MG4 Depreciation

[kevinji]

You do need to be very careful with salary sacrifice if you have a contributory pension scheme. I contribute 8.7% but if I used salary sacrifice at a £300 monthly payment, that would reduce my contribution by £313 a yr, close to £1k on a 3yr lease, over a 35yr working life that is £12k loss of contributions in today’s money. That will reduce your pension when you retire, depending on the type of pension it could be significant in the long term if you manage to stay alive! It certainly doesn’t work for me on an index linked pension, It’s basically having the car cheaper now but paying for it in later life when of course you will want as much money as possible.

Fortunately I don’t have a contributory pension scheme as I’m close to retirement. But good to know.

 

[kevinji]

I had previously leased a Mercedes before so was inclined to lease as buying new almost involves significant depreciation so I did not look at the option of purchasing cash or PCP. With salary sacrifice I am effectively paying just over £300 pcm (including all maintenance and parts) for £15k miles pa. So the trophy is costing me £3.6k per year which I think is way less than the depreciation if I bought it. Over 3 years it may even out a bit more but if you can get salary sacrifice leasing rather than buying it is a no brainer.

People buy new cars for various reasons other than financial considerations and i understand that but financially, if you can do it, leasing by salary sacrifice is far better.

By way of an update, I have just been made redundant but may be employed by another company and they are trying to novate the lease to the other company. So this is a downside to salary sacrifice that I did not consider.

 

[Allen1946]

I bought my MG4 LR 18 months ago for £28.5k with £7k down, so £21.5k credit to pay + about £3.8k interest over 36 months (7%), £15k guaranteed at the end. Asked for a settlement fee the other day, 18 months in, and that was £19.5k. Can't find an offer over £20k anywhere for the car, so essentially it looks like I've lost my £7k in 18 months and am now worried I'll only just about break even in another 18 months when it comes time to walk away. I have gap insurance but I'll lose 100% of the equity I have in the car - that strikes me as enormous deprecation, unless I'm missing something, not good at all.

I recently bought a MG5 trophy long range, 4 months old and thought I had a good deal with £11k off the new price but when I entered the registration on 'we buy any car' it valued it at £15.6k, less than half price!

 

[Deleted member 14627]

I bought my MG4 LR 18 months ago for £28.5k with £7k down, so £21.5k credit to pay + about £3.8k interest over 36 months (7%), £15k guaranteed at the end. Asked for a settlement fee the other day, 18 months in, and that was £19.5k. Can't find an offer over £20k anywhere for the car, so essentially it looks like I've lost my £7k in 18 months and am now worried I'll only just about break even in another 18 months when it comes time to walk away. I have gap insurance but I'll lose 100% of the equity I have in the car - that strikes me as enormous deprecation, unless I'm missing something, not good at all.

I have a PHIV TROPHY bought in August 2023 for £33.750 plus all the body and wheel protection. Have done 3300 miles and is still in showroom condition. Just been offered by a dealer in part ex £20,500 ! Disgusting depreciation.

 

[salty]

I have a PHIV TROPHY bought in August 2023 for £33.750 plus all the body and wheel protection. Have done 3300 miles and is still in showroom condition. Just been offered by a dealer in part ex £20,500 ! Disgusting depreciation.

Don't worry about it, can't do owt about it, just enjoy ya motor. ??

 

[unbornidentity]

I have a PHIV TROPHY bought in August 2023 for £33.750 plus all the body and wheel protection. Have done 3300 miles and is still in showroom condition. Just been offered by a dealer in part ex £20,500 ! Disgusting depreciation.

It will lose the VAT the moment you drive it away which is £6750. Body and wheel protection add no value just extra cost. Extra cost colours add nothing and adding options to factory cars add next to nothing.

If you don’t want depreciation don’t buy a new car. The MG4 is one of the least depreciating electric cars, especially in the SE SR. Get yourself a Mokka E and you’re looking at a world of pain.

 

[jakegeno]

I bought my MG4 LR 18 months ago for £28.5k with £7k down, so £21.5k credit to pay + about £3.8k interest over 36 months (7%), £15k guaranteed at the end. Asked for a settlement fee the other day, 18 months in, and that was £19.5k. Can't find an offer over £20k anywhere for the car, so essentially it looks like I've lost my £7k in 18 months and am now worried I'll only just about break even in another 18 months when it comes time to walk away. I have gap insurance but I'll lose 100% of the equity I have in the car - that strikes me as enormous deprecation, unless I'm missing something, not good at all.

I can say that it is quite normal for EVs, not that normal for ICE. What you're essentially facing is ~30% depreciation over 1,5 year. I did a bit of analysis and I can say that kind of depreciation on ICE would happen after ~3 years, at least for most of vehicles that I looked into: Car Depreciation Myths: the Future of EVs Value - EVhicle. The analysis is not perfect and covers only popular cars on the market, but it gives a rough overview of were we are now.
Unfortunately I also see that this will continue to happen for several reasons:
1. Governments manipulating prices of new vehicles (extra benefits for buying EVs)
2. China makes lowering prices, what makes all manufacturers to lower the prices, as more China makes are entering EU and US. As a result we get rapid prices drop for new vehicles and of course nobody wants to pay more for used car than for new one.
3. Fast new tech development, remember how it was with computers back in the 90s? So in general you won't pay just a little less for car that is enabling you 40-50% of range that a new one is allowing you to reach. Same with infotainment and self driving capabilities - the more such upgrades are introduced in new vehicles the less value stays in older ones.

Regarding the above UK might actually be in a better position in terms of depreciation as rest of EU are driving on the other side of the road, so things happening outside of UK (tax benefits) are not really affecting UK.

 

[johnb80]

I have a PHIV TROPHY bought in August 2023 for £33.750 plus all the body and wheel protection. Have done 3300 miles and is still in showroom condition. Just been offered by a dealer in part ex £20,500 ! Disgusting depreciation.

I've just looked on WBAC for a valuation on our September 23 MG5 Trophy with 2200 miles on it. We paid £32,500 and they offered £14,480, I'm so glad we went the PCP route with a guaranteed value of £17,000 at 4 years old.

 

[JonnyG]

I've just looked on WBAC for a valuation on our September 23 MG5 Trophy with 2200 miles on it. We paid £32,500 and they offered £14,480, I'm so glad we went the PCP route with a guaranteed value of £17,000 at 4 years old.

Yes, I'm in the same situation so will be keeping the car till the end of the PCP term at this rate !! I guess we'll have to make sure mileage is within the PCP agreed limit, all servicing is done on time and the car is kept in good condition ?

 

[johnb80]

Yes, I'm in the same situation so will be keeping the car till the end of the PCP term at this rate !! I guess we'll have to make sure mileage is within the PCP agreed limit, all servicing is done on time and the car is kept in good condition ?

Exactly, no point in doing anything else at the moment. In my view, its down to the media with the tripe they protray - batteries dead at 8 years and cost £20k plus to replace, hours added to a journey to recharge etc, cost of electricity at rapids and so on.

On the flip side of course, there must be a lot of cheap, nearly new cars on the market.

 

[lsb777]

Edit...this is for a 73 plate Xpower.

I just looked on WBAC (even though mine is salary sacrifice). Just under 4k miles and they said £20,275 - ouch! Not looking good for Tusker in 26 months. Maybe I'll get a good offer to buy it. Very poor offer on the previous lease. I could buy the Audi E-tron 50 for £29,205 in May 23. The actual car is on Auto Trader still after 3 months at £22,490. I had a lucky escape there!

 

[johnb80]

At the end of our 4 year PCP I will get some valuations and offer that to MG to keep the car rather than their guaranteed price, dunno if theyll accept that but one sure way to find out

 

[Tuareg]

Even if there is sizeable depreciation, in 7-10 years new EV prices will probably be a lot lower anyway. There will also be a big industry in upgrading batteries, motors, ECUs etc for existing EVs that are a few years old, it will be different landscape to the ICE world we see today. Batteries in particular will be much cheaper even in 5 years time

 

[Rolfe]

Even if there is sizeable depreciation, in 7-10 years new EV prices will probably be a lot lower anyway. There will also be a big industry in upgrading batteries, motors, ECUs etc for existing EVs that are a few years old, it will be different landscape to the ICE world we see today. Batteries in particular will be much cheaper even in 5 years time

That really is it, isn't it. I regard my SE SR as a consumer item that will do what I want it to do, hopefully for a good few years, and as it wasn't that expensive in the grand scheme of things, it might not be too much of a hit if I want to change it in the future for something that at present we can hardly imagine.

 

[Rolfe]

This is good.

 

[JonnyG]

I will go back to a Personal Lease if I purchase another EV again (most likely will).

Two year lease on an XPower will cost £10,547 at the moment (see below quote).

My car has depreciated by around £14,000 already in six months ???? based on the WBAC quote of £20,625.

 

[salty]

Never really contemplated a lease deal for an X Power. But there seem to be some good ones about. For example.
New Volcano Orange X Power.
24 month contract.
9 month payment = £2671.65
23 x monthly payments = £296. 85
Fees = £299.99
Total cost = £9799.19
I'd then sell my car for about £6000
Or I've spotted this.
73 reg Volcano Orange X Power £28999
Milage 2000. 4 months old.
Presume PX value for my car. £6000
Balance £22.999. Cash payment.
Must admit the lease deal does sound good. But I do like modding me cars, which you can't do with a lease car.
Mmmm, a bit of a quandary. ??
I know it's my decision at the end of the day, but what's your thoughts.

 

[Adam C]

Never really contemplated a lease deal for an X Power. But there seem to be some good ones about. For example.
New Volcano Orange X Power.
24 month contract.
9 month payment = £2671.65
23 x monthly payments = £296. 85
Fees = £299.99
Total cost = £9799.19
I'd then sell my car for about £6000
Or I've spotted this.
73 reg Volcano Orange X Power £28999
Milage 2000. 4 months old.
Presume PX value for my car. £6000
Balance £22.999. Cash payment.
Must admit the lease deal does sound good. But I do like modding me cars, which you can't do with a lease car.
Mmmm, a bit of a quandary. ??
I know it's my decision at the end of the day, but what's your thoughts.

I’m probably not the best person to advise you on what lease deals to go for. In my time I’ve been known to rush into things without giving it much thought, my wife says sometimes I have more money than sense ?

Now I’m more than happy with my Long Range & will definitely hold onto it for at least the 12 months but I’ve looked into the X Power & there’s some fantastic deals & who knows, 12-24 months & I might be tempted myself.

I’m sure you will look into it properly, financially, practically & if you can do it & you feel it’s good for you, why not?

 

[DaevM]

I traded in my Kia Soul 30kwh EV against the MG4. Bought from same dealer. Paid £17k for the Soul, trade in value £6.5k after 4 years. They've got it up at £11k ( vgc) ?.
I track my car values with 'we buy any car'. They were showing the Soul at £6.3k.
Thought I'd check the MG4 on we buy any car. SE LR, brand new. RRP £29495. Deal price £24k. 2 weeks in we buy any car price £18k. Now THAT'S depreciation!! ?.
Still, there was a point shortly after we bought the Soul that we buy any car were offering £21k ( covid & scarcity ?) . ?

 

[Tig170]

Don't also forget salary sacrifice (if available to you) - my work are currently offering: 36 months x £275 for a basic MG4 (or £300 for 12000 miles pa), which includes everything* (aside from the electricity),

*What's Included
Fully comprehensive insurance, including 4 additional drivers
Routine servicing
Tyre replacement
Breakdown cover
Vehicle excise duty (car tax)
Windscreen replacement cover
No deposit
No credit check
Monthly deductions taken directly from salary
On the road support from a dedicated Aftercare Team for the duration of your lease