MB accept S205 rejection

[S205-FTW]

Mercedes Agility looks to me not to really work if you put too much in as you more than likely won't see it back.

What do you mean by 'put too much ín'?

If you mean a deposit, then it's irrelevant as over the term you pay the full amount. If you put a higher deposit down then your monthly payments are lower.

Irrespective of your deposit, you pay the same amount of the 24/36/48 months.

There's a minimum and maximum deposit contribution. Interest rate and GMFV are fixed.

 

[TT Law]

What do you mean by 'put too much ín'?



If you mean a deposit, then it's irrelevant as over the term you pay the full amount. If you put a higher deposit down then your monthly payments are lower.



Irrespective of your deposit, you pay the same amount of the 24/36/48 months.



There's a minimum and maximum deposit contribution. Interest rate and GMFV are fixed.

Some manufacturers give a GmFV to allow a deposit for the next car. Agility seems to give a GMFV that will allow you to give the car back but unlikely to have any equity for the next car. So if you put say 4K in your monthly will be lower but at the end the 4K is gone.

My opinion of course but backed by the dealer agreeing with me.

Steve

 

[S205-FTW]

Some manufacturers give a GmFV to allow a deposit for the next car. Agility seems to give a GMFV that will allow you to give the car back but unlikely to have any equity for the next car. So if you put say 4K in your monthly will be lower but at the end the 4K is gone.

But if you don't put the £4k down as a deposit (say just £1k deposit), then your monthly payments will be higher. So like I said, you've paid exactly the same amount over the term.

What you pay each month for a PCP is:
(List price -discount -dealer contribution -deposit -GMFV) / term.

If you're offered over the GMFV, it is likely to just be the dealer playing games when you buy your next car (the same way some some dealer give you a sky high prices for a PX). You're just getting shafted elsewhere - I believe it's known in the trade as the '4 square method'

Personally, I budgeted on getting absolutely nothing over the GMFV. That way there can only be a neutral or positive outcome for me.

Setting a GMFV is more of a risk for the lender. If they put it too high, then the punter will pay less in interest.
If they put it too low, then they will lose out as punters would buy the cars up then immediately sell them on.
If a dealer is offering you over GMFV for your new purchase, the chances are they're just taking it off any discount they would otherwise have given you. The whole "you'll have equity at the end" is just part of their sales pitch for them to sell you a car and finance.

 

[Mr Kripling]

I've never bought a car with finance, but in economic terms isn't the "Guaranteed Minimum Final Value" just an interest-only portion of the original loan to buy the car?

Talking about it as if it gives you any "equity" seems somewhat misleading to me.

 

[Deleted96908]

What you pay each month for a PCP is:
(List price -discount -dealer contribution -deposit -GMFV) / term.

What about the finance company's margin?

Setting a GMFV is more of a risk for the lender.

Increasingly, future values are agreed with residual insurers, or are pre sold as part of a collateralized futures contract. The premiums for which are paid by the punter.

I've never bought a car with finance, but in economic terms isn't the "Guaranteed Minimum Final Value" just an interest-only portion of the original loan to buy the car?

Yep, it's the amount the driver has to pay in the event they choose to buy the car. Currently finance houses are borrowing this money at historically low rates but are still making around 12%-13% gross on the deal, even when passing much of the saving onto the driver.

One also has to remember that most finance incentives - low APR, 0% down etc, are actually manufacturer marketing incentives, passed off as low finance rates. It sounds a lot better to buy your MB at full price using very low cost finance, than it does to pay higher finance rates for a discounted car.


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[Roy M]

All credit to you for getting MB to take an active role but it is their complacency and outright avoidance of issues that has made us question the marque and what it stands for….we have encountered a few and there are many who have posted on here about issues that have not been dealt with without a fight.

Too often, issues with a dealer, reported to MB, are passed back to the dealer to sort and the cycle goes on; this has been reported many times on this forum in my short time here. We also don't like the lack of dealer network; every dealer (or chain) is an entity in itself and if they don't behave or provide poor service, there is no choice but to find another dealer elsewhere because MB pass the issue to the dealer…...

EXACTLY - dealer fails to provide a fix to a simple issue after 3 visits and 6 hours wasted. Customer service say it has to go back to the dealer who are obviously not interested. As I said to them this morning - they are not Customer Service they are Dealer Support - I will NEVER buy another Merc unless it is older and out of warranty and then I will NEVER go to a dealer for servicing