UK PCP return value deductions

[anonymouse]

Trying to calculate whether to use cash or PCP for a new Model S... Does anyone have any experience in what sorts of wear and tear are considered fair by Tesla when returning a PCP car at end of term (assume 2-3 years)?

For example, are they fairly tolerant or do they hit you with £500 for a little mark and £200 per wheel for scuffed rims etc?

More generally, although the website lets me run general simulations on pricing, I can’t find anywhere a link to the full terms and conditions. Anyone know how to get that?

Thanks.

 

[DJP31]

I believe, although haven’t actually looked for it, that there is a guide that manufacturers work to when assessing fair wear and tear. Google will probably help.

Only Mercedes finance have tried, unsuccessfully, to rob me, and I think they thought the car was being returned by a fleet manager who wouldn’t care much if a bill arrived. I will never use Mercedes finance again as a consequence.

I doubt Tesla/Alphera/BlackHorse etc will be different from the norm. Occasional scuff and a bit of kerbing should be ok, but I’d probably get anything like that cosmetically sorted before handing back.

Given the option of cash v PCP I would PCP every time on a Tesla. The GMFV’s are much stronger than they should be IMO, and having the ability to hand the car back could be a get out of jail free card. 3 or 4 years is a long time in the battery, tech and EV market. If a Tesla are still leaders of the pack then there may even be some equity in the car!

 

[Peteski]

I have a copy of the Blackhorse fair wear and tear guide that came with my PCP agreement. It seems fairly reasonable e.g.

Door mirrors - minor scuff marks or scratches up to 25 mm are acceptable
Interior - normal wear and tear to carpets and trims is acceptable, however burns, cuts, scratches or dents to trim are not acceptable
Tyres - all tyres must be within legal limits
Wheels - minor scuffs and scratches up to 25 mm are acceptable. Scuffs totalling up to 50 mm on the circumference are acceptable
Dents - Dents up to 10 mm in diameter are acceptable, providing the paint surface is not broken
Scratches - up to 25 mm are acceptable, providing not down to primer or bare metal
etc, etc.

Basically everything has to be in good condition, with wear and tear in line with age and mileage.

Also have to maintain recommended Tesla service schedule, so no skimping there.

I think the Tesla PCP is very generous. Guaranteed residuals and finance rates are class leading, even though the latter has increased recently. Still way better than Porsche, Volvo, Audi etc. Personally I wouldn't risk putting cash into a new Model S in case residuals go down the pan, which could happen for all sorts of reasons.

One pleasant surprise was that excess mileage is now a flat 7p/mile and does not increase to 14p/mile after 5000 miles as it did previously. So that's a very competitive excess if you are going well over the agreed PCP mileage.

 

[anonymouse]

That is very helpful thank you. Looks as though I can be fairly relaxed about return deductions except for tyres where I need to guess a refresh cycle (I see there is lots on that on the forum).

Overall it looks as though Tesla’s PCP gives a quite affordable hedge against the value tanking.

Now to contemplate whether I want to be locked into 3 years or go for 2 for flexibility (while also knowing that 3 years would be better to stop myself getting all excited about whatever comes next in 2 years )

 

[Peteski]

That is very helpful thank you. Looks as though I can be fairly relaxed about return deductions except for tyres where I need to guess a refresh cycle (I see there is lots on that on the forum).

Overall it looks as though Tesla’s PCP gives a quite affordable hedge against the value tanking.

Now to contemplate whether I want to be locked into 3 years or go for 2 for flexibility (while also knowing that 3 years would be better to stop myself getting all excited about whatever comes next in 2 years )

No worries, let me know if you need a referral code. I haven't used any of mine yet!

I think the Tesla PCP is about as good as car finance gets. We took a 4 year, 40K mile PCP deal at the 1.5% APR rate last September and fully expect to hand the car back at the end. I just can't see its value being higher in p/ex or private sale and will probably be considerably lower. The monthly cost at those rates ended up cheaper than many alternative cars on PCP despite having considerably lower cash prices e.g. Volvo XC90 T8, Porsche Cayenne S, etc. With these low finance rates and high guaranteed residuals, Teslas are a lot more competitive than most people think when just looking at the cash prices alone. Even Porsche residuals are lower on PCP!

 

[DJP31]

Now to contemplate whether I want to be locked into 3 years or go for 2 for flexibility (while also knowing that 3 years would be better to stop myself getting all excited about whatever comes next in 2 years )

Personally I would go for 3, if something terrific comes up after 2 years you could always bail out providing the outstanding finance can be covered.

There’s also the right to hand the car back once you paid 50% of the total amount of the deal. So depending on how much of a deposit you are putting in you’ll be able to hand it back before the 3 years anyway.

 

[WannabeOwner]

Also have to maintain recommended Tesla service schedule, so no skimping there

This may be a consideration for a high mileage driver. I'm only bothering to have the car serviced once a year (27K miles in my case). Service is quite expensive ... given that there really isn't very much for them to do. But I suspect everyone will want it once-a-year, so for someone doing now more than service-interval mileage each year then its not relevant ... apart from the service cost there's the hassle-cost too, which of course is probably more of an issue for a high mileage driver, although Tesla have come and picked up the car and left me a loaner, so hasn't been a big deal.

 

[Peteski]

This may be a consideration for a high mileage driver. I'm only bothering to have the car serviced once a year (27K miles in my case). Service is quite expensive ... given that there really isn't very much for them to do. But I suspect everyone will want it once-a-year, so for someone doing now more than service-interval mileage each year then its not relevant ... apart from the service cost there's the hassle-cost too, which of course is probably more of an issue for a high mileage driver, although Tesla have come and picked up the car and left me a loaner, so hasn't been a big deal.

Just to be clear, service as per the recommended Tesla schedule is a compliance issue for PCP, regardless of whether or not you think it's necessary. Basically needs a full Tesla service history to maintain the guaranteed residual.

 

[anonymouse]

Also very helpful.

So it looks like 3 yrs PCP is the way to go.

Next question!

I ran a couple of models based on the rough info provided on the website, and it looks as though if I do 20k miles (for example) - which I assume is per year, they don't say - it is cheaper (and safer) to set the PCP up for 10k miles and later pay the 7p/mile. Am I calculating this right?

Next, it gives a choice between Barclays and Blackhorse, but no differentiation between them. Annoying. Any guidance? And are the detailed terms identical, does anyone know?

 

[WannabeOwner]

ervice as per the recommended Tesla schedule is a compliance issue for PCP,

Sorry, yes I wasn't clear.

For a higher mileage driver there might be a case for considering a NON PCP purchase because of the PCP requirement for compliance with manufacturers service interval (albeit that that is not a requirement for Tesla warranty ... currently!)

Maybe Tesla will slip the service intervals. Seems to me that 20K miles, maybe more, combined with a time-period if sooner, is likely to be sufficient for all EVs

it is cheaper (and safer) to set the PCP up for 10k miles and later pay the 7p/mile. Am I calculating this right?

I don't know the answer for definitely, but I've seen threads here saying that the Maths does indeed work that way.

 

[Peteski]

Blackhorse at some point recently made the 7p/mile excess a flat rate regardless of mileage (previously it was 7p/mile up to 5K miles and then 14p/mile thereafter). What I don't know is if they adjusted the higher mileage PCP monthly costs to account for this (as they should to keep it competitive). But it's a pretty simple calculation to make for yourself. I took out a 10K per annum PCP and expect to do a little more than that, maybe 12-15K. Barclays was not an option when I ordered in late September, so cannot comment on that deal and differences with Blackhorse.

 

[unbelievable]

I ran a couple of models based on the rough info provided on the website, and it looks as though if I do 20k miles (for example) - which I assume is per year, they don't say - it is cheaper (and safer) to set the PCP up for 10k miles and later pay the 7p/mile. Am I calculating this right?

No. They will not honour the 40k mile buy back price if you bring it back with 50k miles on it. They will depreciate it accordingly.

 

[Fellsteruk]

For me PCP is great was against it to start with as always used cash or HP but had a few cars on PCP now and never had any issues with the return and wear n tear being decent.

If your really worried about Alloys, you can get a good policy to cover them my current car has 20in diamond cut alloys look amazing but was thinking to myself they gonna be costly to fix so for about £150 I got 3 years alloy wheel protection with unlimited claims and if it cannot be fixed such as buckle or massive chunk missing they replace with new.

Normally I’m against these addons as they are just cream for the dealers but I’ve made a couple claims so been worth it.

Also with the guaranteed min Tesla trade in at the end your in a good position, I’ve also used black horse pcp finance before and never had issues.

I’ve actually just sorted my pcp finance with black horse for my MX

 

[DJP31]

No. They will not honour the 40k mile buy back price if you bring it back with 50k miles on it. They will depreciate it accordingly.

I believe they do. You obviously pay the excess mileage charge but the GMFV stands.

 

[unbelievable]

I believe they do. You obviously pay the excess mileage charge but the GMFV stands.

That's what I was told by my adviser when I asked. What would be the point of a pricing structure that could be cheated?

 

[DJP31]

That's what I was told by my adviser when I asked. What would be the point of a pricing structure that could be cheated?

I ageee it seems strange and raised it with Tesla Finance some months ago. Their reply confirms my understanding:

many thanks for your enquiry.
You're right - the contractual GMFV will still be valid, since excess mileage will be charged on top of it.

 

[Peteski]

That's what I was told by my adviser when I asked. What would be the point of a pricing structure that could be cheated?

The excess mileage charge is the extra depreciation charged on top of the GMFV and it is now a flat 7p/mile with Tesla Blackhorse finance. When I ordered my car in late September, it was at that time 7p/mile for the first 5K miles excess and then 14p/mile for any further excess mileage above that. I calculated how that would pan out with 10K and 20K per annum PCP mileage and, as you might expect, the 20K PCP worked out a little cheaper overall than taking out a 10K PCP and then paying excess mileage charges for 20K per annum usage. But now with the flat rate *unlimited 7p/mile it's a different story, unless Blackhorse have since adjusted their 20K PCP prices accordingly. This would most definitely be something to check carefully before signing up!

As it happens, our mileage is likely to be something like 12K per annum, maybe 15K max, so obviously I took the 10K PCP and will pay any excess at the very reasonable 7p/mile rate.

*at least there is no limit stated in the paperwork. If you were planning to rack up a galactic mileage, I would certainly want to confirm this.

 

[unbelievable]

Tbh I only asked out of curiosity because, like the OP, I wondered how it seemed to be cheaper to go the 10k route. I'm unlikely to go over the 10k pa, but you never know, that European trip's going to rack up a few miles .

 

[DJP31]

Tbh I only asked out of curiosity because, like the OP, I wondered how it seemed to be cheaper to go the 10k route. I'm unlikely to go over the 10k pa, but you never know, that European trip's going to rack up a few miles .

I didn’t think I’d go over 10k. Took this pic on the anniversary of picking my car up.

And so far I haven’t been abroad with the car!

 

[Bobby_Dazzler]

Has anyone got any up to date figures on mileage overage on a Tesla PCP plan?