[CliveL]

I had a review with my local BMW dealership at the weekend, about 3 and a bit years into my 4 year PCP finance deal. I was disappointed to find, based on their valuation at least, that I'm apparently in "negativity equity" on my finance agreement

I ordered my xDrive 20i xLine back in early 2016, and with a discount of around 6% it came out at about £35k. I had a reasonable deposit and trade-in, and financed about £28k. Today they reckon the X1 is worth about £16k, and there's over £18k outstanding, so all the talk at the time of using the car to provide a deposit on the next one when the time comes has come to nothing it seems... This is my first time with financing a new car, and it hasn't been a great experience based on these recent comparisons. It's put me off PCP, and I'm wondering if I should lease next time, or just get a loan (lower interest rate), or avoid brand new cars altogether

I do have the option of just handing the car back in a couple of months, or stick with it and pay the "guaranteed final payment" at the end of the 4-year term to make it mine. But that payment may well be more than it's "worth" as a trade-in, at least with BMW direct.

I'd be interested in your views on this, and whether anyone else has hit the end of their PCP recently and how it worked out for them?

[knightarmor]

As far as I can tell (in the USA anyway) cars seem to be losing their value faster in a shorter period of time. The X1 seems to be one of those vehicles that's undervalued based on what the current trends are. Which sucks because it's a good vehicle that gets good fuel economy based on other vehicles of its size (we have a 4 cylinder turbo)

You always lose money when purchasing a new vehicle, it doesn't matter what it is (unless it's a super exotic but this isn't the forum for that). If you plan on switching vehicles every few years a lease is for you, it's that simple.

[oakey46]

Have you searched for cars of a similar specification and age to yours on the BMW UK used cars search to see how retail values compare to the minimum guaranteed future value on your PCP? If not, it is probably worth looking at the difference and, if you want to have another BMW, go back to the dealer to see what discounts may be available now. It is possible/probable that having bought your X1 shortly after they were introduced to the UK and when car sales were more buoyant than today's market you may not have been offered a particularly attractive deal compared to current conditions. You might (or might not!) now be able to get a more attractive deal on a replacement, in addition to which BMW are currently offering PCP at 4.9% APR with a deposit contribution from themselves. I assume though that you've looked on the website to see what offers may be available.
In the end, I suppose it doesn't make that much difference as to how you finance/fund a purchase because with any new car the moment you drive it off the forecourt you're on a loser! Against that though, if you look at financing a used car the rates on PCP are quite a lot higher and again you can see some examples at around 12% on a used BMW from a dealer.
Good luck and just worth pointing out that I'm not a specialist in this area of finance, but just another punter!