After months of uncertainty, the automotive industry is finally opening its doors so customers and workers can return to showrooms and workshops.
While many members of public are hoping for a great deal from an industry that is struggling, the dealerships may have other things to consider before handing out 50% off! As the car market sells over 90% of new cars on finance, the finance providers (often in-house manufacturer providers) won't be ready to hand out large discounts on cars. The used market has stayed in good form over the last few months with few cars being sold but few cars being driven - and so depreciation has slowed temporarily. This is good news for everyone, if the used car market had taken a turn for the worse, the residual values would be heavily affected.
Not all car finance is at the cheapest it could possibly be. Due to finance providers being overly cautious to estimate the final balloon payment of PCP deals (residual values), there is often a large amount of over-paying on the monthly sum. This in-turn does lead to having equity in the car so you can use this to purchase your next car. But you are effectively financing the deposit for your next car with this method and for those who'd like to keep monthly outgoings to a minimum, this is less than ideal.
Those wanting to not overpay on the monthly payments of cars will have to get the final balloon payment to be the exact amount of the cars value at the end of the term (residual value). This is an extremely hard value to predict. Each make depreciates differently and each model within that make may or may not do better than other models. So how do you predict these values?
At Brego, we use artificial intelligence to analyse hundreds of millions of data points in order to predict the market of depreciation. Each day we collect data from hundreds of sources in order to produce values that are extremely accurate to the residual value of the car. We work with finance companies to produce accurate finance agreements so you, the car buyer, gets the lowest monthly payment possible.
Contact us to learn more or to have a chat! We love talking about cars and are happy to offer as much help as possible.