Taking a gamble on the PCP MGFV vs terminating early and switching model

[Teredon]

I've been keen to switch over from my Model S to a Model 3 when my PCP finishes at the end of 2020 but I've worked out I can do a voluntary termination at the end of 2019 and (perhaps optimistically) get a Model 3 then. I would then avoid any potential 50k+ mile warranty issues in 2020.

My concern is that by walking away early, I could be missing out on having equity on the MS by the end of 2020 and using that as a deposit for a M3. The accuracy of the minimum guaranteed future value (MGFV) is anyone's guess but I'm inclined to believe that it's a low estimate of what it will be worth:

- MS 75D, 2016 facelift, AP1, premium interior, high amperage charger upgrade, no speed upgrade.
- MGFV of £29.6k (43.8%) based on 60k miles after 4 years (end of 2020).

I'm seeing 2014 MS 85 with 60-75k miles selling for £38-40k but I appreciate it's difficult to extrapolate the data and account for the impact of M3 release and further refreshes on MS depreciation.

Hmm...

 

[DJP31]

An interesting position, and one that I imagine a few people are in. I guess all you can do is assess the p/x value it at the point when the voluntary termination is possible. The MGFV is a low percentage compared to mine (MS 75D AP2 - 54% 4yrs 40k miles 3/21) but as you say, the market value is a bit of a guess and you'd be chancing your arm out of warranty too.

Well worth having a chat with Richard Symons, http://www.rsymons.co.uk he's a Tesla driver as well as running the business. He's probably the biggest supplier of used Tesla's and well thought of both by those who have bought and sold via him. I have no connection BTW.

 

[Mark_T]

I'm seeing 2014 MS 85 with 60-75k miles selling for £38-40k but I appreciate it's difficult to extrapolate the data and account for the impact of M3 release and further refreshes on MS depreciation.

Where are you seeing those sale prices?

Unless those are private sales figures there is always a big gap between what you can sell for vs what people as asking for the vehicles 2nd hand.

Well worth talking to Richard Symons to get a little perspective, also consider that you will have to exercise the option to purchase the car at the end of the lease and then sell privately as it is highly unlikely that you'll get to benefit from any excess equity any other way...

 

[Teredon]

Where are you seeing those sale prices?

Unless those are private sales figures there is always a big gap between what you can sell for vs what people as asking for the vehicles 2nd hand.

Well worth talking to Richard Symons to get a little perspective, also consider that you will have to exercise the option to purchase the car at the end of the lease and then sell privately as it is highly unlikely that you'll get to benefit from any excess equity any other way...

I had a look at private sales and listings at http://tesla-info.com/UK/inventory.html but you're right, the valuation at the end of the PCP will fall significantly short of private sales figures. It makes more sense to terminate at the end of the 3rd year and would be less hassle overall.

I've seen Richard Symon's name mentioned a lot so I'll be sure to look into it.

 

[Teredon]

An interesting position, and one that I imagine a few people are in. I guess all you can do is assess the p/x value it at the point when the voluntary termination is possible. The MGFV is a low percentage compared to mine (MS 75D AP2 - 54% 4yrs 40k miles 3/21) but as you say, the market value is a bit of a guess and you'd be chancing your arm out of warranty too.

Well worth having a chat with Richard Symons, http://www.rsymons.co.uk he's a Tesla driver as well as running the business. He's probably the biggest supplier of used Tesla's and well thought of both by those who have bought and sold via him. I have no connection BTW.

I think the extra mileage makes the difference on mine. In all likelihood I'd end up exceeding the 60k limit by 10k or so which isn't ideal.

It looks like he's the go-to for selling used Teslas and not too far away either so I'll definitely get in touch. Thanks.

 

[Mark_T]

It makes more sense to terminate at the end of the 3rd year and would be less hassle overall.

It will be interesting to see what sort of value they give you for an early termination.

I've seen reports from a couple of people who were very disappointed with the offer when compared to the GMFV.

Not sure I'd suggest going down the CCA 'voluntary' route and in any event it doesn't usually help much with high residual PCP deals.

 

[DJP31]

In all likelihood I'd end up exceeding the 60k limit by 10k or so which isn't ideal.
.

I've done half of my 40k in 16 months - the blasted car is just so good to drive I'm taking every opportunity . I cannot believe my car will be worth 54% at the 4 year point some am working on the assumption the car will be going back + an excess mileage charge. I suspect the man maths will be going into over drive, but at least I've already crossed the Rubicon, so it’ll be when I get the next one not if!

 

[WannabeOwner]

Get the Roadster II by then, so that can do half your mileage and preventing overs on the MS.

Do you need a referral code?

 

[Teredon]

It will be interesting to see what sort of value they give you for an early termination.

I've seen reports from a couple of people who were very disappointed with the offer when compared to the GMFV.

Not sure I'd suggest going down the CCA 'voluntary' route and in any event it doesn't usually help much with high residual PCP deals.

Hmm I think I need to become more au fait with the different options. Presumably I'd have to pay the settlement figure before selling it unless it can be done seamlessly with Richard Symons for example.

 

[Teredon]

I've done half of my 40k in 16 months - the blasted car is just so good to drive I'm taking every opportunity . I cannot believe my car will be worth 54% at the 4 year point some am working on the assumption the car will be going back + an excess mileage charge. I suspect the man maths will be going into over drive, but at least I've already crossed the Rubicon, so it’ll be when I get the next one not if!

Haha I know the feeling. I've done 32k miles in 18 months and I'm relying on being out of the country with work for 12 months within the PCP period so I don't go drastically over the mileage. All I do is a 500 mile round trip once a week and a bit of local driving on the weekend but I find myself restricting how much I drive, whereas I'd drive all over the place when I first got the car... it's probably better to just enjoy it fully and bite the bullet when it comes to paying excess fees at the end.

 

[Teredon]

Get the Roadster II by then, so that can do half your mileage and preventing overs on the MS.

Do you need a referral code?

If only

 

[DJP31]

Hmm I think I need to become more au fait with the different options. Presumably I'd have to pay the settlement figure before selling it unless it can be done seamlessly with Richard Symons for example.

As I understand it the options are:

1. Obtain an early settlement finance figure and pay it off. No excess mileage fees or other costs
2. Having done 1. a private buyer buys from you and has clear title to the car immediately
3. Agree a sale to e.g. Richard Symons and he settles the finance outstanding and gives you the balance
4. P/ex with e.g. Tesla and use the equity towards the deposit on the new car
5. Hand the car back once you have paid 50% or more of the total amount due under the contract. This figure will be on the finance agreement. Your total allowed mileage is pro rata’d to the point of settlement and excess mileage fees payable, plus any excess wear and tear penalties.
6. Hand the car back at the end of the agreement with excess mileage and wear and tear charges calculated.

 

[Teredon]

As I understand it the options are:

1. Obtain an early settlement finance figure and pay it off. No excess mileage fees or other costs
2. Having done 1. a private buyer buys from you and has clear title to the car immediately
3. Agree a sale to e.g. Richard Symons and he settles the finance outstanding and gives you the balance
4. P/ex with e.g. Tesla and use the equity towards the deposit on the new car
5. Hand the car back once you have paid 50% or more of the total amount due under the contract. This figure will be on the finance agreement. Your total allowed mileage is pro rata’d to the point of settlement and excess mileage fees payable, plus any excess wear and tear penalties.
6. Hand the car back at the end of the agreement with excess mileage and wear and tear charges calculated.

Thanks for the clarity. Option 3 sounds most tempting.

The other question is whether M3 will be truly rolled out at scale in 2019... I used to have a reservation but cancelled it after I got the MS unfortunately.

 

[Mark_T]

As I understand it the options are:

1. Obtain an early settlement finance figure and pay it off. No excess mileage fees or other costs
2. Having done 1. a private buyer buys from you and has clear title to the car immediately
3. Agree a sale to e.g. Richard Symons and he settles the finance outstanding and gives you the balance
4. P/ex with e.g. Tesla and use the equity towards the deposit on the new car
5. Hand the car back once you have paid 50% or more of the total amount due under the contract. This figure will be on the finance agreement. Your total allowed mileage is pro rata’d to the point of settlement and excess mileage fees payable, plus any excess wear and tear penalties.
6. Hand the car back at the end of the agreement with excess mileage and wear and tear charges calculated.

I suspect that option 5 is rarely available on Tesla PCP plans as the residuals are typically high and the interest rates low, or at least lower than the UK norm.

In my case for example I would only hit the magic 50% figure when I make the 48th payment of the 48 due

That's what happens when they give you a 49% residual and a total interest charge a little below the minimum deposit...

 

[DJP31]

I suspect that option 5 is rarely available on Tesla PCP plans as the residuals are typically high and the interest rates low, or at least lower than the UK norm.

In my case for example I would only hit the magic 50% figure when I make the 48th payment of the 48 due

That's what happens when they give you a 49% residual and a total interest charge a little below the minimum deposit...

Yes, I’m sure you’re right about option 5 but for the sake of completeness... and mine is month 44 .

 

[Teredon]

I suspect that option 5 is rarely available on Tesla PCP plans as the residuals are typically high and the interest rates low, or at least lower than the UK norm.

In my case for example I would only hit the magic 50% figure when I make the 48th payment of the 48 due

That's what happens when they give you a 49% residual and a total interest charge a little below the minimum deposit...

Ah I see. I worked out I'll cross the 50% line at month 36 but I had put a 15k deposit down at the beginning.

 

[WannabeOwner]

I used to have a reservation but cancelled it after I got the MS unfortunately.

Not sure of facts, but I have heard that in USA an existing MS / MX owner placing an M3 order (i.e. now) has priority and will take delivery in a few weeks. Tesla not yet shipping any low-end spec models though ...

I reckon that by the time LHD deliveries start in UK then production will be at full capacity, so existing orders will not represent a huge backlog, and priority given to higher spec (i.e. more profitable) models.

So as an existing owner, and if you want a higher spec M3, then the wait might not be long.

But the view in your crystal ball might be different to mine

 

[mrkisskiss]

The other question is whether M3 will be truly rolled out at scale in 2019... I used to have a reservation but cancelled it after I got the MS unfortunately.

Probably more like 2020... by which time there'll probably be a clearer demarcation between the 3 and the S...

I figured I'd probably stay in the Model S PCP upgrade loop for a quite some time... the Model 3 just won't seem all that sexy by 2020... and presumably the S will be on Autopilot 4.5 (FSD within 3 months maybe; 6 months definitely), and have all kinds of minor tweaks and updates by then that will make the 3 seem rather dull in comparison.

 

[WannabeOwner]

(FSD within 3 months maybe; 6 months definitely)

Let me guess: you've been having dinner with Elon?

 

[Peteski]

Probably more like 2020... by which time there'll probably be a clearer demarcation between the 3 and the S...

I figured I'd probably stay in the Model S PCP upgrade loop for a quite some time... the Model 3 just won't seem all that sexy by 2020... and presumably the S will be on Autopilot 4.5 (FSD within 3 months maybe; 6 months definitely), and have all kinds of minor tweaks and updates by then that will make the 3 seem rather dull in comparison.

I'm not sure about all that. The current S is getting toward the end of its lifecycle, so probably not much resource going into hardware updates at this point. But there could well be an all new S announced by 2020, which could be awesome! Disclaimer: I haven't heard any rumours of a new S, just basing it on typical automotive product lifecycles as the S will be 8 years old in 2020 and has already had a mid-life facelift.