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What is the difference between the GFV (guaranteed future value) referred to by KevK and others in this thread and the OFP (optional final payment) which has been quoted in PCP deals for several years now as well as on my two year PCP?
Nothing. I believe the two are one and the same, interchangeable, both refer to optional balloon payment.

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Oracle Finance -
Car demand to outweigh supply?

Following confirmation last week that car dealerships could sell vehicles from an online capacity and deliver them, many dealerships have received a surge of new enquiries.

With car manufacturing on hold, when lockdown ends demand for new cars will very quickly outweigh supply. Whilst many manufacturers may offer incentives initially to hit the ground running, these will probably be found unnecessary
 

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It will undoubtedly take some time for manufacturing to restart, but there are signs that this might happen before the rest of the world is ready to buy cars. Company cars and leasing companies may take some time to get contracts moving again as it may not be a high priority to get Mr Wilkins in Accounts his new Jaguar.

In addition, there are huge stocks of brand new vehicles that haven't moved for the past 6 to 8 weeks. At least one EU manufacturer has 6 weeks stock already imported to the UK, sitting on the docks on the River Humber, plus similar volumes at the port of departure.
It will be a very confusing picture for the first few months, but I agree that the industry will have the clear intention of maintaining profit margins - or even increasing them - by holding prices and withdrawing incentives.

As for online orders being delivered directly to customers, the limits will be set by the logistics network, the ability of import prep centres and dealerships to PDI vehicles under "Social Distancing" measures, and ultimately the availability of delivery drivers, all of which are finite and limited resources.
 

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What is the difference between the GFV (guaranteed future value) referred to by KevK and others in this thread and the OFP (optional final payment) which has been quoted in PCP deals for several years now as well as on my two year PCP?
The GFV used to be used for a trade in minimum value against a new car. I believe but could be wrong, that the GFV in some case ended up being quite a bit higher than the true value of the car and led to the dealers losing out in a trade.

On my last car, a Volvo, there was no GFV, just an optional final payment. They wouldn't value the car anywhere near the OFP for trade in purposes. I would have had to fund an extra £2000 to cover the difference. So it was a no brainer, I just let the car go back to Volvo(Santander) and got an S60 on PCH for 18 months.

I think the wording although only subtly different means quite a big difference. If you have GFV then that should be the minimum trade in value of that car, not so with OFP
 

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There used to be equity in a pcp car at the end of the term which formed the deposit on the next car.
 

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Discussion Starter #106
I had about £3k equity in my Giulia 2.0 when I paid off the final balloon payment in January. Most valuation tools are still showing my car roughly the same value minus the 3 months of depreciation. Not sure if the book prices will be updated, I doubt it.
 

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Yeah the Giulia seemed to be holding up pretty good wrt resale value. I paid over the odds on monthly payments by bumping the mileage up a bit. That way I should have a bit of equity in the car to give me more options.
 

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The price guides have decided to hold the levels of values to give the dealers some hope of breaking even some time. If trade values go down then so does the equity and possibly new car sales.
 

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Logic tells me that there SHOULD be some great deals to be had. But I also fully understand why the dealers would try to collectively keep the offers fairly conservative. They have taken a huge hit from this lockdown and they need to keep margins as high as possible to recoup lost revenue. Maybe as the new 2020 cars start flowing any leftover 2019 cars maybe going for a steal!
 

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The value of the car you’re trading in becomes lower due to increase in supply and new looks more appealing so demand for it reduces!
The 535 was surely to make people keep the cars longer and make it easier to sell privately, still under warranty.
 

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The 5-3-5 was a marketing ploy to sell more cars period. They don't want me or anyone else keeping hold of our cars. They'll happily see customers trading in every 2 to 3 years.
 

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I think the car at 3 years old becomes more attractive both for private buyers to keep because it’s got a warranty and because that warranty makes it easier to sell. That , I believe could be a plan, reducing all the cars coming onto the market at 36 months. The latest MGFV figures look a bit lower for 4 years from now and discounts will have to equal this drop if the monthly figure is not to increase.
Eg. Giulia Nero goes from list price £31k to £12750 MGFV at 48 months from now.
 

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Discussion Starter #115
My 2.0 Super was £12750 after 36 months 3 years ago from a list of £31k for 10k miles pa.
 

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That’s a year less to depreciate the same amount. Without any significant change to the MY that’s either extra discount or drop the price.
 
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