MG4 Depreciation

[Dan C]

Evening all,

I’ve had my MG4 since new and overall it’s been a good car and undoubtedly is a joy to drive.

However I find I’m constantly worrying about depreciation, I won’t be keeping my car long term and looking around at other EV’s ( corsa-e’s, leaf’s, Zoe’s ) they are selling for around £13k with some of them only being 2 years old !

I don’t know if to bail from the MG4 now before I potentially loose another several grand over the next year or two, I’m under no illusion and the MG brand isn’t very desirable so unlikely to keep strong residuals like say a Mercedes.

anyone else in a similar boat ?

 

[smartn]

I think we have all taken a big hit on depreciation. I think it seems a lot worse because the last couple of years has seen a very distorted market for EV's where depreciation was pretty much zero for a considerable time. The market is now getting back to reality where losing 25% of value in year one is probably what should be considered close to normal. Subsequent years should be a bit better.

One thing I would say is this isn't just MG, it's all electric cars, if you really want to be horrified by depreciation take a look at the Porsche Taycan and how much that has lost in 2 years.....

 

[tsedge]

I bought on PCP to remove depreciation risk, the MGFVs offered when I bought were high.

My thought process was that we are in a very unusual car market and the normal parameters don't apply, so depreciation is more unpredictable than usual. So, I will pay more in interest this way but it is a fixed amount and it doesn't matter if the car loses loads, I can always hand it back after 4 years if it was a bad bet.

 

[smartn]

My thinking is we have already taken the hit so jumping to a different car doesn't make sense and anyway what else is on the market that's better value now than a used MG4?

My only issue with the car is software (LKA) which I can live with and hopefully will be resolved at first service when the software updates get applied......

 

[tsedge]

My thinking is we have already taken the hit so jumping to a different car doesn't make sense and anyway what else is on the market that's better value now than a used MG4?

Yes, it is all relative. If you buy your next car second hand you won't lose out. It is only those who always buy new in cash who will suffer significantly.

 

[Ian Key]

Its not a flat depreciation curve and flattens out the older the car is. You've already taken the biggest hit in the value of the car and just swapping it for another will mean you take the biggest drop in value twice.
If you bought the car and like it then keep it. You've only lost money when you come to sell it. If you don't want to loose a lot of money on your car buy a three year old or older second hand one.

 

[bowfer]

I’m on PCP, for the first time in a long time I’m ‘resigned’ to keeping my car for the full term, or close to it, as the days of being able to sell early to clear the settlement, maybe even with some equity, appear to be gone.
Not a big deal.
There are some bargains out there though, car giant have a couple of Seat Mii electrics at 2 years old and £10k.

 

[SiW80]

True, but with the positive reviews and it being named the ‘best EV’ I don’t think it will fall off a cliff once the initial depreciation is over.

Original Tesla Model 3 owners are worse off with the recent price cuts and ‘better’ spec of later models. Saw a 3yr old Model 3 at under 50% of original RRP the other day.

 

[tsedge]

True, but with the positive reviews and it being named the ‘best EV’ I don’t think it will fall off a cliff once the initial depreciation is over.

Original Tesla Model 3 owners are worse off with the recent price cuts and ‘better’ spec of later models. Saw a 3yr old Model 3 at under 50% of original RRP the other day.

Tesla PCPs always used to reflect this - very low MGFVs, which I presume is because they knew their plan was to cut prices and dump volume on the market.

But I haven't looked recently, maybe they have changed.

 

[bowfer]

Tesla PCPs always used to reflect this - very low MGFVs, which I presume is because they knew their plan was to cut prices and dump volume on the market.

But I haven't looked recently, maybe they have changed.

They’ve upped the GFV a bit, when I was looking after rejection of the 4 they were only saying £15k for the GFV.
They’ve upped that to £19k, but they’re still only offering 10k miles per annum minimum, and they’re still doing 8.9% APR.
So for a £1500 deposit you’re looking at +£600 a month.
Mental money.

 

[Kithmo]

I’m on PCP, for the first time in a long time I’m ‘resigned’ to keeping my car for the full term, or close to it, as the days of being able to sell early to clear the settlement, maybe even with some equity, appear to be gone.
Not a big deal.
There are some bargains out there though, car giant have a couple of Seat Mii electrics at 2 years old and £10k.

I've only taken out a PCP once with the ZS to get the dealer deposit contribution etc. and paid it off straight away, so I'm not up on the advantages and disadvantages of PCPs.
As a matter of interest, for my future purchases, how do you get equity on a PCP ?

 

[Alan]

I've only taken out a PCP once with the ZS to get the dealer deposit contribution etc. and paid it off straight away, so I'm not up on the advantages and disadvantages of PCPs.
As a matter of interest, for my future purchases, how do you get equity on a PCP ?

The difference between the GFV and what the dealer offers you when you want to change the car. I don't think you would get it if you just hand back the car and walk away, only when trading in for another new car.

 

[ukslim]

I'm not saying there's nothing to worry about. But a rule of thumb is that any car depreciates most in the first year. Buying new and selling after 2-3 years has always been an expensive way of doing things - but you do get to drive new cars!

There was a period when EVs were depreciating less than ICE -- stories of early Tesla owners buying on 0% finance, keeping the car for a few years, then selling for more than the original price! But there was a bubble, it burst recently, and now there's lots of stupidly cheap used EVs on the UK market.

I think once those are all snapped up, prices will climb again gradually, so it's a good idea to wait things out. Hopefully it won't swell into another bubble.

I do admit, I'm glad I'm leasing though. Perhaps when this lease ends (3 years, or I leave this job, whichever happens first) I'll go for a used EV.

I've only taken out a PCP once with the ZS to get the dealer deposit contribution etc. and paid it off straight away, so I'm not up on the advantages and disadvantages of PCPs.
As a matter of interest, for my future purchases, how do you get equity on a PCP ?

Dealers always try to sell you on the idea of building up equity on PCP. But I've done PCP for a good 15 years on various cars, and if there's been any equity, it's been small.

Essentially, when the PCP term ends, you can either hand the car back, or pay a final amount ("bubble payment") to own the car yourself. If you can sell, or PX the car for less than that bubble payment, that's equity.

 

[bowfer]

I've only taken out a PCP once with the ZS to get the dealer deposit contribution etc. and paid it off straight away, so I'm not up on the advantages and disadvantages of PCPs.
As a matter of interest, for my future purchases, how do you get equity on a PCP ?

The car is yours to sell at any time.
So you call the finance company and ask for a settlement figure.
How you settle that is up to you, but once you it’s yours to sell.
I’ve twice recently sold PCP cars to dealers, they settle the finance and give me the equity balance.
On my Leaf40 it was £2500 equity after one year ownership.

But I've done PCP for a good 15 years on various cars, and if there's been any equity, it's been small

Unappealing cars that aren’t in demand, or bad timing.
Last few PCP cars I’ve had, going back 6 years, I’ve got rid early on in the agreement (sometimes only a few months) but I’ve made enough equity that I’ve covered the deposit on the next car, sometimes even enough to cover the deposit and some left over for H+B

Leaf24
Polo Beats
Polo Gti
Leaf40

All settled very early, equity and move on.

 

[tsedge]

I've usually had good equity (several grand) trading in early after 2 or 3 years on PCPs - But: whether that is actually a net win given deposit and interest I haven't calculated.

It all depends on the market at the time you trade in and how desperate the dealer you are buying from is for you to do the deal.

 

[Themist0]

Keep the car for 10 years, it will still be a good car and then it’s only depreciated by 3k per year.. if you like new cars then I’m afraid you have to pay for it

 

[Rolfe]

I'm certainly planning on keeping mine 10 years or more. Which is why the silly software bugs annoy me. Do I have to put up with the USB player not working properly for the next 10+ years?

 

[Themist0]

Hopefully they will have OTA updates in the next few years as that should be the standard, I don’t think MG will ever be a great software developer, but the car is great and battery and motor should be good for 10 years and the 80-100k I plan to do. Also for those if you with the LFP batteries, these should hold value better as that will become the standard and quashes the netsayers on fires and cobalt concerns… in 10 years my battery will be like Betamax ( much better quality, but not got the mass market)

 

[Rolfe]

I've still got Betamax capability at home.

 

[bowfer]

I'm certainly planning on keeping mine 10 years or more. Which is why the silly software bugs annoy me. Do I have to put up with the USB player not working properly for the next 10+ years?

To be fair, USB music went out the window close to 10 years ago.