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      06-16-2011, 10:31 AM   #1
kmpowell
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Question UK values in 12-18 months time?

My order goes "spec confirmed" at the start of next week, which means my 1M will be mine, arriving July whatever happens! No backing out now unless I want to lose my deposit, something that isn't financially viable *gulp*.

Last minute jitters are cropping up, to the point where I have been looking at other slightly cheaper cars! My jitters are around values in 12-18 months time when I will likely come out of the car. Negative equity has bitten me before, but all the signs say that this car will be worth a good solid value in 12-18 months time due to limited production and availability?

Am I right? How do you estimate the values? Is 35k-36k an unrealistic target for 12mth, and 31-32k in 18mth?

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      06-16-2011, 10:52 AM   #2
as7920
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Quote:
Originally Posted by kmpowell View Post
My order goes "spec confirmed" at the start of next week, which means my 1M will be mine, arriving July whatever happens! No backing out now unless I want to lose my deposit, something that isn't financially viable *gulp*.

Last minute jitters are cropping up, to the point where I have been looking at other slightly cheaper cars! My jitters are around values in 12-18 months time when I will likely come out of the car. Negative equity has bitten me before, but all the signs say that this car will be worth a good solid value in 12-18 months time due to limited production and availability?

Am I right? How do you estimate the values? Is 35k-36k an unrealistic target for 12mth, and 31-32k in 18mth?

Congrats. Didn't know you were ordering one! Which colour?

My biggest concern is that it plummets like the Z4M Coupe. However I am in it for 4 years, so I'm sure it will even out.

12-18 months is a very short time scale and when it will take the biggest hit of course. Did you manage to get a discount?
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      06-16-2011, 10:53 AM   #3
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Wow ... why are you getting out of the car so fast?

I would assume that, since BMW is really hyping up the rarity and exclusivity of the car in the UK (No 'one of xxx plaques here in the US!), the car would hold its value.

Then again, I stopped trying to predict the future after a certain incident with a coin, an apex and a few beers.
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      06-16-2011, 10:55 AM   #4
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Quote:
Originally Posted by as7920 View Post
Congrats. Didn't know you were ordering one! Which colour?

My biggest concern is that it plummets like the Z4M Coupe. However I am in it for 4 years, so I'm sure it will even out.

12-18 months is a very short time scale and when it will take the biggest hit of course. Did you manage to get a discount?
Dont mention the Z4, great car but not one of my best financial investments. I think you need a crystal ball for 2nd hand values but lets hope in 3 years time i dont face the kind of depreciation i have seen with my Z
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      06-16-2011, 10:58 AM   #5
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No crystal ball of course, but the best advice I can give is to say that the best cars on sale now in their respective classes will have the best depreciation.

As the 1M gets the best reviews, it will hold it value better that all competitiors. Don't assume a cheaper car will loose less also.

What exactly that translates to, I don't know.

Ltd numbers and rave reviews are great but the fact that it hasn't sold out immeidately and the rocky world economy mean you just don't know.

Judging by the new 1er, I think the next 1M (2M) will be an evolution rather than revolution, so few worries about it upstaged by the new arrival, also helping residuals in approx 18 months.

However, every morning when I get into my car and start it up, any worries about depreciation quickly disappear.

Get it done!
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      06-16-2011, 11:14 AM   #6
as7920
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Judging by the new 1er, I think the next 1M (2M) will be an evolution rather than revolution, so few worries about it upstaged by the new arrival, also helping residuals in approx 18 months.
That's a point. If the new 2er looks anything like this, then the value of the 1M will most defintely go up!
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      06-16-2011, 11:23 AM   #7
desertfox73
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I tried thinking practically about this car once, too. Once. Then a friend of mine slapped me!

Given BMW's lease residual values (posted somewhere else in this forum), I think they're assuming the value will drop. Now...I can't say why that's the case. It could be that they expect lots of people to track the living daylights out of their leased cars and rack up lots of hard miles. Or, it could be that they know they are releasing this car at the end of the 1 series' life cycle (which is admittedly strange), and are protecting their dealers (who will have the replacement series in less than 24 months) against taking back a bunch of lease cars that are upside-down in value.

However, there is always the enthusiast factor, which no smart business would reasonably budget for (although they probably always hope for it in their best-case-scenario projections). This car seems to have a high enthusiast factor, and no shortage of enthusiasts. That factor alone could outweigh the other two I just described...and keep the value high.

Keep in mind, too, that in 12 months there will probably be very few used 1Ms out there, and certainly not enough to match the number of folks who are disappointed that they weren't able to get one.

Just my 2 cents.
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      06-16-2011, 11:24 AM   #8
kmpowell
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Quote:
Originally Posted by as7920 View Post
Congrats. Didn't know you were ordering one! Which colour?

My biggest concern is that it plummets like the Z4M Coupe. However I am in it for 4 years, so I'm sure it will even out.

12-18 months is a very short time scale and when it will take the biggest hit of course. Did you manage to get a discount?
I had one ordered since they first appeared on teh system (intent deposit was placed last year), but I bailed out when I found there was only going to be three colours and no limited run. I managed to re-instate my order though when the 450 was confirmed.

Spec is;
Alpine white
Bluetooth
Heated Seats
USB
Service pack (no brainer considering the cost of the run-in service!)

I'm just now really worried about residuals, and am not sure if I should do this or not. :!:

Discount was around 900 which they added into the p/x price of my car because BMW won't allow discount on the 1M.
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      06-16-2011, 11:26 AM   #9
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That's a point. If the new 2er looks anything like this, then the value of the 1M will most defintely go up!
Holy crap...that thing could also increase the value of my rickshaw.
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      06-16-2011, 11:59 AM   #10
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Well you shouldn't buy as an investment but an indication is that Hexagon have a second hand car which looks about list. Also Pistonheads claim to have sold one above list. My dealer thinks if he gets his hands on one in 6 months it will still be around list- obviously the person trading will get less but not bad

So I agree 450 cars and rave reviews should ensure good secondhand values. Next one will be a M2 or 2M but that wont be before 2013/14. M3 will go out of production in 2012 and new M5 is 75K!

It's a great car and amazing it gets the right sort of attention from people who take photos or just come over in a filling station for a chat- they normally ask is it as good as the reviews say!! Answer yes!!!!
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      06-16-2011, 12:49 PM   #11
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Plan to take ours back to Aus in a few years when we move back, they have an allocation of about 100 and a list price of Aus110k so no doubt in 3 years we could actually be in a better position perhaps........
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      06-16-2011, 01:04 PM   #12
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This is an issue I've been thinking about too because as a rule I never previously bought new cars because of the initial loss of value. Realistically, I will drive the 1M until I get tired of it or another car strikes my interest, which usually happens every 2-3 years. I am expecting this car to lose a lot of value during that time.

I personally don't think we should count on this car retaining its value any more than any other BMW. Who knows what else will be out within the next few years and what the comparable cars will be. Put yourself in a possible buyer's shoes - if you were looking into buying a car two years from now would you pay a lot for a used 1M or would you rather spend that money on something newer that has the latest features/tech and isn't styled off a discontinued model (i.e., the e8x 1 series)?

My guess is most people would opt for the newer car. Which is why I think the value of the 1M will likely drop considerably, just like other used cars. There may be a select few BMW enthusiasts that would be willing to pay more for a 1M but that segment is going to be very small. So you'd have to wait till one of those folks was able and willing to buy the car before you could sell it to them at a premium. Even then, I doubt such a person would be willing to pay much more than market value for the car. For example, how many people would actually be willing to pay over blue book for a Z4M right now?

"Collector car" has been thrown around a lot in reference to this car, but that status takes decades to be achieved. I doubt most of us will hold onto the car that long.
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      06-16-2011, 01:20 PM   #13
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If you're getting out every 12-18 months, you'll never out run negative equity IMO. This car might be different, but it's not a good financial move to dump new cars so quickly.
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      06-16-2011, 01:30 PM   #14
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If losing your deposit (around a grand?) isn't "financially viable" then surely you can't afford your monthly payment?

Once the buzz dies down in 6 months or so, maybe sooner, this car is going to depreciate like any other. There is a recession on after all.
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      06-16-2011, 02:05 PM   #15
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Depends also on how much mileage you plan on doing?!

A good example, high spec, low mileage car should still fetch good money i think around 12-18 months after launch, and more so because its a limited production car. I think there will be good demand second hand as many people have been unable to afford new.

Really depends on whether the market conditions worsen around us.
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      06-16-2011, 03:02 PM   #16
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Get out there drive it and enjoy it, that's why you bought it in the first place, as they say a car is really a liability rather than a investment, chucked my money into 2 properties for the investment side of things, now I offload it into a car I will enjoy owning and driving and selling is well down the track so will worry about what its worth then.

As for depreciation, we have been running a couple of hot hatches, that's when you see real depreciation driving out of the showroom lol

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      06-16-2011, 05:00 PM   #17
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Quote:
Originally Posted by gaz26 View Post
Well you shouldn't buy as an investment but an indication is that Hexagon have a second hand car which looks about list. Also Pistonheads claim to have sold one above list. My dealer thinks if he gets his hands on one in 6 months it will still be around list- obviously the person trading will get less but not bad

So I agree 450 cars and rave reviews should ensure good secondhand values. Next one will be a M2 or 2M but that wont be before 2013/14. M3 will go out of production in 2012 and new M5 is 75K!

It's a great car and amazing it gets the right sort of attention from people who take photos or just come over in a filling station for a chat- they normally ask is it as good as the reviews say!! Answer yes!!!!
Rarity alone does not mean instant collector status. Look how many Yugos made it to the states....is it a collector car? On the other hand, 64-71 Mustangs were made by the millions and they are collectors cars...Beetles were made the world over by the billions and they are collectors cars? Low volume means very little in reality. What matters is if a car strikes a generation of people. If it brings back memories, etc. Pontiac G8 had low numbers and great reviews....gone! too many urban myths going on. Cars are not an investment especially 12-18 months out. If you are willing to lose the money for the thrill of having it, buy it. If not, lease it or get out. You asked for the opinion si that is my 2 cents worth. Congrats and good luck.
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      06-17-2011, 06:26 AM   #18
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Interesting set of responses guys, many thanks!

Anymore for anymore?
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      06-17-2011, 06:53 AM   #19
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Come on Kev, surely you aren't going to let a bunch of random strangers who have no better ability to predict the future than you do decide if you can reasonably afford the car, after you've placed your deposit? :-)
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      06-17-2011, 07:15 AM   #20
kmpowell
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Quote:
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after you've placed your deposit? :-)
Sorry Clive perhaps i've not made myself very clear. The 'deposit' I'm talking about is the amount I will be putting in as a deposit for the finance, not the refundable holding deposit I have in place.

For example if I finance 40k (1K deposit), my settlement figure will be about 36k in 12 months.

If I finance 37k (4k deposit), my settlement figure in 12 months will be around 33k.

So... if the car in 12 months is worth 30k, then I will be 7k in negative equity in both scenarios. The negative equity is just shifted to other areas of the agreement. If however the car is worth 35k, then that negative equity is much reduced.

See where I'm coming from?

p.s I accept that my monthly payment is written off money. That is what I use as my depreciation monitor.
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      06-17-2011, 07:35 AM   #21
as7920
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Does that mean you will only go for a stripper rather than fully loaded Kevin?
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      06-17-2011, 08:00 AM   #22
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Kev's proposed spec is above - not quite a stripper, but almost.

I guess I am confused as "No backing out now unless I want to lose my deposit" and then saying you're talking about your finance deposit, which I assume you haven't paid yet as you've not taken delivery does indeed not make any sense

I think it is inevitable that if you plan to get out in 12-18 months you're putting yourself in the worst position. The finance company will want to make money out of you so your settlement figure will be poor and your finding the time period when depreciation will be highest. You don't have to do the math to do the math ;-)

If, as I beleive you've indicated, your other option is a TT-RS, my view would be that you're unlikely to lose more money on a 1M than a TT-RS./ If you're now looking at other, less outright purchase price, cars, then I'm sure you can find something that will cost you less over 12-18 months than a 1M or a TT-RS.
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