Paying off PCP in one go

fred990

myoung48 wrote: »

Thanks everyone, I hadn't considered that the balloon payment was financed too but in hindsight that makes sense.

Is it possible to settle the entirety of the PCP contract on day 2 of the agreement, including the balloon payment? Really what I'm trying to do here is realise the lower price offered on PCP due to the "deposit contribution" but to effectively pay cash.

Better still look at carwow and get your dealer to match or beat? Cash is king especially if you get them at the right time. Tell them you're not interested if you get the hard sell. I've just saved a fortune on a new Alfa this way, none of their contributions and stuff came close!

myoung48

DrEskimo wrote: »

Absolutely. You can can settle the loan at any time. I bought a used Zoe and got it on PCP to get £1,000 deposit contribution and 2 free services, then settled in full.



So the Dynamique trim is fine, just be aware you don't get reversing camera or heated seats. I don't like the beige trim on the Signature, although I think they changed that on the new S trim?

The R110 is fine, They used to have a Q90 motor that had quick charging (43kW), but to be honest, the real world benefit was minor (about 15mins faster 20-80%) as the peak charge rate can only be achieved over certain State of Charge % (typically 5-60%) and at optimal battery temperatures (20°C).

With regards to battery lease vs battery owned, I have been over the numbers time and again and the lease model is a false economy. Whilst it may be £6k more to purchase, the battery owned model holds it's value well, and so is typically worth about £4-5k more than a battery lease model at the same relative age/mileage/trim. As such, it's not the cost differential at purchase that is important, it's the depreciation cost difference. So if the cost difference is only around £2k, even on the cheapest battery lease at £59 over just a few years, the battery owned model will cost similar/less.

Fundamentally, the lease model punishes you for driving more, and keeping the car longer. It's the same reason I dislike PCP/PCH. The battery owned model gets cheaper the longer you keep it/more you drive it. It's also easy to trade/sell as some dealers won't accept the lease as they have to pay it after 3months, and private buyers have to pass a credit check from RCI.

The problem I had was I didn't want to spend £20k on a Zoe...! So I went used. I got a 66-plate 41kWh R90 (slightly less power than the R110 at the 30-60MPH), with just 5,000miles for £14,500. Unfortunately prices have already gone up, and the PCP contribution on used has been cut to £500, but you can get one for about £15,500 now.

I got it from Masters of Beckenham, and after searching for months (even going to car auctions), this was the cheapest and the dealer knew the models well...I had so many that had no idea about lease vs owned, 22kWh vs 41kWh...etc etc...

You get 4yrs on the car warranty at this age, and 8yrs on the battery. So if you extend the warranty on the car from years 4-8 for £289 per year, you can own this used Zoe for 6yrs, and be under full warranty for that time for just an extra £1,156.

That would be my advice :money:

Thank you for the advice. I'd dismissed the "i" models as it takes way too long to "pay off" the price difference. But you're right, it's the depreciation (plus the saving due to not leasing the battery) that is the correct way to think about it.

One thing I struggle with is getting a reliable estimate of the likely second hand value for the battery owned versions. For the leased versions there's enough 3 year zoes for sale second hand that there's good data on the second hand cost. I can only find 1 second hand zoe with the battery owned in the 3 year age range and am a bit hesitant to take 1 data point as representative.

neilmcl

fred990 wrote: »

Better still look at carwow and get your dealer to match or beat? Cash is king especially if you get them at the right time. Tell them you're not interested if you get the hard sell. I've just saved a fortune on a new Alfa this way, none of their contributions and stuff came close!

I don't agree with this at all when it comes to car buying. Long gone are the days when you'd get preferential treatment or better deals for being a cash buyer.

giraffe69

Is it possible to settle the entirety of the PCP contract on day 2 of the agreement, including the balloon payment?

Yes. Just done it.

DrEskimo

myoung48 wrote: »

Thank you for the advice. I'd dismissed the "i" models as it takes way too long to "pay off" the price difference. But you're right, it's the depreciation (plus the saving due to not leasing the battery) that is the correct way to think about it.

One thing I struggle with is getting a reliable estimate of the likely second hand value for the battery owned versions. For the leased versions there's enough 3 year zoes for sale second hand that there's good data on the second hand cost. I can only find 1 second hand zoe with the battery owned in the 3 year age range and am a bit hesitant to take 1 data point as representative.

So the 41kWh models only came out in 2017. I think the first lot were Jan2017 (so a 66-plate). Might have been December2016, not sure.

So any 3-yr old model will be a 22kWh model, and battery owned versions of those are very rare. The price of the battery owned 22kWh was much lower. I don't know what the RRP was, but I found a post from a dealer over in Morecombe on another EV forum I am on (SpeakEV) back in 2015 where he was offering brand new battery owned 22kWh model for £12,500. A couple of 65-plate battery owned 22kWh have popped up in the last couple of weeks (been months since I've seen one) and they are priced at ~£11k. Quite astonishing to think you could probably sell a £12.5k brand new car over 3yrs later for about £10k.....

However, many would say not to gauge residual prices of battery owned 41kWh models using 22kWh models, as the 41kWh battery owned are not nearly as rare. The extended 8-yr warranty and increase in battery lease costs made them more viable, but the cheaper 'monthly cost' of the lease models still made them much more popular given how many finance new cars (IMHO, they purposely lowered the GFV of the battery owned to make the monthly cost of the lease model more cost effective, as over the long run they could make more money off the lease models, but that's just my take...!).

Despite this, over the last 6months I have never seen a battery owned 41kWh Zoe priced lower than £15k. Mine was the lowest I've seen at £15,800 (haggled down to £15,500, then lowered to £14,500 using PCP contribution). Even at auction there were 17-plate battery owned models with 15k miles and dents in the bumper going for £16,800 (+fees). Prices of used models are actually going up, as discounts on brand new keep increasing. At launch, you could get a brand new one for £16k. Back in November I had thought of ordering a new one and was offered one for £17,500. As you say, today they are about £20k. This is being reflected in used prices, with the same dealer pricing the same used car as the one I bought in Feb for over £1k more today. As it happens, I could trade my car in tomorrow for about £15k...!

So whilst it is always hard to judge used prices in X years time, there is strong evidence that these cars will not depreciate loads. The introduction of the new generation Zoe with CCS 50kW charging and a 50kWh battery may cause a massive drop in prices, but I personally think that these will be priced much higher than the current model (probably around £25k with little discount), and as such, the 41kWh still provides a great budget EV at over £10k cheaper used. So even assuming a price of around £10k in 3/4yrs time, you are looking at manageable depreciation levels, paired with lower running costs. Besides, any drop in the prices due to new models will affect both lease and owned 41kWh the same. So again, if the depreciation costs are the same, then any monthly lease cost will be additional cost over and above what the battery owned model would have cost you.

The relative rarity of the battery owned models will also help as it seems that supply is always being outstripped by demand. On the whole, people don't want the faff of the battery lease, and it makes little sense when you are trying to argue for reduced running costs to slap on a monthly fee that is similar to the cost of fuel!

fred990

neilmcl wrote: »

I don't agree with this at all when it comes to car buying. Long gone are the days when you'd get preferential treatment or better deals for being a cash buyer.

Cool. I'm glad the (multi million pound turnover) manufacturer approved main dealer that gave me my cash deal doesn't know as much as you! Hope they don't catch on....funny.... :rotfl:

neilmcl

fred990 wrote: »

Cool. I'm glad the (multi million pound turnover) manufacturer approved main dealer that gave me my cash deal doesn't know as much as you! Hope they don't catch on....funny.... :rotfl:

I never said you wouldn't get a deal but I bet you'd have got a better one had you taken out finance. It's been a long time since cash has been king.

myoung48

DrEskimo wrote: »

So the 41kWh models only came out in 2017. I think the first lot were Jan2017 (so a 66-plate). Might have been December2016, not sure.

So any 3-yr old model will be a 22kWh model, and battery owned versions of those are very rare. The price of the battery owned 22kWh was much lower. I don't know what the RRP was, but I found a post from a dealer over in Morecombe on another EV forum I am on (SpeakEV) back in 2015 where he was offering brand new battery owned 22kWh model for £12,500. A couple of 65-plate battery owned 22kWh have popped up in the last couple of weeks (been months since I've seen one) and they are priced at ~£11k. Quite astonishing to think you could probably sell a £12.5k brand new car over 3yrs later for about £10k.....

However, many would say not to gauge residual prices of battery owned 41kWh models using 22kWh models, as the 41kWh battery owned are not nearly as rare. The extended 8-yr warranty and increase in battery lease costs made them more viable, but the cheaper 'monthly cost' of the lease models still made them much more popular given how many finance new cars (IMHO, they purposely lowered the GFV of the battery owned to make the monthly cost of the lease model more cost effective, as over the long run they could make more money off the lease models, but that's just my take...!).

Despite this, over the last 6months I have never seen a battery owned 41kWh Zoe priced lower than £15k. Mine was the lowest I've seen at £15,800 (haggled down to £15,500, then lowered to £14,500 using PCP contribution). Even at auction there were 17-plate battery owned models with 15k miles and dents in the bumper going for £16,800 (+fees). Prices of used models are actually going up, as discounts on brand new keep increasing. At launch, you could get a brand new one for £16k. Back in November I had thought of ordering a new one and was offered one for £17,500. As you say, today they are about £20k. This is being reflected in used prices, with the same dealer pricing the same used car as the one I bought in Feb for over £1k more today. As it happens, I could trade my car in tomorrow for about £15k...!

So whilst it is always hard to judge used prices in X years time, there is strong evidence that these cars will not depreciate loads. The introduction of the new generation Zoe with CCS 50kW charging and a 50kWh battery may cause a massive drop in prices, but I personally think that these will be priced much higher than the current model (probably around £25k with little discount), and as such, the 41kWh still provides a great budget EV at over £10k cheaper used. So even assuming a price of around £10k in 3/4yrs time, you are looking at manageable depreciation levels, paired with lower running costs. Besides, any drop in the prices due to new models will affect both lease and owned 41kWh the same. So again, if the depreciation costs are the same, then any monthly lease cost will be additional cost over and above what the battery owned model would have cost you.

The relative rarity of the battery owned models will also help as it seems that supply is always being outstripped by demand. On the whole, people don't want the faff of the battery lease, and it makes little sense when you are trying to argue for reduced running costs to slap on a monthly fee that is similar to the cost of fuel!

Thanks this is very useful. I'm a bit nervous about spending £20k on a Zoe, particularly as a read they're announcing a new model in the next few months. But I'm actively looking into used battery owned versions, which might be a good middle ground.

DrEskimo

myoung48 wrote: »

Thanks this is very useful. I'm a bit nervous about spending £20k on a Zoe, particularly as a read they're announcing a new model in the next few months. But I'm actively looking into used battery owned versions, which might be a good middle ground.

I certainly wouldn't buy a new one for that money.

£15k on a used model was my limit. I managed to get just under that with my purchase, although I suspect you are probably looking at around £16k now.

It depends how active you are willing to be on your search, and how long you are willing to wait!

I managed to grab a 2016 i-model 22kWh for my mother-in-law that had just 80miles on the odometer for £8k from one of those car supermarkets....they currently sell for over £12k! So you can get lucky!