Jaguar I-Pace driver who was rammed by police as brakes failed on M62

[UKTJ]

3 hours ago, V said:

I have been interested in electric vehicles for more than 20 years. I am not against them as a thing, I'm just against governments forcing them upon us as the only new vehicle choice. I learned to drive in an electric milk float when I was 13.

 

I think many car buyers don't properly compare the running costs of a BEV with that of an internal combustion vehicle. The 'lower' running costs today are due to deferring a significant amount of the real cost of use until later in the vehicle's lifetime. After about 800 battery charge cycles the EV's battery will be beyond it's best and will have started it's descent into an ever decreasing drivable range. At some point the owner will be faced with either (a) replacing the battery, (b) selling/trading the vehicle or (c) scrapping it. It is at this point when the deferred cost arrives either as a large bill for a replacement battery or huge loss in vehicle value. Within a few years, lease companies are going to readjust when they end up with large numbers of BEVs not selling at auction for the values that they have written down.

 

Those cheap running cost achieved now only become real if you deposit the price/mile difference into savings or investments every time you recharge your battery. After spending the fund on a, b or c, you will know what the true cost per mile was. If you still have to find money to replace the vehicle or battery at that point, your running costs were higher all along.

 

I suspect that a 3 year old BEV will be effectively valueless at the end of a 3 to 4 year lease (at 7 years old) depending on mileage. I think a lot of people that have leased internal combustion engined cars will find that the BEV will not be an asset to trade in for the next lease and that they will have to stump up cash for the deposit on the next one.

I think that depends on the structure of the purchase plan.  I am no expert but I thought there were at least a couple of options.  One where you are literally just leasing the vehicle for a monthly charge, at the end of the contract period you hand the vehicle back and decide what you want to lease next.  That is what I recall was suggested when we were looking at a BEV some time ago (encouraged by the very adventageous BIK rates).  Alternatively you can pay a deposit, followed by x months payments, with the vehicle having a pre-determined contract value at the end of the contract term.  If the vehicle is worth more than this pre-determined amount the 'purchaser' can in effect buy at the lower pre-determined value and immediately trade in for another contract with the difference between the contract and market values providing some or all of the deposit required.  I think what you are referencing is the latter of these two models.

 

I have no personal experience, but I do know a fair few people who have entered into the latter type of contract for ICE vehicles.  In some cases the scenario outlined above played out and they had a surplus of value so bought the car at the end of the contract, but in others the market value was well below the contract value so they just handed the vehicle back to the dealer and left them with the shortfall.  Which of the two outcomes happens is very much determined by the market for second hand cars in general and the specific model in particular.  If all BEVs that reach that point are valued well below the contract value then it will play out very much as you describe.  But, in the short term at least, as you say the dealers will be as big of a loser as the customer.

 

As an example to illstrate the point I think we both agree on, I have just looked at the Cazoo website and to keep it relevant to this thread have found a Jaguar i-Pace registerd in December 2020 for sale at £26,850, so just over three years old.  I can 'buy' that on a PCP contract which is structured as a deposit of £10,000, 36 monthly payments of £211.54 and a optional final payment of £14,737.  If at the end of the three years the car turns out to be worth nothing I would just hand it back, at that point I would have paid Cazoo £17,615.44 for the use of the car for 3 years including the cost of borrowing money from them.  If the car really is worthless, as you say the company (dealer or finance company, not sure which) ends up well out of pocket.

 

I agree that if the scenario shown in the example above does play out across the board then financing costs will be adjusted to reflect a residual value of zero after 7 or 8 years.  But that is no reason for people not to take advantage of the situation now.

 

Also on the Cazoo site is a 2.0 diesel Jaguar F-Pace, registered in March 2020 (so a bit older) and priced at a very similar £26,400.  The PCP contract costs for that are deposit £10,000, 36 monthly payments of £252.24 and a final payment of £12,350.  Over 36 months if the car is handed back a cost of £19,080.64.  Based on those numbers, it seems the seller / finance company is basing their numbers on the i-Pace being worth more in three years time than the F-Pace.

 

Based on that it seems to me the i-Pace is a significantly better deal than the F-Pace, unless you are betting on the F-Pace being worth much more than the final payment of £12,350.  In fact I think I have just convinced myself to consider a BEV when we next look to change either my or my wife's car.

 

 

[Fireman Iain]

UKTJ, you've more or less gone through the same thought process I did when we bought Helen's electric car. I compared the 3 year cost, and the EV version had a higher guaranteed future value than the equivalent petrol. Making the monthly contract price less. Direct comparison of the same age, mileage and model, only difference was the power system.

 

The EV costs a lot less to maintain, a little more to insure, and for Helen's mileage, she'll save about £90 every month by charging at home once a week instead of filling with petrol every fortnight.

 

3 years down the line, she'll change cars and we'll look again at all options. 

[digger]

Hi Fireman Ian, I am not against EVs per se. However, I don't think they are especially environmentally  friendly.

However, I do object to vehicles claiming to be safer through technology, when they are clearly downright dangerous, in my actual experience. 

I also believe that generally my motoring is a lot cheaper than many and I have no wish to change. I also object to an industry which is continually trying to make me do so!

[UKTJ]

1 hour ago, digger said:

Hi Fireman Ian, I am not against EVs per se. However, I don't think they are especially environmentally  friendly.

However, I do object to vehicles claiming to be safer through technology, when they are clearly downright dangerous, in my actual experience. 

I also believe that generally my motoring is a lot cheaper than many and I have no wish to change. I also object to an industry which is continually trying to make me do so!

There was an interesting piece I heard on Radio 4 a few years back.  A listener asked whether changing their oldish 'gas guzzler' for a brand new EV was a good idea in terms of finances and the environment.  In short the answer was that it would take many years to offset the cost and carbon footprint of the new vehicle.  I think there is little doubt that keeping an old vehicle going is likely to be cheaper and more environmentally friendly than a brand new EV.  But as Iain says, few will be up for that.  And, the radio 4 analysis was a brand new EV versus an old ICE vehicle, having now looked at second hand EVs (thanks to Iain mentioning it) it does look like a like-for-like EV versus ICE comparison on a PCP scheme very much favours the EV in terms of cost.

 

I don't think the technology issue you raise exclusive to EVs, it is as true of ICE vehicles and hybrids.  Personally I think, theoretically, many of the types of system I believe you are referring to would increase safety if they worked as intended, but from what you have said about your recent experience the execution does not appear to be flawless.

[digger]

HI UKTJ. Yes correct, our car with the tech issues was a petrol and the systems may well be ok if they had worked correctly. They were grossly oversensitive or distracting. Sadly the brand was one of our 5 best and is no longer!

Re your first para, it seems the same old principles still apply.  Not so long ago they were always on about depreciation. Eg  Mercs always promoted how they depreciated less than other brands . Maybe so but assume at the end of the day if one paid 50k for a Merc and 30k for an alternative. Then if the Merc after 3yrs  depreciated  30% and the alternative say 40% then the Merc still lost one 3k more which could have been put to better use. Added to that whatever car you have , when you consider trading in, the dealers always offer rock bottom. Funny that on a trade auction site the same car fetches a lot more, double for our old Suzuki to be precise!

We have owned many brands,  premium and otherwise . Our first consideration is reliability and comfort. in our actual experience, both with privately and company owned cars , the brand has little to do with either! Bad reliability and backache  immediately raise the cost of the car one way or the other!

[Fourpot]

On 19/03/2024 at 15:38, UKTJ said:

I think that depends on the structure of the purchase plan.  I am no expert but I thought there were at least a couple of options.  One where you are literally just leasing the vehicle for a monthly charge, at the end of the contract period you hand the vehicle back and decide what you want to lease next.  That is what I recall was suggested when we were looking at a BEV some time ago (encouraged by the very adventageous BIK rates).  Alternatively you can pay a deposit, followed by x months payments, with the vehicle having a pre-determined contract value at the end of the contract term.  If the vehicle is worth more than this pre-determined amount the 'purchaser' can in effect buy at the lower pre-determined value and immediately trade in for another contract with the difference between the contract and market values providing some or all of the deposit required.  I think what you are referencing is the latter of these two models.

 

I have no personal experience, but I do know a fair few people who have entered into the latter type of contract for ICE vehicles.  In some cases the scenario outlined above played out and they had a surplus of value so bought the car at the end of the contract, but in others the market value was well below the contract value so they just handed the vehicle back to the dealer and left them with the shortfall.  Which of the two outcomes happens is very much determined by the market for second hand cars in general and the specific model in particular.  If all BEVs that reach that point are valued well below the contract value then it will play out very much as you describe.  But, in the short term at least, as you say the dealers will be as big of a loser as the customer.

 

As an example to illstrate the point I think we both agree on, I have just looked at the Cazoo website and to keep it relevant to this thread have found a Jaguar i-Pace registerd in December 2020 for sale at £26,850, so just over three years old.  I can 'buy' that on a PCP contract which is structured as a deposit of £10,000, 36 monthly payments of £211.54 and a optional final payment of £14,737.  If at the end of the three years the car turns out to be worth nothing I would just hand it back, at that point I would have paid Cazoo £17,615.44 for the use of the car for 3 years including the cost of borrowing money from them.  If the car really is worthless, as you say the company (dealer or finance company, not sure which) ends up well out of pocket.

 

I agree that if the scenario shown in the example above does play out across the board then financing costs will be adjusted to reflect a residual value of zero after 7 or 8 years.  But that is no reason for people not to take advantage of the situation now.

 

Also on the Cazoo site is a 2.0 diesel Jaguar F-Pace, registered in March 2020 (so a bit older) and priced at a very similar £26,400.  The PCP contract costs for that are deposit £10,000, 36 monthly payments of £252.24 and a final payment of £12,350.  Over 36 months if the car is handed back a cost of £19,080.64.  Based on those numbers, it seems the seller / finance company is basing their numbers on the i-Pace being worth more in three years time than the F-Pace.

 

Based on that it seems to me the i-Pace is a significantly better deal than the F-Pace, unless you are betting on the F-Pace being worth much more than the final payment of £12,350.  In fact I think I have just convinced myself to consider a BEV when we next look to change either my or my wife's car.

 

 

I worked in sales at a Triumph Motorcycles dealer for a couple of years from 2014. the PCP thing was quite new. Triumph worked with Black Horse as the financer, who were quite good. They even allowed some non-Triumph modifications, so long as it didn't detract from the value. The system works if you are the kind of person who wants a new vehicle every three (or five) years, but we were always concerned that the temptation of low monthly payments would be the undoing of people. We were at pains to be completely open about the pitfalls and the guaranteed final value and final payment and so on, with the result that a lot of customers would go with ordinary finance (or get a bank loan) even if it meant less commision for us.

Mrs Fourpot nearly got stung by a Mitsubishi dealer, who hadn't followed the rules on explaining the process and the GFV/final payment thing. She had her decent, paid for, L200 Warrior pick-up as a trade-in to get a newer one, until I pointed out that iif she kept her old truck then in three years she'll still have a decent L200 Warrior and owe no-one anything. With the PCP deal, she'd have had a newer truck for three years and then be empty-handed. I can't write what she said to the sales guy when we both went in. No Deal Noel.