Falling residuals

[Discoman]

I ordered a T5 XC90 in June and got it last month. It is my first Volvo and I am really happy with it.

One thing I have noticed, though, is how much the GFVs on the PCP finance have collapsed of late. Mine is £23838 at four years/10k miles pa but now it is listed at £20816. Also they have now listed the B5(P) as its replacement and that costs another £850.

These cars are getting a lot more expensive to finance in only a short period of time. I am sure that this happening with other brands too but it's a circular argument of falling confidence - falling demand so falling residuals do falling demand...and repeat.

PS The B5(D) is even worse - costs £1k more than the T5 but residuals are £1.6k less.

[Quacker]

It is a reflection of the general finance market where PCP future values have been set somewhat too high over the last few yeas for all cars. It represents a debt that the finance company holds and many are in negative equity by all accounts. I know that my PCP balloon has been set ridiculously high, which was good for monthly payments but makes it too expensive to buy outright at three years old.
I will try an negotiate it down, because I do like it and want to keep it, but not at any price.

[Clan]

Originally Posted by Discoman

I ordered a T5 XC90 in June and got it last month. It is my first Volvo and I am really happy with it.

One thing I have noticed, though, is how much the GFVs on the PCP finance have collapsed of late. Mine is £23838 at four years/10k miles pa but now it is listed at £20816. Also they have now listed the B5(P) as its replacement and that costs another £850.

These cars are getting a lot more expensive to finance in only a short period of time. I am sure that this happening with other brands too but it's a circular argument of falling confidence - falling demand so falling residuals do falling demand...and repeat.

PS The B5(D) is even worse - costs £1k more than the T5 but residuals are £1.6k less.

It is hardly falling demand , volvo sales are up up up in the last 5 years incredible results up at least 10% each year whilst other brands are falling ...

[dghdgh]

I agree Volvo sales are up and residual values down. It may be that the list price is discounted by vast margins leaving a car with a list price of 40K worth 21K after 18 months. I would add with 7k miles. Working on this at 3 years it would have been worth around 10k at best. I ve walked away from Volvo because of this.

[Bendolfc]

More sales = more used cars available = lower residuals.

[roundyuk]

Originally Posted by Bendolfc

More sales = more used cars available = lower residuals.

What he said LOL - simple supply and demand affecting prices.