Brand new car with fault

Grumpy_chap

DrEskimo said:

Aren't the high used prices being fuelled by low stock in new cars? Unless the OP can trade it in and obtain a good discount on a new car, without significant delay, then trading in at a high price, just to buy at a high price would seem to not result in anything in terms of net gain?

Yes, and no.

There are still very good deals on new cars if you accept the cars that are available from stock. 

There was a post in another thread recently where someone wrote that they got a good deal on a new Fiat 500.  I also did a comparison in another thread about 2019 Focii listed at <£2k difference between online broker price for brand new Focus of the same specification.  

If the OP can be moderately flexible in the car they have and sell then buy at a sufficiently low "hit", it might be an option worth considering.  If the OP must have the XYZ with options A, B, C and two-tone paint options and specific leather interior and no flexibility then the "swap" option may be less viable.  It certainly seems worth investigating though, and may be the path of least resistance.

Grumpy_chap

Look, here's a daft situation, not sure if the OP could pull off something similar with their KIA:


Toyota RAV 4 Hybrid Design from BroadSpeed = £30k

New Toyota RAV4 RRP OTR £35,025Design SUV VVT-i Hybrid Auto AWD-i

(Configuration: Petrol 2.5L 222PS 5dr 131g/km)Our Price £30,272

https://www.broadspeed.com/CarView/Toyota/RAV4/49596/VVT-i_Hybrid_2.5_222PS_Petrol_Design_Automatic_5_doors

Toyota RAV 4 Hybrid Design used 7k miles 2019 model from Toyota = £33k

2019(69) Toyota RAV-42.5 VVT-i Hybrid Design 5dr CVT

Price £32,995
https://www.curriemotors.co.uk/toyota/used-cars/13163006-toyota-rav-4-2.5-vvt-i-hybrid-design-5dr-cvt/



Go figure?  I can't work it out, I would need Dacia to do that level of complex maths.

DrEskimo

Grumpy_chap said:

Look, here's a daft situation, not sure if the OP could pull off something similar with their KIA:


Toyota RAV 4 Hybrid Design from BroadSpeed = £30k

New Toyota RAV4 RRP OTR £35,025Design SUV VVT-i Hybrid Auto AWD-i

(Configuration: Petrol 2.5L 222PS 5dr 131g/km)Our Price £30,272

https://www.broadspeed.com/CarView/Toyota/RAV4/49596/VVT-i_Hybrid_2.5_222PS_Petrol_Design_Automatic_5_doors

Toyota RAV 4 Hybrid Design used 7k miles 2019 model from Toyota = £33k

2019(69) Toyota RAV-42.5 VVT-i Hybrid Design 5dr CVT

Price £32,995
https://www.curriemotors.co.uk/toyota/used-cars/13163006-toyota-rav-4-2.5-vvt-i-hybrid-design-5dr-cvt/



Go figure?  I can't work it out, I would need Dacia to do that level of complex maths.

This is nothing new though.

Back when I got my Audi S5 brand new I achieved a level of discount that was far lower than many dealers had nearly new cars priced out for on the forecourt. This was back in 2015. Used car prices vary massively. It's why I spent 6months looking for my current Zoe. New were £25k, discounted new were £18k, and 2-yr old used varied anywhere between £22k-£16k. The trick was finding the ones that were at the lower end of the distribution and then stacking other discounts/haggling on top of that.

But whether the OP can achieve a trade in price that is more than the current settlement is neither here nor there. Finance can be tailored anyway you want. In 'normal' times, had someone put a large deposit down and then did the same calculation, they too would find themselves in a position to 'swap out early with no negative equity'. Doesn't mean it's a good idea to do so.

What matters is what price the car was bought for, and what price the car is sold for, and how much (if any) did it cost to borrow in interest. No point changing to a new car if the current car will see lower depreciation and lower interest costs over the next X years relative to a new car, regardless of whether they can change without making additional payments to settle in full.

Now if the current trade in prices, and discounted new prices make that equation stack up, then go for it. Being in a position of settling the finance is not in itself an indicator that it is a good idea though.

Of course the OP has to weigh up the fault into this equation as well, but has to be aware that this extends the payments by another year...

BOWFER

DrEskimo said:

This is nothing new though.

Back when I got my Audi S5 brand new I achieved a level of discount that was far lower than many dealers had nearly new cars priced out for on the forecourt. This was back in 2015. Used car prices vary massively. It's why I spent 6months looking for my current Zoe. New were £25k, discounted new were £18k, and 2-yr old used varied anywhere between £22k-£16k. The trick was finding the ones that were at the lower end of the distribution and then stacking other discounts/haggling on top of that.

But whether the OP can achieve a trade in price that is more than the current settlement is neither here nor there. Finance can be tailored anyway you want. In 'normal' times, had someone put a large deposit down and then did the same calculation, they too would find themselves in a position to 'swap out early with no negative equity'. Doesn't mean it's a good idea to do so.

What matters is what price the car was bought for, and what price the car is sold for, and how much (if any) did it cost to borrow in interest. No point changing to a new car if the current car will see lower depreciation and lower interest costs over the next X years relative to a new car, regardless of whether they can change without making additional payments to settle in full.

Now if the current trade in prices, and discounted new prices make that equation stack up, then go for it. Being in a position of settling the finance is not in itself an indicator that it is a good idea though.

Of course the OP has to weigh up the fault into this equation as well, but has to be aware that this extends the payments by another year...

I don't see the relevance of any of this if the OP's car is giving them stress.
Which it obviously is when they're considering the messy (at this late stage) option of rejection.
Who cares if it's a financially astute decision when it's a lemon and giving you grief?
There are other costs to a faulty car other than financial.

born_again

Catslovelycats said:

Can anyone give me some advice please?
I have a Kia (bought brand new in October 2020) which has an ongoing intermittent fault with central locking (and various other oddities that seem linked). The dealership have seen the fault as I've been able to drive the car to them 3 times when the fault was happening. Each time they have failed to fix it. It seems to reset itself overnight. The car has been at the garage now since Thursday but the fault isn't happening and so they say they can't fix it. They do not know what is causing the issues.
Can I stop paying for the car and return it to them? I know it's a bit drastic, but I've really had enough now and just want rid of it. I don't know what else I can do. I don't want to keep driving around in a car that is faulty and depreciating. I've contacted 'customer services' but have no idea how helpful that will be.
Thanks for any advice.

You can't stop paying for it. That is just going to kill your credit history. With non payment of a loan.

What you are looking at here is a possible S75 (A) depending on the cost of the car. With Kia Finance.

Grumpy_chap

I am not sure my comments about swapping the car outside the Kia dealer processing the warranty / rejection have been entirely take the way I intended.

DrEskimo said:

But whether the OP can achieve a trade in price that is more than the current settlement is neither here nor there.  Doesn't mean it's a good idea to do so.

What matters is what price the car was bought for, and what price the car is sold for, and how much (if any) did it cost to borrow in interest.

Being in a position of settling the finance is not in itself an indicator that it is a good idea though.

Of course the OP has to weigh up the fault into this equation as well, but has to be aware that this extends the payments by another year...

BOWFER said:

Which it obviously is when they're considering the messy (at this late stage) option of rejection.
Who cares if it's a financially astute decision when it's a lemon and giving you grief?
There are other costs to a faulty car other than financial.

You are both correct, though I suggest for most people they need to make it work in a financially pragmatic way as well.

What I was trying to get at is that the OP purchased a brand new car so will have expected to incur a substantial cost for depreciation in the first few years.  Call it £X.

There is a fault and the OP is seeking a (late) rejection of the car.  This will require some effort and "convincing" the Dealer / Manufacturer to support the process.  In this process, the OP will need to meet a cost representing the beneficial use that the OP has received from having the use of the car for a year.  Likely not massively different from £X and any reduction against £X is really the Dealer sharing some goodwill.  It will likely be tied to the replacement vehicle also being a similar Kia.  

What I was suggesting was that, given the unusual strength of used cars, the OP may be able to order another new car and, separately, sell the old car to not only clear the finance but also incur a penalty not much different from the £X that would have been incurred in any case.

I don't think the OP has said what Kia they have, so I'll run some "example" figures based on the Rav4 I linked above.

• List price £35k
• 15% discount
• Buy for £30k

• Depreciation over first year 20% = £6k

If the OP can trade sell that car for >£24k, they are no worse (or even better off) than if the car had been "good" and they simply kept it.

Now, there are details that finesse the above around the value to the OP of not being stuck with the car they don't like and the penalty that they'll incur that first-year loss again.

BUT, in these strange times we find ourselves in, the figures *could* work such that sell and start again is an appropriate route and avoids all the stress of resolving the issue through the original Dealer.  The OP may not think that is correct and may feel that Kia should be made to sort this, but pragmatism may overrule that.

DrEskimo

Grumpy_chap said:

I am not sure my comments about swapping the car outside the Kia dealer processing the warranty / rejection have been entirely take the way I intended.

DrEskimo said:

But whether the OP can achieve a trade in price that is more than the current settlement is neither here nor there.  Doesn't mean it's a good idea to do so.

What matters is what price the car was bought for, and what price the car is sold for, and how much (if any) did it cost to borrow in interest.

Being in a position of settling the finance is not in itself an indicator that it is a good idea though.

Of course the OP has to weigh up the fault into this equation as well, but has to be aware that this extends the payments by another year...

BOWFER said:

Which it obviously is when they're considering the messy (at this late stage) option of rejection.
Who cares if it's a financially astute decision when it's a lemon and giving you grief?
There are other costs to a faulty car other than financial.

You are both correct, though I suggest for most people they need to make it work in a financially pragmatic way as well.

What I was trying to get at is that the OP purchased a brand new car so will have expected to incur a substantial cost for depreciation in the first few years.  Call it £X.

There is a fault and the OP is seeking a (late) rejection of the car.  This will require some effort and "convincing" the Dealer / Manufacturer to support the process.  In this process, the OP will need to meet a cost representing the beneficial use that the OP has received from having the use of the car for a year.  Likely not massively different from £X and any reduction against £X is really the Dealer sharing some goodwill.  It will likely be tied to the replacement vehicle also being a similar Kia.  

What I was suggesting was that, given the unusual strength of used cars, the OP may be able to order another new car and, separately, sell the old car to not only clear the finance but also incur a penalty not much different from the £X that would have been incurred in any case.

I don't think the OP has said what Kia they have, so I'll run some "example" figures based on the Rav4 I linked above.

• List price £35k
• 15% discount
• Buy for £30k

• Depreciation over first year 20% = £6k

If the OP can trade sell that car for >£24k, they are no worse (or even better off) than if the car had been "good" and they simply kept it.

Now, there are details that finesse the above around the value to the OP of not being stuck with the car they don't like and the penalty that they'll incur that first-year loss again.

BUT, in these strange times we find ourselves in, the figures *could* work such that sell and start again is an appropriate route and avoids all the stress of resolving the issue through the original Dealer.  The OP may not think that is correct and may feel that Kia should be made to sort this, but pragmatism may overrule that.

Yea I agree entirely.

My point was simply ensuring that you get an accurate representation of what that cost is. I agree with BOWFER that financial cost isn't everything, but it is still a significant component.

Knowing the true cost to change and what the replacement will cost is crucial to making an informed decision about what way the OP takes this.

Jenni_D

Goudy said:

Does your Kia have an ignition key rather than a start button?

If so, there has been lots of problems with the "key in" switch inside the ignition barrel sticking on lots of Kia's.

The switch sticks so the car thinks the key is still in the barrel, this means the remote central locking fob won't lock the car.

There's a few fixes, one involves removing the barrel and lubing up the switch with PTFE spray.

Bumping this post in case the OP missed it. Does this describe your situation @Catslovelycats?

Catslovelycats

Wow. Thank you so much for all your replies.
update: the dealership have agreed to replace the car. They will cover the £10053 I owe on finance and give me £3000 for my defective car. I need to pay £500 deposit in order to qualify for 0% finance.
so they are offering me a new car (which will come in 10-12 weeks as they don’t have any) I start paying for another year as I’m paying a new contract from scratch. It will effectively cost me almost £2500 more than my current finance agreement by the end of paying for it. 

do people think I should accept? Or rather, it is probably a better question to ask is it a fair offer? I’m being advised to insist that I’m not out of pocket.

I am not averse to getting a different car from elsewhere. It’s more a question of whether I want to spend the time doing that and whether I’d realistically get a better deal on it than £13053 that they are offering.

I have looked on Autotrader and Kia’s website. Used cars like mine are selling at £11-12 grand.

Catslovelycats

Thanks, Gouda. I have the start/stop button.