[supersebbo]

Hi all,

I have a privately financed December 2021 iX3 Prem Pro on BMW PCP which is 2 years (25 months to be precise) into a 4 year finanance agreement. I have just been offered to get the same vehicle on my company's car scheme, so want to trade in the privately owned iX3 and save myself about £300 a month.

I must say I'm pretty shocked. The best price I can get for my current iX3 is £30,700 - which is about 45% it's original value and a good £16k less than the finance outstanding. At this rate, the value of the vehicle after the 48 month term will be well under the 'final payment' value - meaning it would be a hand-back to BMW.

Do these models have a bad residual value? I've done PCPs for the last 15 odd years and never been this far off the depreciation curve with any other model - in fact was offered early trade-in on my last petrol X3.

Unfortunately it seems I'm trapped in this car for the next 23 months as even the BIK tax saving won't come close to making up for the £16k shortfall to return it early.

[GDEvans]

I think all EVs have low residuals at the moment. BMW currently have 2 year old Premier Pros for £37k-40k. But obviously this is the sale price - not the trade in.

What Car value a 2 year old iX3 with 20k miles as follows:

Private Sale: £29.5k / £29.9k / £33.1k (Poor / Average / Excellent)
Trade In: £29.5k / £30.8k / £32.1k

So £30.7k sounds a little low.

Does your company offer a cash alternative in lieu of a company car, which should cover your monthly payments for the next two years? You could then opt back into the company car scheme - the new iX3 will be available then.

[supersebbo]

They do offer cash alternative, but this is taxed as regular pay (40%+) so it is far less preferable to the company car at 0% BIK. Seems my only option however.

[supersebbo]

The shocking thing is, my 'final payment' or 'GMFV' as they used to call it at 48 months is £30,100. The current market value is £30,700 and we're only half way through the agreement. If the trend continues I suspect the market value will fall to around £22K after the full 4 years - which in itself is pretty eye-watering for a £65k SUV. But also means I will definitely be handing it back which will incure BMW Finance a loss of around £8k.
Good for me in the long-run I guess, but clearly not what BMW expected when I bought it.
Perhaps there is some sort of corrective swing happening due to the very high prices of pre-owned vehicles during Covid, but it's hard to see how it could hold it's current value for another 24 months.

[keninuk]

Originally Posted by supersebbo

The shocking thing is, my 'final payment' or 'GMFV' as they used to call it at 48 months is £30,100. The current market value is £30,700 and we're only half way through the agreement. If the trend continues I suspect the market value will fall to around £22K after the full 4 years - which in itself is pretty eye-watering for a £65k SUV. But also means I will definitely be handing it back which will incure BMW Finance a loss of around £8k.
Good for me in the long-run I guess, but clearly not what BMW expected when I bought it.
Perhaps there is some sort of corrective swing happening due to the very high prices of pre-owned vehicles during Covid, but it's hard to see how it could hold it's current value for another 24 months.

On my M Sport Pro I took out a 3yr PCP at 2.9% APR in March 2022 and paid the October 2022 price of £62,730. The GMFV is £33,279.

I have been keeping a regular eye on the market values using free valuations from hpi.co.uk. Valuations are one thing but the vehicle is only worth what someone is prepared to pay for it and at the moment there seems to be a reluctance from dealers to pay top $ for used stock.

Given your current situation it does look as though you will need to keep the vehicle until the end of the term and depending on whether your next vehicle is through your dealer you may or may not have to hand it back as they may do something to get hold of the vehicle if they can still make a profit margin on it and keep/gain a customer and save you the checks on a hand back.

Interestingly the future valuations for 2025/6/7/8 went up this month but the current value went down by £1,600.

I put a big deposit down and only pay £250 per month but my equity has almost been eroded at the current valuations. I still expect to buy my car next year as I plan to keep it another 1-2 years maybe longer depending on when I decide there is something suitable to replace it. Also it won't cost me £600 a year to tax it from March 2026 after the changes due in April 2025.

I guess any of us that have a PCP and are thinking of buying outright need to keep an eye on values near to the end of our agreements and may need to make a financial decision to work out whether it is viable to pay more than the trade-in value. Technically you do that every time you buy a used car except in this case you are buying from yourself if that makes sense.

In your case you are not interested in purchasing the car as you have a company car scheme that unfortunately you cannot reasonably take advantage of at the moment. At least you are happy with your iX3 and would be driving one either way.

[GDEvans]

Originally Posted by supersebbo

The shocking thing is, my 'final payment' or 'GMFV' as they used to call it at 48 months is £30,100. The current market value is £30,700 and we're only half way through the agreement. If the trend continues I suspect the market value will fall to around £22K after the full 4 years - which in itself is pretty eye-watering for a £65k SUV. But also means I will definitely be handing it back which will incure BMW Finance a loss of around £8k.
Good for me in the long-run I guess, but clearly not what BMW expected when I bought it.
Perhaps there is some sort of corrective swing happening due to the very high prices of pre-owned vehicles during Covid, but it's hard to see how it could hold it's current value for another 24 months.

That is a scarily low price after 4 years. Mine is a company car on a four year lease (from Nov 2020). I was going to suggest to my dad that he bought it at the end of the lease - his Audi Q5 will be six years old by then - but was concerned it might be quite expensive. This is good news for him - he would certainly be able to afford circa £22k!!

[silent ninja]

Anyone who got on a salary sacrifice scheme and 0% BIK prior to the last year has played a blinder:

- valuations for EVs were much higher which translated to lower payments for buyers
- insurance has rocketed since then but the cost can't be passed on to buyers

So , as as the cars are effectively bought on a lease, the finance /lease company are paying out their noses to plug these shortfalls.


In the meantime I'm enjoying the heck of of this car and it's wonderful defrosting every morning. I will probably buy the new model in 2 years, but more likely it will be unaffordably expensive (probably around £75-85k given inflation for similar features), so right now I'm in 'bury head in sand and enjoy car' moment.

[Supa Koopa]

Originally Posted by silent ninja

Anyone who got on a salary sacrifice scheme and 0% BIK prior to the last year has played a blinder:

- valuations for EVs were much higher which translated to lower payments for buyers
- insurance has rocketed since then but the cost can't be passed on to buyers

So , as as the cars are effectively bought on a lease, the finance /lease company are paying out their noses to plug these shortfalls.


In the meantime I'm enjoying the heck of of this car and it's wonderful defrosting every morning. I will probably buy the new model in 2 years, but more likely it will be unaffordably expensive (probably around £75-85k given inflation for similar features), so right now I'm in 'bury head in sand and enjoy car' moment.

Have to agree that even though my range and miles per charge are absolutely atrocious at the moment, it is very nice going out to a nice warm car. Do you have any space for me in your sand pit?

[hollpe]

Just looking at the BMW Approved used website and regular X3's (2.0i & d's) are, in some cases, more expensive than a newer iX3 that has considerably more spec!

At this rate my iX3 is likely to be worth less than £20k (approx £10k less than it's GFMV), when my PCP finishes in a couple of years time. So BMW will have to suck up that depreciation up when I hand it back. The pricing of the new iX3 is going to be interesting as it's likely to be a fair bit more expensive than the current model.

I really like the iX3, it's been a great car so far. However, I may look elsewhere when the time comes, as there is a lot of competition in the EV space now and the price war between Musk and Chinese is hotting up! As silent ninja says £75-£85k would make it unaffordably expensive. In the meantime I'll join you guys in the sandpit

[ThreeXi]

Hello,

My PCP contract doesn’t expire for a couple more years yet, but it got me thinking, is this situation something that can be taken advantage of if I wanted to buy the car outright at the end of the PCP period?

If a BMW GFMV is significantly more than the resale value, can a deal be struck to continue the finance agreement or similar? What are other people’s experiences in this area?

Many thanks,

[Supa Koopa]

Originally Posted by ThreeXi

Hello,

My PCP contract doesn’t expire for a couple more years yet, but it got me thinking, is this situation something that can be taken advantage of if I wanted to buy the car outright at the end of the PCP period?

If a BMW GFMV is significantly more than the resale value, can a deal be struck to continue the finance agreement or similar? What are other people’s experiences in this area?

Many thanks,

Not sure if this is what you're asking here, but let's say your GMFV is 30k but the car is worth 20k, if you want to buy or refinance the car you have to pay the 30k not the 20 it's now worth. This is the agreement you signed up for. The only thing you might be able to agree it's that they take the car back and you then buy it off them with their profit added, so probably 25k knowing garages. you'd actually then be the second owner.

Hopefully someone will say I'm wrong but this is how I've always understood it.

[Imspartacus123]

Is there still room for one more in the sandpit? I’m 16 months through my 36 month salary sacrifice, loving the car but so glad I didn’t buy it, not sure if I’d ever buy an EV to be honest, too much uncertainty of the future and tech moving quickly, paying gross of £920 per month out of my salary and that includes everything! Happy to do that over the next few years rather than take the risk of losing thousands

[ThreeXi]

Originally Posted by Supa Koopa

Not sure if this is what you're asking here, but let's say your GMFV is 30k but the car is worth 20k, if you want to buy or refinance the car you have to pay the 30k not the 20 it's now worth. This is the agreement you signed up for. The only thing you might be able to agree it's that they take the car back and you then buy it off them with their profit added, so probably 25k knowing garages. you'd actually then be the second owner.

Hopefully someone will say I'm wrong but this is how I've always understood it.

Hello,

That’s the thought process I was going through, almost like a way of meeting in the middle somewhere to save money, as at the end of the day BMW Finance surely have costs associated with taking cars back.

Many thanks,

[GDEvans]

Originally Posted by ThreeXi

Hello,

That’s the thought process I was going through, almost like a way of meeting in the middle somewhere to save money, as at the end of the day BMW Finance surely have costs associated with taking cars back.

Many thanks,

It would be nice if that could happen. But ultimately you are dealing with two different companies.

I believe the ~£30k guaranteed value at the end of the PCP is the outstanding finance amount. If you were to hand it back BMW finance would take back the car, and drop it into the pool of used iX3s - although the dealer may take it off you it is not their vehicle to sell at that point. The dealer would then be able to sell you the vehicle from that online stock. It is all very complicated.

I'm in the advantageous position of having mine as a leased company car. I know from past experience that the lease companies are keen to get rid of cars approaching the end of their lease, and normally offer a very good price. I will probably buy mine on behalf of my dad, hopefully for a really good price. He knows who has been driving it (positive point now - probably a negative 20 years ago). And obviously it will have been serviced just before the lease ends!!

[keninuk]

Looking at some of the used Premier Pro/M Sport Pro in my area it seems the face-lift drop in values is playing a part. The M Sport Pro seemed to come out of nowhere as I test drove the Premier Pro in September 2021 and had no idea when the M Sport Pro would be coming (neither did the dealers) but ordered one on the 5th October. Usually there would be discounts and finance contributions on an outgoing model but this simply did not happen with the IX3 and the list prices I think stayed the same until the November.

The following are some current forecourt prices I found.

iX3 Premier Edition Pro Nov 2021 KP71YDL 20,695 miles £37,500

iX3 M Sport Pro Dec 2021 HX71RUC 32,353 miles £40,600

iX3 M Sport Pro May 2022 BT22CVF 18,500 miles £41,950

iX3 M Sport Pro Apr 2022 YG22TUH 19,292 miles £43,000

The December 2021 M Sport Pro has done almost 12,000 miles more than the November 2021 Premier Pro but it is still £3,100 more expensive.

You used to be able to get a free trade-in guide via part-ex on the JLR website but I found one yesterday while configuring an EX30 and for excellent/good I was given figures of £39,300/£37,900. My mileage/recent hpi valuations etc are in Post #5. I would guess that Volvo are plugging into the same hpi data that I am as hpi seem to be the modern day equivalent of the sales person fishing their Glass's Guide out of their drawer to give you a price. Obviously the current market is pointing at the low end of valuations but with the current valuations and the forward projections for my M Sport Pro it is still looking OK for me to buy it next year (Final Payment in March 2025 of £33,279).

Perhaps I will stick my head in the group sandpit for a few months if there is any room!