 3 years if my financial circumstances don't change. The only scenario I could see me buying a car and running it into the ground is if I was doing a crazy high annual mileage which would leave my 3 year old car pretty undesirable on the used market, so I would keep it until it's done in.

[Sootchucker]

I'd have to agree with a lot of what you have said there Monkeyhanger, especially with regards the German marques falling behind the rest of the industry with respect to the warranties. I think there's still some sort of German arrogance that exists with these manufacturers that people buy them on the respected perception of "German" quality. But where has that gone.

I work (and have done for 30 years) for the same multi billion euro global Engineering and Processing company that happens to be German, with most of our factories in Germany. In 30 years, I've witnessed a marked "relaxation" of build quality and more silly build mistakes creeping in. Gone are the days of German infallibility. Sure on a good day, they are still world class, but on a bad day, very average at best (and certainly no better than our competition - some of whom have their equipment made in the far east at up to 30% cheaper price).

It's about time the German car industry woke up and realised that buyers these day are not only more savvy, but now have the internet and things like YouTube with a myriad of reviews on new cars, which simply weren't available some years ago. The Golf 8 is a classic example. I have 3 friends, who like me have been died in the wool VW fanatics for many (many) years. All of them were looking forward to the release of the MK8 Golf to replace their MK6 and 2 MK7 Golfs (not performance models), and on speaking to them, all of them have 100% discounted the MK8 Golf on the basis of magazine and online video reviews they have watched. That's before they have ever walked into a showroom and seen the car in the metal. 

Reputations can these days be won on lost based on social media and forums such as this, but it seems that VW at least (can't speak for BMW or Merc), seem to completely ignore the feedback they are receiving from such media streams and continue on their merry way.

As an aside, (and only because I was curious), this weekend I enquired with 3 BMW dealers for a price on a new BMW F20 3 Series 320i M-Sport, with a few toys and metallic to bring it to whispering distance of the magic £40k barrier (because I really like the new 3 series). The very best "offer" I had was £3.8k off (no finance contribution on the 3 series from BMW) so 9.5% discount. That worked out to £350 PM (over 36 months) with a whopping £11k deposit and an £18.5k GMFV. Thanks, but no thanks.

[monkeyhanger]

^ You might want to look at Coast2coast cars. Last time I looked at BMW, they were by far the cheapest for broker prices. These car companies do need to be realistic in what people will pay - if a car is going to depreciate 35% in year 1, you need a 25% discount. That £11k deposit is equivalent to £305 a month over your 36 month term, making it a £655pm car ! 

VW seem to be pushing people towards 4 year PCPs to make the cars seem more reasonable - the least they should do is give a 4 year warranty to cover those people who bought a new car throughout the PCP term.

[fredgroves]

Isn't it the same all over though?

People have demanded more sophisticated stuff and its here now but costs a fortune?

Mobile phones for example....

But like mobile phones, if you just want basic functionality, there are options still - its just that marketing has persuaded you that you need that BMW 330 or that Galaxy S20.

You can still buy a cheap phone or a cheap car, just not the ones they advertise heavily.

[monkeyhanger]

Isn't it the same all over though?

People have demanded more sophisticated stuff and its here now but costs a fortune?

Mobile phones for example....

But like mobile phones, if you just want basic functionality, there are options still - its just that marketing has persuaded you that you need that BMW 330 or that Galaxy S20.

You can still buy a cheap phone or a cheap car, just not the ones they advertise heavily.

Is all that electronic gubbins really that expensive though? With the introduction of the virtual cockpit, there is the supposition that a simple TFT screen is much cheaper to produce than the dial instrument array. We have the MK8 Golf coming in with touch screen tech replacing all dials and buttons, in the name of cost saving.

In 11 years the cost (RRP) of a GTI has gone up almost 50%, but how many can say you're getting 50% more car? The standard spec has gone up a little, but not a lot.

[Exonian]

How big a deposit are you talking to do what you're doing with the Beemer, Exonian? What does it really cost you a month (average) for your deposit +£80 a month over your 24 or 36 months?

I hate paying interest on anything so purely asked for the deal I assumed (without doing any sums first) would pay the least interest over the term.
So maximum deposit would be around £12k or £13k cash plus or including(?) dealer and BMW discounts.
This was pricing the car to just under our new favourite figure of £40k (excluding first year car tax) over a 24 month contract.
I’m sure the figures can be juggled around with deposit amount and GFV versus interest paid over the term ranging between 24, 36 or 48 months if a bit of time was spent on the abacus.
Dealer and importer discounts amounted to just over £7k

I’m not sure that’s even the right way of looking at it anymore. I’m looking at it from a previous cash buyer perspective but once you’re in the PCP cycle it all goes out the window. If you’re paying PCP interest on car A but plan on buying car B after 24/36/48 months then you’ll be paying interest on that too, with a balloon payment on that too so maybe it’s better to just forget the headline figures and look solely at what you can afford a month...  which is exactly what the industry wants us to do.

What does it matter anyway, it’s a never ending cycle and I guess many of us are the last of the generation brought up to only buy what you can afford to pay cash for where most of the under 40’s look at it purely as what they can afford a month. The world has moved on, whichever way you pay for it the buyer gets what he/she wants.

Interesting and valid point about 48 month PCP’s there MH.
It started with houses. I bought young but still missed out on the pre-boom early/mid ‘80’s prices most of my slightly colleagues bought at. They bought on 20 year mortgages and got 3 bed semis for less than I bought a flat for and I needed a 25 year mortgage as I was young and broke and had an unreliable mk1 GTI to fix!
My kids now have Help To Buy schemes and 40 year mortgages having been sensible and saved up money as thankfully they have no interest in cars.
That’s how the world has moved on.
The generation just in front of me bought a 3 bed semi as a first house and stayed there until it was paid off, the following generations don’t have that luxury and capitalism has cashed in on it big time.
So long as we get what we want then I guess it doesn’t really matter how it was financed, it’s just about balancing it out and trying not to pay over the odds during the never ending cycle.
Does the “it’s wasted money if it’s not in bricks and mortar” saying even still apply these days? With people paying mortgages into their 70’s nowadays I’m not so sure unless you’re one of the people in the formerly hugely popular BTL fashion with ever expanding portfolios.

Mobile phone contracts are also sneaking up to 36 months I’ve noticed. Reflecting price increases and the fact smart phones are no longer novelty items with sizeable jumps in useable performance hooking people in to change up frequently. Most people seem quite blasé about smart phones now so seem less interested in the latest phones because even four year old ones have useable functionality rather than just tech for tech’s sake. I’m still running wildly out of date phones feeling no inclination to upgrade until I get a car with a wireless charger. The young lads at work don’t seem that bothered about upgrades these days, they’re getting too expensive so their iPhone 8’s with smashed screens seem to soldier on!

Even an up! GTI costs about £17k now so I’m sure speccing an Audi A1 north of £30k is quite easy.
No wonder they’re on 48 month contracts.

The only way broker prices really save you money is if there is no part exchange vehicle. This is why PCP hand backs and leases are so convenient now with the way the market has positioned itself.