Peter - yes, this deal is on stock cars (that sounds like
banger racing - you know what I mean!) - the car has to be delivered by 31 March. There are plenty in stock, it seems.
Possibly it's being done because they're slow to shift - but the salesman ws telling me that they've been doing similar deal on the SL and the hugely increased sales countrywide have made it worth their while to reduce MB's and dealers' margins.
|
I think the deals on the SL (which are fantastic btw) are as a result of the iminent facelift, though it doesn't look much different to me... At a guess because the B class is in a new market for MB they are providing dealers with incentives to take market share in this area??
Let us know how you get on with it - I'd be interested in your thoughts, as I think the newer MBs look really nice, and the interiors appear to be a vast improvent on their previous offerings.
Peter
|
|
|
|
Looking at the deal, the MGFV on the Mercedes is about 40 % of list price - as you say BP, this I'm sure helps to keep the monthly payments down, and the low figures (about 25 %) on the Octavia and C-Max made the monthly payments excessive. I'm sure the Octavia and C-Max are very good value cars, but not if you buy on a PCP.
40% doesn't seem excessive. The price deals I mentioned in the US have the residuals set in the high 50's - a colleague there pays $800/mth for an E55 and his wife has a Cayenne at $600/mth (even he was amazed by the Cayenne deal).
|
I'm no financial expert but these 'PCP' plans (what we used to call 'HP' in the old days) always look like an expensive way to buy a car to me.
You pay out monthly and after X-years you need to pay out a large end payment otherwise you don't own a thing. If the car goes back then presumably they crawl all over it looking for damage/blemishes etc??
|
I'm no financial expert but these 'PCP' plans (what we used to call 'HP' in the old days) always look like an expensive way to buy a car to me. You pay out monthly and after X-years you need to pay out a large end payment otherwise you don't own a thing. If the car goes back then presumably they crawl all over it looking for damage/blemishes etc??
That's about the size of it. They are designed to attract buyers with a low monthly payment by deferring a big chunk of the loan to be paid back later, thereby increasing interest charges.
It's just possible that, now and again, a manufacturer will choose to use PCP as the channel for an attractive promotion on the basis that they hope to retain a customer when the car comes back, but most of them are nothing special as far as I can see - you borrow money, you pay for it; and if you later want flexibility that you didn't foresee - like writing it off, keeping it for a longer or shorter period, or doing higher mileage - then you will have to deal with the contractual terms around that. Fine as long a you know what you are doing, but dealers are unlikely to act like independent financial advisers.
Nothing wrong with going into a PCP with your eyes open - just don't appraoch it as a way of saving money.
|
It's just possible that, now and again, a manufacturer will choose to use PCP as the channel for an attractive promotion ...
>>
There is a feeling that MB in particular are using PCP's (and also very attractive contract hire rates) as a way of discounting their vehicles without doing anything so vulgar as dropping the list prices, or making it known that cash discounts are available.
Nothing wrong with going into a PCP with your eyes open - just don't appraoch it as a way of saving money.
For the person who wants a new car every 2/3 yrs (and there are still a lot of people who do) then PCP's can be pretty good deal. The lack of flexibility in the contract is the big disadvantage.
There are discussions on Merc forums that depreciation on the E Class is so heavy that PCP is the way to go. It does feel like you're throwing £500/mth (or whatever) away, but in reality depreciation means your doing the same thing however you fund the car. PCP takes away the residual risk, which has some value.
|
As a simple man I always thought that buying a new car for cash (no, not £50 notes - but from the bank) was always the cheapest way. I don't want to get answers like "you're daft buying new - buy nearly new it's so much better, less depreciation and so on".
All I would like to know is has someone worked out the cost of a cash buy allowing for loss of interest on that dosh in the bank / building society compared with the plethora of loans, private contracts, leases, rentals etc.
|
I have this discussion with my accountant regularly, as I buy my cars for 'cash' and he leases. He leases becuase he does not have the wod of cash to buy a new car every three years, whereas I do, to buy a second hand car every two years.
He says that unless there is a finance deal that is offering a APR of less than say base rate, then paying cash is better. However, an interest free deal or say 2.5% is certainly worthwhile.
--
Espada III - well if you have a family and need a Lamborghini, what else do you drive?
|
|
|
All I would like to know is has someone worked out the cost of a cash buy allowing for loss of interest on that dosh in the bank / building society compared with the plethora of loans, private contracts, leases, rentals etc.
>>
As a general rule, purely arithmetically, for an individual it's cheaper to use your own cash unless you can pay a lower rate of interest on a loan than the return you get on your your own money.
That said, you might still prefer PCP - if the cost difference is small, you might prefer not to disturb your savings, particularly if you might not have the discipline to replace them. As Bill Payer says, you might want to allow some value for limiting the depreciation on a PCP; also you should allow for any penalties for accessing your own money if it is in notice accounts; or you might just not have the cash in hand, but plenty of spare income. I wouldn't say anyone else was necessarily making the wrong decision in using PCP, as long as they understand how it works. As noted by Espada, even some accountants use it!
Maybe MB is expecting to subsidise the guaranteed RV - that could make it worthwhile (if you actually wanted a B class of course).
|
|
|
As a simple man I always thought that buying a new car for cash (no, not £50 notes - but from the bank) was always the cheapest way. I don't want to get answers like "you're daft buying new - buy nearly new it's so much better, less depreciation and so on". All I would like to know is has someone worked out the cost of a cash buy allowing for loss of interest on that dosh in the bank / building society compared with the plethora of loans, private contracts, leases, rentals etc.
You have to be a little bit careful with this because you may be able to get a subsidised deal (exactly as Avant has done) that is only available if taking out the finance deal. So it can be impossible to make a direct comparison.
It's also complicated to compare APR on loans and savings.
I bought a 6 mth old MB from MB Direct and they were a bit amazed that I wanted pay cash for it. They offered me 3.9% flat, but my wife get 4% after tax on 'her' money. Adding in the loan initial and final charges and working out the total cost - there was nothing in it. MB Direct claimed there was nothing in it for them, either, but they seemed devastated that I went for the cash option.
|
|
|
|
|
With the PCP. let's say (for the sake of argument) that one of the kids puts a tear in a seat. Presumably then the dealer will want a payment to sort it out when he takes the car back? Am I correct? How is that handled? I can see it getting stressful and expensive if the dealer gets picky.
|
When a car is on a PCP or contract hire at the end of the contract the lease company will assess the condition of the vehicle, under the BVRLA's guidelines there is a certain element that they will allow for fair wear and tear.
So the odd stop chip, small parking dent, nick in seat will be allowed but any major damage will be charged for. Different lease companies interpret the guidelines to different lengths so what will be fine with one company will be a major charge from another.
These costs are invoiced after the vehicle has been returned. Presumably failure to pay will result in the lease company starting legal proceeding to reclaim the owed amount.
|
|
|
If the damage exceeds that which is acceptable per the agreement (must be defined, and usually references BVRLA guidelines) then you could be hit with charges to rectify damage. Don't forget, even if you'd paid cash for the car you'd still be hit by a lower resale value or trade-in offer on a car with damage, so whether you buy for cash or via PCP it'll cost you in the end...
FWIW, I have used these type of schemes before, and as others have said, if the finance rate is lower than your cost of capital then why not? My personal view is that they are most worthwile on cars with good residuals (= higher final payment and lower monthly payments) and if the interest rate is low, which is what Avant is benefiting from with the B class.
Peter
|
If the damage exceeds that which is acceptable per the agreement (must be defined, and usually references BVRLA guidelines) then you could be hit with charges to rectify damage. Don't forget, even if you'd paid cash for the car you'd still be hit by a lower resale value or trade-in offer on a car with damage, so whether you buy for cash or via PCP it'll cost you in the end...
Believe me, I can get trim/body damaged properly repaired far far cheaper then any MB dealer would charge (trade price smart repair).
This aspect would worry me - I have seen what MB dealers charge for trim repairs. I think the answer would be to call in a 'smart' body/trim man to go over the car before you return it. It'll be a fraction of what MB would charge.
|
Agreed; since that's all they'll do anway. Best to sort out anything too obvious, but I didn't have a problem on either of the cars I bought through this route.
Also, worth remembering that many people do exactly what Avant has done; he's not gone back to the supplying dealer but got a trade in offer from the MB dealer. They'll have based their offer on what they think the car is worth (including any damage) and settled the finance accordingly. It's only really an issue if you see the agreement through to the end and just hand the car back, in which case they might go over it with a fine tooth comb in a last ditch attempt to make as much money out of you as they can!!
Just my thoughts, FWIW
Peter
|
Thought this thread was about the MB B class, but it seems to have mutated into a thread on the many shades and mutations of lavishly subsidised business motoring, something I have not experienced since the mid sixties. Not even then really, just the use of a few well-kept company hacks.
I had no idea what a B class was until today when I walked past one parked next to the nose-to-tail traffic jam in Ladbroke Grove (it's Sunday, and the obstructions look set to last some time in this important West London artery, there being many others in the area to make it difficult to use alternative routes).
It was a B200. All I can say is it was a bit more convincing looking than an A class.
Nothing would ever induce me to buy one, although I suppose I couldn't afford to refuse one as a gift. I don't like that sort of car. It can only be overpriced. And MB quality seems not to be what it was. Apparently Chryslers have the quality now.
|
|
|
|
|
|
