Battery Electric Vehicle News / Enjoying the Transportation Revolution

QrizB

Grumpy_chap said:

JKenH said:

As I have mentioned before, though, finance on secondhand cars is much more expensive than on new ones so why not go for the new one?

Radical shock / horror idea - why not just buy the car you can afford without taking any finance?

In my case, I took the calculated risk that the price of my car in my SSISA would do better than the 3.3%APR on the personal loan.
Remind me in three years to check!

JKenH

Interesting article that suggests last year more people were buying with cash than expected, it is thought due to savings having been built up during lockdown. It does suggest though that buyers once in the showroom see attractive finance deals being offered and go for these. Perhaps what buyers intend to spend on a car turns into a deposit on a more expensive one. 

I bought my last Golf on a PCP, having intended to pay cash but the deal offered was so attractive that I couldn’t turn it down. (I had already reserved the car before travelling over 100 miles to the dealer so it wasn’t a case of my being seduced by the shiny motors on display). 

A couple of times dealers have been surprised that I wanted to pay cash including when I bought our current motorhome. I do find it hard to believe that someone would finance a luxury item such as a motorhome.

All good news for EV sales though. 

https://cardealermagazine.co.uk/publish/average-monthly-car-finance-payments-revealed-as-research-reveals-cash-still-popular-among-buyers/218942

Grumpy_chap

JKenH said:

Interesting article that suggests last year more people were buying with cash than expected, it is thought due to savings having been built up during lockdown. It does suggest though that buyers once in the showroom see attractive finance deals being offered and go for these. Perhaps what buyers intend to spend on a car turns into a deposit on a more expensive one. 

I bought my last Golf on a PCP, having intended to pay cash but the deal offered was so attractive that I couldn’t turn it down. 

This comes up fairly regularly in the Motoring forum - the fact that the "incentives" are tied to finance so the cheapest way to purchase is to commit to a PCP and then pay off swiftly to avoid interest (assuming not a zero percent deal).

It means that "cash" purchases are disguised.

It also brings me back to my query up thread about what the criteria are for PCP finance?  To what extent is salary taken into account?

michaels

Just on the finance question, I thought mostly people could chose a company car from a set of choices within a similar monthly price band (company car so company chooses), this would rule out the more expensive choices as even though the cost to the employee might be the same (or less), the cost to the company is much higher (although I think they may also get some tax advantages on EVs).

So the sal sac maths only really works for individuals who run their business as companies.

michaels

New topic:
https://electrek.co/2022/06/01/electric-car-price-war-coming-ford-ceo/
Ford says the 100kwh pack on the mach e cost s18k USD or about 180 per kwh.  This seems to be a lot more than the industry average of $118 at the end of 2021 according to Bloomberg NEV report.

Suppose Nissan are paying £130 for leaf batteries at the pack level, a 42kwh would be cost just over 5k leaving plenty of money in a mid size hatch sold at £27k, more profitable than an ICE nissa pulsar nsold at 14k for sure.

QrizB

michaels said:

Just on the finance question, I thought mostly people could chose a company car from a set of choices within a similar monthly price band ...

I can't speak for anyone else, but my employer lets you pick from a long list on a lease company's website, at a wide range of prices. But they're all EVs, there are no ICE options (I don't know whether hybrids make the list).

CKhalvashi

michaels said:

Just on the finance question, I thought mostly people could chose a company car from a set of choices within a similar monthly price band (company car so company chooses), this would rule out the more expensive choices as even though the cost to the employee might be the same (or less), the cost to the company is much higher (although I think they may also get some tax advantages on EVs).

So the sal sac maths only really works for individuals who run their business as companies.

We pulled a similar scheme in 2020 and won't be bringing it back. At the start of Covid, long term arrangements (3-4 years) of this nature caused huge losses in operational flexibility and stopped things happening that would have been most beneficial to implement without significant upfront cost.

Most smaller companies don't offer this at all and never have.

JKenH

Grumpy_chap said:

JKenH said:

Interesting article that suggests last year more people were buying with cash than expected, it is thought due to savings having been built up during lockdown. It does suggest though that buyers once in the showroom see attractive finance deals being offered and go for these. Perhaps what buyers intend to spend on a car turns into a deposit on a more expensive one. 

I bought my last Golf on a PCP, having intended to pay cash but the deal offered was so attractive that I couldn’t turn it down. 

This comes up fairly regularly in the Motoring forum - the fact that the "incentives" are tied to finance so the cheapest way to purchase is to commit to a PCP and then pay off swiftly to avoid interest (assuming not a zero percent deal).

It means that "cash" purchases are disguised.

It also brings me back to my query up thread about what the criteria are for PCP finance?  To what extent is salary taken into account?

I don’t recall having to declare my income when I took out my PCP. The dealer may have carried out a credit check - I don’t know. A few years back we were making a purchase in a high street store and were invited to take out a store card of some sort to get a discount. At the time I wasn’t drawing a pension (having retired several years before pension age) so when asked about income I said none.  Needless to say the computer couldn’t handle that and the store card was declined. 

1961Nick

Grumpy_chap said:

shinytop said:

For a minute I thought I was having a nightmare where I was on a money saving site where people were discussing spending £900 per month on a £70k car.  Then pinched myself and I realised it was real. 

Look, I get that MSE is about saving money on whatever people want to buy.  And I fully understand the benefits of ss having taken advantage myself.  But come on, £900 pcm or £70k to save some C02 emissions?  Is that really the best bang for your buck?  That sort of money is so, so far off what most people can afford.  Buying these luxury cars isn't going to save the planet.   

I appreciate your sentiment, but lots of people do buy cars such as the E-Class.  They are "middle managers" choosing something with more "prestige" to reflect their "status".  Most of them probably cannot afford the car in all honesty.  That type of car (ICE) is £42k or thereabouts or £500 per month.

I queried the equivalent EQE which is the Mercedes EV version of the E-Class.  That is much more money at £75k, or £900 per month.

@JKenH provided a scenario where the E-Class (£42k / £500 monthly) is much the same as the EQE (£75k / £900 monthly) if SS is available.  The EQE costs a total of around £925 per month.  The E-Class also costs around £900 per month once BIK is considered.  For a difference of £25 per month, the EV is the obvious choice.  In fact, even if the E-Class was not taken through SS, the pre-tax earnings for a higher rate tax payer still need to be not far off at around £850 x 40% tax resulting in about £500 take home.

What this SS scenario does not address is the many people that cannot take advantage of a SS scheme.  
The SS scenario also dodges my question on this around even if people can have the EQE and get the monthlies similar, can individuals borrow £75k instead of £42k?  It is a substantial uplift in debt being carried.

JKenH said:

You can play around with this calculator 

E Class (base model car) net cost to employee £1157 per month on SS

https://comcar.co.uk/taxtools/salarysacrifice/

The website unfortunately doesn’t list the EQE but if you really wanted to treat yourself you could get an EQS for a net cost of £1174 per month

https://comcar.co.uk/taxtools/salarysacrifice/

Now, let me think an E class 200d or an EQS 450 for around the same money. Tough one.

I used the same calculator and arrived at slightly different figures, but the delta was very close as you found.  

The only thing is, it makes little sense to take an E-Class ICE through SS whereas it makes every sense to take a EQE (or EQS) through SS.
So, the true comparison would have to be the EV as company vehicle via SS compared with pre-tax earning required to meet the monthly of the ICE as personal vehicle.
This is also a tax situation that only some can avail themselves of and will bite the remainder of us as the inflated costs will become baked in for vehicles of that type.

My question of how the normal person ("middle manager") that might be buying an E-Class from their own funds makes the stretch to the EQE?

The company also benefits from a 100% first year capital allowance on an EV as well as a substantial saving on employers NI. Zero VED & no servicing costs if it's a Tesla are another bonus.

1961Nick

Grumpy_chap said:

JKenH said:

Interesting article that suggests last year more people were buying with cash than expected, it is thought due to savings having been built up during lockdown. It does suggest though that buyers once in the showroom see attractive finance deals being offered and go for these. Perhaps what buyers intend to spend on a car turns into a deposit on a more expensive one. 

I bought my last Golf on a PCP, having intended to pay cash but the deal offered was so attractive that I couldn’t turn it down. 

This comes up fairly regularly in the Motoring forum - the fact that the "incentives" are tied to finance so the cheapest way to purchase is to commit to a PCP and then pay off swiftly to avoid interest (assuming not a zero percent deal).

It means that "cash" purchases are disguised.

It also brings me back to my query up thread about what the criteria are for PCP finance?  To what extent is salary taken into account?

Upto buying a Tesla last year I've always leased my cars & have never been asked about my income. Finance companies did the usual credit check & that was it.