Save with "Minimum Part Exchange" trick

steve-L

pgilc1 wrote: »

And therein is the crux of this - I've asked Reg to give us a couple of examples of where these cars are actually priced competitively in the first place, so you're seeing a 'real' saving, but unfortunately he so far has declined to do so.

I'd say the odds of a deal like this appearing that you can make a true saving on is very low.

If it wasn't for car financing I don't see why anyone who can use a calculator ever would buy a new car.

This makes sense in big dealership chains where they have several finance companies vying to give finance and willing to offer different deals/cuts..... It doesn't make much sense to an independent ...

Cornucopia

pgilc1 wrote: »

Thats how manufacturers do it - via PCP and lease deals. They have no particular interest in a guaranteed buy back price otherwise.

But customers do.

lazer

steve-L wrote: »

If it wasn't for car financing I don't see why anyone who can use a calculator ever would buy a new car.

This makes sense in big dealership chains where they have several finance companies vying to give finance and willing to offer different deals/cuts..... It doesn't make much sense to an independent ...

I used to agree and then I went looking for a car to repalce my 10 year old banger.
Looked at used cars first - was looking a Volkswagen Polo, and the new one actually worked not much dearer (even cheaper than some) than the 1-2 year old ones.

The second hand ones all had the extras included, which I did not need or want, and I think they were maybe £500 cheaper tan the new basic car - 3 door, no central locking, no fancy electronics, basic colour etc.

Went to see the new car, discussed prices etc and the finance company were at that stage offering to pay the £1000 deposit if you bought the car on finance - so I did, an 18 month finance scheme, and in effect it was negative interest!

The new car meant any faults were covered by the garage, got a tank of fuel, first years tax paid, free membership of roadside assistance for 3 years etc.

The depreciation on the car was never really a factor for me - as 6 years later, I am still driving it, with no real intention of changing it (except possibly selling it to buy something very similatr in diesal due to increased mileage)

harveybobbles

pgilc1 wrote: »

Thats how manufacturers do it - via PCP and lease deals. They have no particular interest in a guaranteed buy back price otherwise.

I remember years ago Rover did this. Think it was around 1998 onwards..

They'd give you 50% guranateed buy back after 3 years.

No wonder they went tits up.

Cornucopia

My reasoning is this: I once had a Saab 900 Convertible. Very nice car. Also the most expensive car I've ever bought, and the least depreciating one.

Over a year, it depreciated just £1000 off the price I paid for it when it was new, dealer pre-registered. (Or about 5%)

Now... if they were able to guarantee/underwrite that, I would always have bought from them. (Some other car marques I've had have depreciated at ten times that rate). But perhaps I've failed to recognise that car making has fundamental limits to scale and economies of scale, and manufacturers therefore aren't that bothered about loyal private buyers.

Trebor16

Why wait for 30 days to ask for a settlement when you can exercise your right to withdraw from the agreement within 14 days of the date you sign the agreement. That way there are no settlement figures to pay, just interest for the number of days from when you signed to when you settle. I did it in September when BMW were offering a £800 finance contribution on certain motorcycles. It cost me £5.30 in interest so I saved £794.70 on the bike and also another £800 off as the dealer was getting close to the end of the month and the deal meant he would hit his sales target from BMW.

motorguy

Cornucopia wrote: »

My reasoning is this: I once had a Saab 900 Convertible. Very nice car. Also the most expensive car I've ever bought, and the least depreciating one.

Over a year, it depreciated just £1000 off the price I paid for it when it was new, dealer pre-registered. (Or about 5%)

Now... if they were able to guarantee/underwrite that, I would always have bought from them. (Some other car marques I've had have depreciated at ten times that rate). But perhaps I've failed to recognise that car making has fundamental limits to scale and economies of scale, and manufacturers therefore aren't that bothered about loyal private buyers.

Financially it would be ruinous for them. If everyone handed their car back after three years they'd be out a fortune.

And why would one manufacturer take the plunge and 'expose' what they truly value their cars at at three years?

Say you bought a new Insignia at £20K and they said we'll buy it back for £4K in three years, who would ever buy new from them???

Much easier to simply the wrap the depreciation up in a PCP or lease deal whereby the payments become the focus instead of the residual price and even the purchase price.

motorguy

Trebor16 wrote: »

Why wait for 30 days to ask for a settlement when you can exercise your right to withdraw from the agreement within 14 days of the date you sign the agreement. That way there are no settlement figures to pay, just interest for the number of days from when you signed to when you settle. I did it in September when BMW were offering a £800 finance contribution on certain motorcycles. It cost me £5.30 in interest so I saved £794.70 on the bike and also another £800 off as the dealer was getting close to the end of the month and the deal meant he would hit his sales target from BMW.

You're referring to buying new, not used, whereby there is a yardstick to measure against - the price of the new vehicle.

Not so easy when buying used as used prices vary greatly across dealers - not much point in 'saving' £800 when the used car was £1,000 dealer in the first place.

Trebor16

pgilc1 wrote: »

You're referring to buying new, not used, whereby there is a yardstick to measure against - the price of the new vehicle.

Not so easy when buying used as used prices vary greatly across dealers - not much point in 'saving' £800 when the used car was £1,000 dealer in the first place.

Indeed, but I was mainly pointing out that the right to withdrawal is another option to use rather than wait for a settlement figure where you would still have to pay the admin charges that they add on to such agreements. By withdrawing you would not have to pay these fees.

Cornucopia

pgilc1 wrote: »

Financially it would be ruinous for them. If everyone handed their car back after three years they'd be out a fortune.

And why would one manufacturer take the plunge and 'expose' what they truly value their cars at at three years?

Say you bought a new Insignia at £20K and they said we'll buy it back for £4K in three years, who would ever buy new from them???

Effectively, they already do this through leases and PCPs.

My issue is that if it would be ruinous to do it, then presumably it is ruinous to customers that they don't.

Much easier to simply the wrap the depreciation up in a PCP or lease deal whereby the payments become the focus instead of the residual price and even the purchase price.

The problem with that is that the customer is bound to pay interest on the vehicle's residual value - without much choice about how to finance it.