UK residuals for PCP raised?

[Dee123]

Does anyone know if residuals have been raised for the i3 in the UK? A month ago, I believe we were at 37% thereabout for PCP plans for 12k miles a year :shock: Would be nice to see residuals of 53% like the USA...

 

[elptex]

Does anyone know if residuals have been raised for the i3 in the UK? A month ago, I believe we were at 37% thereabout for PCP plans for 12k miles a year :shock: Would be nice to see residuals of 53% like the USA...

Would definitely be nice--I sure hope so. Our is arriving in a couple weeks and we are going with 3 year PCP. I'll be raising the residual question and will update here once we know.

 

[elptex]

Yes, residual in the UK has been raised by the same 7% as the US.

We signed all the paperwork yesterday (Saturday, 20 September) and had the numbers re-run from the original quote, providing the increased residual.

 

[sasman]

I don't under stand what residuals means?...Does that mean leasing will be cheaper? as well as PCP?..

I have just looked again at the figures 37% ? before you say its now 7% higher = %44? but in the USA its 54%? is that correct.

 

[elptex]

Residual = the value of the car after an agreed lease period. A traditional lease does not guarantee the value of the car at the end of the term. A PCP provides a guaranteed value of the car at the end, giving you assurance that you won't be upside-down on the value of the car (owing more than it is worth) at the end of the term.

A residual being raised does indeed mean leasing (traditional and PCP) will be cheaper. The monthly amount all depends on original value of the car, how much you pay initially, and the terms of the lease/PCP (primarily duration and total mileage). As an example, our previous quote was 3-year residual value @ 18k miles per year of ~£11,600. The increased residual on the same terms came to ~£12,400. Not a huge difference, but enough to lower monthly payment by about £30 (~£1k total for the 3 year duration).

Hope that helps.

 

[sasman]

Thanks for that..elptex..What was the Residual Value? was it 44%?

 

[Dee123]

Thanks elptex. I just might PCP with these numbers

 

[sasman]

What is the residual value of the i3 is it 44% on another thread I have read its 53%? on bmw blog its 36 months 12000 miles is 46%?

 

[elptex]

Per my post above, there is no de-facto residual percentage because a residual value primarily depends on a base depreciation value and 3 variables:

1) Initial value of the car
2) Length of lease
3) Total mileage allowance

This topic is about the base residual value being increased. Factor in 3 variables that have considerable variance and you will see people with residual values varying greatly. To illustrate with an example (these are not real numbers)

Base depreciation = £1,000 per year
1) Initial value of car = £10,000
2) Length of lease = 3 years
3) Total mileage allowance = 12,000/year or 36,000 total

After 3 years, the base depreciation would total £3,000, so a base residual of £7,000. If that base depreciation is based on 10,000 annual miles (30,000 miles in 3 years), this example would exceed that by 6,000 miles (3 years at 12,000 miles). Let's say depreciation of miles over base base is £.50 per mile, this would equate to £3,000 (6,000 X £.50). This would bring the residual down to £4,000. (I reckon mileage over base depreciation is built into monthly costs, I'm just line-iteming it here to illustrate)

I'm using simple/extreme numbers to make the point that these 3 variables have a big impact on residual such that there is no simple, matter of fact "residual percentage".

N.B. I'm not a finance guy. I don't know all the workings of this stuff. I only speak to what I've experienced and to my limited understanding.