Future Equity in Diesel - Time to go back to Petrol?

[AJAMESR]

Hi guys, looking for some thoughts. 

I am currently in a MY16 VRS Diesel. Its got about 20K  and I'm 18 months into a 0% PCP deal with 18 months to run. Absolutely love the car and don't need to change anything. 

However, I am wondering about the  hit that Diesel cars might take over the next 18 months if steps are taken to dissuade people from buying diesel. Perhaps Tax hikes, more tax on fuel, bans in city etc etc.

Would your next car be a diesel? Is it time to switch to PHEV or back to Petrol until the PHEV or full Elec is more developed?

 

And the only reason I am seriously considering it now is while SKoda here in Ireland still has 0% on offer until the end of March. 

I also recently looked at and considered a BMW 330e M Sport. BMW are currently offering 9% of (until end of March) and the government kicks in a further 7500 in grants because its PHEV. Brings a 54000 car down to about 40800 - But for various reasons my heart is not fully in that option.

The VRS I have spec'd and would like to switch to comes to about 43000, more expensive than the BMW, but the 0% finance with Skoda, the more extras in the car and the space kinda make it worth paying a bit more, and I think the are a better looking car. 

 

The other thing is what I paid for my VRS 18 months ago compared to what they cost now:

18 months ago:  33,497 with 1446 extras = 34,943

Now today: Same spec'd car cost 36,606 - 1663 more for the same car!!

I have to pay 271 for Performance Mode Select, surely that should be standard on a VRS, I'm pretty sure it was on my one 18 moths ago (at least it doesn't show as an extra in my original spec sheet) and I can't get folding mirrors unless I pay 622 for memory seats. And the standard cruise control is not an option unless I get the €152 extra HEATED steering wheel (which in the image they have is not flat bottomed)  - and I can't get the steering wheel unless I also get the heated front seats for €229. 

And when I say "can't" I don't mean "I can't bring myself to do it, if i have that, I have to have this" - I mean CAN'T in the true sense of the word, the online system will not allow me to add one without also adding the other. Its forcing options on me. 

So yehh the same car, albeit with Mem Seats, heated front seats and heated steering wheel (all of which I don't want) but I have to get if I want folding mirrors and standard cruise control - costs over 1663 more than 18 months ago. 

Thats just Diesel for Diesel. 

Add the petrol engine in to the mix and the car comes up to - wait for it - 41474 - same story here as well, can't get basic cruise control without getting heated steering wheel and that only comes if you get heated seats. 

None of those even include lane departure, sat nav,  an alarm, hill control, heated screen, ALA,  - all optional extras. But then again I don't have any of those at the moment and I manage fine :-)

 

So, on the face of it, and if a big stir wasn't being caused around Diesel at the moment, I wouldn't be thinking of doing anything. I'm very happy with what I have. But long term, and I mean when I reach the end of the next 18 months ( so not that long term) what am I going to do? Pay the GMV and keep the diesel? How quickly will it devalue? 

If I decide at the end of the PCP to trade in and go again, I think I would be switching to petrol or PHEV but what trade in will I be getting then on a diesel?

 

Salesguys will just hammer you with "Ohh diesel is hard to sell now, its not desirable, its not in vogue" - yet while selling them on they will be like "Oh Diesel has plenty years left in it yet, not much is going to change overnight, it won't make any difference to you"  

 

Is it time to switch now, while there may be some trade in value ( although only being 18 months into a PCP I have probably just covered the initial depreciation so far) BUT I could take advantage of the 0% and have that running for another 3 years instead of whatever happens to be available when I HAVE to make a decision in 18 months time. 

 

Anyone else having similar dilema? Anything I'm not thinking about? Is it worth switching to petrol from diesel or is it all a storm in a teacup?

 

Appreciate any thoughts.

 

 

 

 

 

[SashaGrace]

Surely it makes no difference to you on a PCP? Just hand it back at the end, if it’s worth more than the GMFV in your agreement you’ll be profit, if it’s worth less VWFS will take the hit. Then consider your options at that point. Unless there’s an imposed diesel tax coming in your area right now, or in the next few months that would make running your current car more expensive, why not leave it until the end of the PCP?

[Kahunajb]

£43k for a VRS, did I read that correctly?

 

It seems to me you would take a big hit now switching.

Edited 25 February, 2018 by Kahunajb

[bigjohn]

I'd carry 

7 minutes ago, AJAMESR said:

 

Is it time to switch now, while there may be some trade in value ( although only being 18 months into a PCP I have probably just covered the initial depreciation so far) BUT I could take advantage of the 0% and have that running for another 3 years instead of whatever happens to be available when I HAVE to make a decision in 18 months time. 

 

 

 

No harm in asking the dealer but I'd guess you won't have covered the initial depreciation and you probably never will. Many people are having to walk away from their PCP at the end as the car is worth less than the GMV - diesel depreciation has been savage recently. I'd stick with your existing 0% PCP

 

 

 

[skidpan]

No point changing until the end of your contract, you will only loose money.

 

When you change do the sums and get which is best for you.

 

We bought our last diesel in 2010. We loved them for performance and economy but I saw the writing on the wall in 2013 especially with DPF being unsuitable for our lower mileage so went back to petrol with a Leon 1.4 TSi 140 PS. It drove better than any diesel and did 45 mpg for the 4 years we had it. The best diesel we had only did just over 50 mpg and y=that had 25 less PS under the bonnet and was slow in comparison. Since then have swapped the leon for a Superb 1.4 TSi 150 and yesterday I ordered a Fabia 110 PS TSi for the Mrs.

 

If I was doing the mileage diesels may still be the answer but since petrols are much nicer to drive I suspect it would be a tough decision. 

[bigjohn]

4 minutes ago, Kahunajb said:

£43k for a VRS, did I read that correctly?

 

Sorry didn't read it all but seems to me you would take a big hit now switching.

 

Euros

[bigjohn]

Another thought - I'd let the new petrol GPF technology that is being introduced for Euro 6 c/d bed in. It's still just about possible to buy a car without it but I think the pre GPF engines have stopped being manufactured as GPF is compulsory from June 2018.

 

Remember when DPF's first came out, some initial bolt on implementations weren't great (eg pd VRS!). Saying that GPF's only use passive regen due to the hotter combustion temperatures so should be simpler

[AJAMESR]

9 minutes ago, SashaGrace said:

Surely it makes no difference to you on a PCP? Just hand it back at the end, if it’s worth more than the GMFV in your agreement you’ll be profit, if it’s worth less VWFS will take the hit. Then consider your options at that point. Unless there’s an imposed diesel tax coming in your area right now, or in the next few months that would make running your current car more expensive, why not leave it until the end of the PCP?

 

Yehh I had considered that, won't be at any loss in the sense that the GMV is there as a protection ( good thing about PCP) but it would be nice to hold on to some equity if possible. And at the end of the PCP deal its hard to know if 0% will be on offer again at that point - thats worth quite a bit.

I've been told that the 0% offers are rotated in such a way that the majority that take it out and then hold on 3 years won't have a 0% to jump into again. I'm not sure if thats true, but on the face of it it would make sense that they would rotate it that way. So if I wait, and then still want to go to petrol, if 0% is not available that will cost me also, and I might well have no equity at that point either if Diesel takes the expected dip. So I'd need a serious deposit again and possibly no 0% offer to take advantage of. 

 

And I wouldn't just be switching to petrol, in fairness the 245 Petrol costs a bit more for other reasons also, you are getting more car for you money. So its not just a diesel v petrol comparison when comparing the two. I would be "Upgrading". 

[AJAMESR]

1 minute ago, bigjohn said:

Another thought - I'd let the new petrol GPF technology that is being introduced for Euro 6 c/d bed in. It's still just about possible to buy a car without it but I think the pre GPF engines have stopped being manufactured as GPF is compulsory from June 2018.

 

Remember when DPF's first came out, some initial bolt on implementations weren't great (eg pd VRS!). Saying that GPF's only use passive regen due to the hotter combustion temperatures so should be simpler

Hadn't though of that - I'd have to see if thats the case.

 

[AJAMESR]

15 minutes ago, skidpan said:

No point changing until the end of your contract, you will only loose money.

 

When you change do the sums and get which is best for you.

 

We bought our last diesel in 2010. We loved them for performance and economy but I saw the writing on the wall in 2013 especially with DPF being unsuitable for our lower mileage so went back to petrol with a Leon 1.4 TSi 140 PS. It drove better than any diesel and did 45 mpg for the 4 years we had it. The best diesel we had only did just over 50 mpg and y=that had 25 less PS under the bonnet and was slow in comparison. Since then have swapped the leon for a Superb 1.4 TSi 150 and yesterday I ordered a Fabia 110 PS TSi for the Mrs.

 

If I was doing the mileage diesels may still be the answer but since petrols are much nicer to drive I suspect it would be a tough decision. 

Yehh I'm not really doing the milleage to make the diesel a necessity, switching to petrol would hit me only slightly in overall fuel costs and road tax. 

 

"No point changing until the end of your contract, you will only loose money." - 

Thats what I'm trying to figure out. I might actually save myself a bit in the long run, if I go now because I am getting the 0% which may not be available in 18 months time - in fact PCP % rates might take a bit of a hike by then as they try and get people to buy some of the second hand cars flooding the forecourts at the point. 

It will cost me to change, I have accepted that, but I will be getting a more premium car in the 245 and maybe protecting myself against the potential hit diesel could be in for. All while getting that 0% for another 3 years. 

And I kinda accept that I'll be losing money one way or another :-) Thats the life of buying new. But I am wondering if switching to petrol now might minimise my loss. 

 

 

[maul]

Already nobody wants diesels the second hand market is awash with diesels that the salesmen can't shift. I think buying a second hand diesel will get you a huge spec for very low money and that trend will just increase. Many manufacturers are on the verge of dropping diesels from their ranges. Porsche being a recent announcement of no more diesels in the motoring press.

at the end of your contract your diesel will be worth a lot less than the sums calculated at the start of your contract.

[classic]

For an example I just bought a 64 plate 1.4 tsi se estate. Could have got a 16 plate diesel SE L for the same price ...

Edited 25 February, 2018 by classic

[AJAMESR]

1 minute ago, maul said:

Already nobody wants diesels the second hand market is awash with diesels that the salesmen can't shift. I think buying a second hand diesel will get you a huge spec for very low money and that trend will just increase. Many manufacturers are on the verge of dropping diesels from their ranges. Porsche being a recent announcement of no more diesels in the motoring press.

at the end of your contract your diesel will be worth a lot less than the sums calculated at the start of your contract.

 

Thats what I am worried about. I'll chance my arm tomorrow and see if there is any equity in my current position - I currently have about 20,000 of finance left on it I think and it cost 35K new. So did it lose 15K in 18 months? That would be steep, and if it has, I imagine its not going to slow too much. 

 

So I think most would agree that if buying a new car again, no one would buy diesel. 

 

[SimonD316]

I’m in a similar situation. I’m 2 years into a 42 month PCP on a tdi VRS. I’ve already conceded the next one will be petrol partly because my mileage has dropped massively, and partly because I can see taxes changing on Diesels.

 

For the last few weeks we’ve not been able to factory order the TSI VRS, although the indications coming from the geneva motorshow are orders will start again over the summer for a higher PS car.

 

It’s very much wait and see really, current plan is to order november/december time.

 

 

[maul]

have a look at parkers.co.uk they are pretty good at current values. also autotrader will show current values 

[Ozzy25]

I was having similar thoughts as you regarding changing to Petrol. Had a Diesel Golf Estate 152 reg on 0%. Thought it was a bit underpowered so was looking to get a Golf GTD Estate. Unfortunately Ireland do not sell the GTD Estate. So started looking around. Had a test drive of 2 Golf GTE (hybrid) but they were in the €50k region before any grants. Boot was tiny and the battery charge literally lasted a few minutes, not even double figure minutes. So hybrid was out for me. Then looked at Skoda Estate. Diesel 184 and Petrol 230. Back of my mind I knew Diesel was now going to be shunned by governments so decided to go for the Petrol 230. "Sorry", I was told. They are no longer supplying the 230, you have to go for the newer 245. Think this was roughly €5k mor than the Diesel. GMFV after 3 years was only going to be €500 different between the Petrol and Diesel. So I went for the Diesel Estate 0%. No car tax increase or fuel increase for the next 2 years I think. Total was €41k which included Challenge Pack, Black Pack(VRS button, black 18" alloys, black grill and roof bars, 3 keys), DSG(hill hold), sunset glass, heated windscreen and front seats, front parking sensors. Cruise control is standard, but not adaptive cruise control. Flat bottomed steering wheel is standard. Folding mirrors are standard, but not dipping in reverse. 

[AJAMESR]

4 minutes ago, SimonD316 said:

I’m in a similar situation. I’m 2 years into a 42 month PCP on a tdi VRS. I’ve already conceded the next one will be petrol partly because my mileage has dropped massively, and partly because I can see taxes changing on Diesels.

 

For the last few weeks we’ve not been able to factory order the TSI VRS, although the indications coming from the geneva motorshow are orders will start again over the summer for a higher PS car.

 

It’s very much wait and see really, current plan is to order november/december time.

 

 

 

Yehh if I could be sure that 0% would be back again at the end of this year, begining of next year, I'd most likely hold on. That 0% is worth about 3 to 4K based on say 3.9% - 

And then the only variable would be how much of a hit the diesel value will take over that same period. I'm just a bit on edge with a diesel at the moment, and I've just had to accept that there is no cheap or easy way out - but when to jump?

[AJAMESR]

8 minutes ago, Ozzy25 said:

I was having similar thoughts as you regarding changing to Petrol. Had a Diesel Golf Estate 152 reg on 0%. Thought it was a bit underpowered so was looking to get a Golf GTD Estate. Unfortunately Ireland do not sell the GTD Estate. So started looking around. Had a test drive of 2 Golf GTE (hybrid) but they were in the €50k region before any grants. Boot was tiny and the battery charge literally lasted a few minutes, not even double figure minutes. So hybrid was out for me. Then looked at Skoda Estate. Diesel 184 and Petrol 230. Back of my mind I knew Diesel was now going to be shunned by governments so decided to go for the Petrol 230. "Sorry", I was told. They are no longer supplying the 230, you have to go for the newer 245. Think this was roughly €5k mor than the Diesel. GMFV after 3 years was only going to be €500 different between the Petrol and Diesel. So I went for the Diesel Estate 0%. No car tax increase or fuel increase for the next 2 years I think. Total was €41k which included Challenge Pack, Black Pack(VRS button, black 18" alloys, black grill and roof bars, 3 keys), DSG(hill hold), sunset glass, heated windscreen and front seats, front parking sensors. Cruise control is standard, but not adaptive cruise control. Flat bottomed steering wheel is standard. Folding mirrors are standard, but not dipping in reverse. 

 

Yehh like that I looked around at other makes - 

Merc - way too small inside and I HATE those vents in the dash. Did you know the shorten the back seats to make it look like you have leg room? 

BMW - Not as small as the Merc but still snug, and they lose value quick. And the grants towards the PHEV are great but you depreciation point starts at the price after the grant, so although the car is 54K on paper, really your depreciation begins at 40K which kinda takes the advantage of the grant out of it.

VW - I don't see the justification in the extra money over the Skoda - not enough difference in quality for my money. 

Just keep coming back to how impressed I am with the Octy and the value for money compared to other brands.  

Edited 25 February, 2018 by AJAMESR

[SimonD316]

13 minutes ago, AJAMESR said:

 

Yehh if I could be sure that 0% would be back again at the end of this year, begining of next year, I'd most likely hold on. That 0% is worth about 3 to 4K based on say 3.9% - 

And then the only variable would be how much of a hit the diesel value will take over that same period. I'm just a bit on edge with a diesel at the moment, and I've just had to accept that there is no cheap or easy way out - but when to jump?

 

When I bought mine I didn't have a huge deposit, and I had some negative equity from my old car so I know I'll struggle to change early without taking more negative equity with me. Currently would be around 3k. I know I'd get more from a private sale but am not in any rush to change so will wait it out.

[Ozzy25]

3 minutes ago, AJAMESR said:

 

Yehh like that I looked around at other makes - 

Merc - way too small inside and I HATE those vents in the dash. Did you know the shorten the back seats to make it look like you have leg room? 

BMW - Not as small as the Merc but still snug, and they lose value quick. And the grants towards the PHEV are great but you depreciation point starts at the price after the grant, so although the car is 54K on paper, really your depreciation begins at 40K which kinda takes the advantage of the grant out of it.

VW - I don't see the justification in the extra money over the Skoda - not enough difference in quality for my money. 

Just keep coming back to how impressed I am with the Octy and the value for money compared to other brands.  

I would have loved to have the GTD Estate. I still think VW are better quality than the Skoda. But VW put up their finance rate and Skoda had 0%. I was going to buy the Skoda on the 152 plate but at the time their interest rate was 3.9% I think. So I went for the VW @ 0%. And €5k extra for the Petrol upfront with only €500 return at the end swung it for me. 

[logiclee]

I took advantage of the current situation.

 

I already run two TSi's (Octavia and Yeti) but from next month need a motorway commuter to do 20k miles a year in so ideally diesel.

 

Some really good TDi deals about and you can find really high spec low mileage models much cheaper than a standard TSi. Not too bothered about residuals as in a few years it will have 100k miles and wouldn't be worth that much anyway.

 

So the current market does benefit those who are looking for a used diesel.

 

But for our main family transport I'll continue to buy new/nearly new TSI's.

 

For the OP, unless you can VT your current PCP it's going to cost you more to change your car early than keeping it the full term then looking around for a new deal even if you do have to factor in a bit of interest if the PCP deals are no longer 0%

 

Lee 

Edited 25 February, 2018 by logiclee

[bigjohn]

7 hours ago, logiclee said:

I took advantage of the current situation.

 

I already run two TSi's (Octavia and Yeti) but from next month need a motorway commuter to do 20k miles a year in so ideally diesel.

 

Some really good TDi deals about and you can find really high spec low mileage models much cheaper than a standard TSi. Not too bothered about residuals as in a few years it will have 100k miles and wouldn't be worth that much anyway.

 

So the current market does benefit those who are looking for a used diesel.

 

 

Hmm, 

 

Very good point, I took advantage of the previous situation (pre dieselgate - just) in that no one wanted a big petrol car so I bought rather cheap nearly new.

 

Going forward I suppose current Euro 6 diesels with DPF/SCR are now well developed/sorted and unless you do very small mileages these should be fine. The biggest unkown now is the future impact / reliability of the GPF - saying that the implementation on a petrol is much simpler. Watch this space - er forum.......

 

 

Edited 25 February, 2018 by bigjohn

[Vrs67]

9 hours ago, AJAMESR said:

 

Thats what I am worried about. I'll chance my arm tomorrow and see if there is any equity in my current position - I currently have about 20,000 of finance left on it I think and it cost 35K new. So did it lose 15K in 18 months? That would be steep, and if it has, I imagine its not going to slow too much. 

 

So I think most would agree that if buying a new car again, no one would buy diesel. 

 

I’ve had my diesel 4x4 for nearly 5 months now and we buy any car only offer £16500. It cost just under £29000 so that’s a £12000 lose in 5 months so chances of losing £15000 is very possible. Thankfully I have only leased mine so I’m not taking the hit 

[AJAMESR]

Dealer got back to me and told me Petrol VRS has been discontinued in Ireland. ALthough its still on the configuration options of website.  Why do I get the impression its been pulled until they sell out the current batch of diesels. 

 

This is exact info from Skoda to dealers:

“In recent weeks and months there has been unprecedented demand for the Petrol Octavia RS Limo & Combi models globally for the ŠKODA brand. We have also seen this trend here in Ireland.

Unfortunatley this has resulted in us having to close all Petrol Octavia RS model variants for ordering as we can no longer secure production.”

 

Edited 26 February, 2018 by AJAMESR

[MattChr]

PCP is protecting you from fall in market value below your agreed final value.

As it's voluntary, your position is in the dealer's hands - will they see your diesel car as difficult to sell on (less trade in value), or as an opportunity to clear unwanted stock (incentives etc)?

First 18 months will have been the worst for depreciation, with or without dieselgate. Only benefit of changing is if you're not in negative equity, saving more money from going down the drain?

Also in 18 months there could be more options from other manufacturers, like more affordable or more performance-oriented hybrids.