Electric Vehicle PCP T&Cs

jimbo6977

I was just looking at some rather favourable reviews for the new MG ZS EV, which suggest the consumer would best advised to PCP the model rather than buying outright.

Having always bought outright in the past, I'm a bit wary of PCP and the T&Cs relating to the car's condition when returning it. It seems to me this is especially pertinent for electric cars.

So for instance, what if the battery capacity massively deteriorates over the 4 year PCP, despite being used according to manufacturer's instructions etc? Is the consumer on the hook for a new battery at hand-back?

Thanks for any insight you can offer.

(PS I'm sure there are other places to discuss the merits or otherwise of this and other EV models)

neilmcl

jimbo6977 wrote: »

I was just looking at some rather favourable reviews for the new MG ZS EV, which suggest the consumer would best advised to PCP the model rather than buying outright.

Having always bought outright in the past, I'm a bit wary of PCP and the T&Cs relating to the car's condition when returning it. It seems to me this is especially pertinent for electric cars.

So for instance, what if the battery capacity massively deteriorates over the 4 year PCP, despite being used according to manufacturer's instructions etc? Is the consumer on the hook for a new battery at hand-back?

Thanks for any insight you can offer.

(PS I'm sure there are other places to discuss the merits or otherwise of this and other EV models)

Surely that would come under the standard fair wear & tear guidelines.

jimbo6977

neilmcl wrote: »

Surely that would come under the standard fair wear & tear guidelines.

I'm not at all sure, which is why I'm asking.

Is there a "standard" rate of deterioration?
How can there be given this is an all-new model?

AdrianC

It has a 7yr warranty which includes the battery. So if the battery has deteriorated beyond the PCP Fair Wear & Tear conditions, it's a warranty claim.

The BVRLA Fair Wear & Tear guide doesn't appear to include anything on EV battery capacity, anyway, and you can't be held to terms at the end that didn't apply at the start.

DrEskimo

jimbo6977 wrote: »

which suggest the consumer would best advised to PCP the model rather than buying outright.

Why? What reasons do they give?

Scrapit

Of course you don't have to hand back with a PCP so that may have an effect on how you keep the vehicle.

jimbo6977

Would it be a valid warranty claim? For instance almost all warranties exclude clutches on ICE cars. Do EV warranties include battery function?

The reason for preferring PCP is uncertainty over residuals.

bob_a_builder

Maybe PCP, so you can hand it back before it rusts away

https://www.no-to-mg.co.uk/

DrEskimo

jimbo6977 wrote: »

Would it be a valid warranty claim? For instance almost all warranties exclude clutches on ICE cars. Do EV warranties include battery function?

EV's have warranties specifically for the traction battery. My Zoe has one warranty for the car, which lasts 4yrs, and one for the traction battery, which lasts 8-yrs. It covers if for degradation over 70% and any faults.

MG seem to offer 7-yrs on the traction battery:

https://mg.co.uk/media-centre/press-releases/mg-zs-ev-the-first-truly-affordable-family-friendly-electric-car/#targetText=MG%20is%20also%20proud%20to,and%20the%20lithium%2Dion%20battery.&targetText=ZS%20EV%20majors%20on%20interior,and%20those%20who%20value%20practicality.

jimbo6977 wrote: »

The reason for preferring PCP is uncertainty over residuals.

PCP with high interest charges and low GFV's provide little to no protection over residuals. Look at the numbers:

https://mg.co.uk/offers-finance/mg-zs-ev/mg-zs-ev-pcp-offers/

The GFV is predicted to be just 40%, or £8,743 of the cars value in 4yrs/32k miles. Now add the cost of the PCP in terms of interest to even get the benefit of a GFV, that's £2699.75. The car would have to depreciate to below £6,000, or below 27% of it's discounted price before you got any economic benefit.

For example, let's say it's only worth 30% after just 4yrs/32k miles. A completely catastrophic and frankly unrealistic scenario, as the £22k car is now only worth £6,598. If you bought outright (using PCP initially to get the discount and settle the next day), it would have cost you £21,995 - £6,598 = £15,397.

Let's compare that to the PCP, where you pay £2,838.75 deposit, and then 47 payments of £279 = £15,951.75.

So it's provided no cover whatsoever...even in this catastrophic example, PCP is still more expensive than outright purchase.

jimbo6977

Thanks everyone for the answers so far.

I guess PCP provides cover against catastrophic scenarios like SAIC ceasing to operate in the UK, due to trade wars or other problems. See Proton, Great Wall, Mahindra, Perodua, Daihatsu....

Til now I've bought pre-reg cars outright but EVs are a whole new ball game and while I can see massive fuel savings (my weekly mileage has gone thru the roof recently) I've never shelled out (ie risked) 22k on anything really. And I can't up the budget to a more established brand.

DrEskimo

jimbo6977 wrote: »

Thanks everyone for the answers so far.

I guess PCP provides cover against catastrophic scenarios like SAIC ceasing to operate in the UK, due to trade wars or other problems. See Proton, Great Wall, Mahindra, Perodua, Daihatsu....

Til now I've bought pre-reg cars outright but EVs are a whole new ball game and while I can see massive fuel savings (my weekly mileage has gone thru the roof recently) I've never shelled out (ie risked) 22k on anything really. And I can't up the budget to a more established brand.

Nope, nor me, which is why I don't buy brand new cars :P

I got a used (battery owned) Zoe earlier in the year for much cheaper. Good used EV's are starting to enter the market now. That or you could wait a year or two until this MG comes up used?