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  • FIRST POST
    • jcderpton
    • By jcderpton 2nd Aug 17, 6:57 PM
    • 2Posts
    • 0Thanks
    jcderpton
    PCP change in circumstances
    • #1
    • 2nd Aug 17, 6:57 PM
    PCP change in circumstances 2nd Aug 17 at 6:57 PM
    Hi,

    I've currently around half way through a 3 year PCP. When I signed up my average mileage was around 6000 / year and while it was possible it could go up the dealer insisted I keep it at 6000.

    Due to a change in work circumstances I'm now having to drive to work, which is around 12000 miles / year for commuting alone, and the car isn't really built for motorway driving (1250cc Ford Fiesta petrol).

    I'd like to trade it in but I'm not sure if now's the right time. Curious to know what advice you could give me?

    Thanks
Page 1
    • bris
    • By bris 2nd Aug 17, 7:39 PM
    • 6,698 Posts
    • 5,747 Thanks
    bris
    • #2
    • 2nd Aug 17, 7:39 PM
    • #2
    • 2nd Aug 17, 7:39 PM
    If you're half way through you could look at the VT route which would get you out of the deal without negative equity on the car which it will undoubtedly have.


    You need to have paid at least 50% of the total finance agreement, so do the maths and see where you are. It is a way out and leaves you free to choose a new car.


    Another route is to approach a dealer to trade it in and start again but this will probably be sore on the wallet due to the value of the car compared to what you owe on it.
    • rjwr
    • By rjwr 2nd Aug 17, 9:30 PM
    • 247 Posts
    • 162 Thanks
    rjwr
    • #3
    • 2nd Aug 17, 9:30 PM
    • #3
    • 2nd Aug 17, 9:30 PM
    If you're half way through you could look at the VT route which would get you out of the deal without negative equity on the car which it will undoubtedly have.


    You need to have paid at least 50% of the total finance agreement, so do the maths and see where you are. It is a way out and leaves you free to choose a new car.


    Another route is to approach a dealer to trade it in and start again but this will probably be sore on the wallet due to the value of the car compared to what you owe on it.
    Originally posted by bris

    Usually a PCP deal means the half way point for VT is very close to the end of the original term. So may not be possible until month 30 or so.
    • jcderpton
    • By jcderpton 2nd Aug 17, 9:41 PM
    • 2 Posts
    • 0 Thanks
    jcderpton
    • #4
    • 2nd Aug 17, 9:41 PM
    • #4
    • 2nd Aug 17, 9:41 PM
    My repayments are quite small to I'm not going to be able to VT until month 34.

    But from you're saying it's best for me to wait it out then VT / trade in as close as possible to the agreement end date? That way I'd avoid the excess mileage charge.
    • rjwr
    • By rjwr 2nd Aug 17, 9:52 PM
    • 247 Posts
    • 162 Thanks
    rjwr
    • #5
    • 2nd Aug 17, 9:52 PM
    • #5
    • 2nd Aug 17, 9:52 PM
    I just got rid of our car. perhaps you can find out if thats an option for you
    • anto164
    • By anto164 4th Aug 17, 9:25 AM
    • 104 Posts
    • 47 Thanks
    anto164
    • #6
    • 4th Aug 17, 9:25 AM
    • #6
    • 4th Aug 17, 9:25 AM
    Perhaps phone the dealership, explain and see whether you can swap or make a deal?

    Or, get a loan, buy the car with it, then sell it and buy a new one outright with what is left?
    • phillw
    • By phillw 4th Aug 17, 10:12 AM
    • 674 Posts
    • 338 Thanks
    phillw
    • #7
    • 4th Aug 17, 10:12 AM
    • #7
    • 4th Aug 17, 10:12 AM
    Perhaps phone the dealership, explain and see whether you can swap or make a deal?
    Originally posted by anto164
    New plate comes out in September, there may be quite considerable deals that can be done on a new car.

    However I loath PCP with a passion.
    • MEM62
    • By MEM62 4th Aug 17, 12:25 PM
    • 1,268 Posts
    • 896 Thanks
    MEM62
    • #8
    • 4th Aug 17, 12:25 PM
    • #8
    • 4th Aug 17, 12:25 PM
    I loath PCP with a passion.
    Originally posted by phillw

    I agree. In the short-term it might get people into cars that they otherwise could not afford but in the long-term there are too many downsides. And you never end up owning anything!
    • antrobus
    • By antrobus 4th Aug 17, 12:52 PM
    • 15,033 Posts
    • 21,356 Thanks
    antrobus
    • #9
    • 4th Aug 17, 12:52 PM
    • #9
    • 4th Aug 17, 12:52 PM
    I agree. In the short-term it might get people into cars that they otherwise could not afford but in the long-term there are too many downsides. And you never end up owning anything!
    Originally posted by MEM62
    No, you do own the car. PCP stands for Personal Contract Purchase. The clue is in the name.

    Of course, PCP deals are structured so that most people choose to stop owning the car at the end of term, and start owning another one. But that's something else all together.
    • fromtheshires
    • By fromtheshires 4th Aug 17, 1:00 PM
    • 221 Posts
    • 154 Thanks
    fromtheshires
    I agree. In the short-term it might get people into cars that they otherwise could not afford but in the long-term there are too many downsides. And you never end up owning anything!
    Originally posted by MEM62
    PCP is very good if you know you can handle it. My example below;

    0% for 4 years at £100 a month then pay the remainder off / hand the keys back.

    I already had the cash in hand to purchase the vehicle outright but I now have 4 years of money earning interest in my accounts. I am keeping the vehicle at the end which may help but it all depends on circumstances. I wouldnt normally go for PCP but this was better than a pay equal installments for x amount of years deal as I have the cash in my accounts working for me for longer.
    • cjmillsnun
    • By cjmillsnun 4th Aug 17, 5:53 PM
    • 110 Posts
    • 63 Thanks
    cjmillsnun
    No, you do own the car. PCP stands for Personal Contract Purchase. The clue is in the name.

    Of course, PCP deals are structured so that most people choose to stop owning the car at the end of term, and start owning another one. But that's something else all together.
    Originally posted by antrobus
    You don't own the car until you make the balloon payment at the end.
    • antrobus
    • By antrobus 4th Aug 17, 6:17 PM
    • 15,033 Posts
    • 21,356 Thanks
    antrobus
    You don't own the car until you make the balloon payment at the end.
    Originally posted by cjmillsnun
    You don't technically own the car with a standard HP deal either until you pay the fee at the end of term. But as the accountants put it; 'substance over form' - it's your bl00dy car.
    • meer53
    • By meer53 6th Aug 17, 10:14 AM
    • 8,781 Posts
    • 12,755 Thanks
    meer53
    New plate comes out in September, there may be quite considerable deals that can be done on a new car.

    However I loath PCP with a passion.
    Originally posted by phillw
    Horses for courses. I'm on my 4th PCP car, it suits me fine. Low monthly costs, minimal maintenance costs and a new car every 3 years.
    • Tarambor
    • By Tarambor 6th Aug 17, 12:36 PM
    • 1,015 Posts
    • 693 Thanks
    Tarambor
    No, you do own the car. PCP stands for Personal Contract Purchase. The clue is in the name.

    Of course, PCP deals are structured so that most people choose to stop owning the car at the end of term, and start owning another one. But that's something else all together.
    Originally posted by antrobus
    No you don't own the car, the finance company does until the very last payment is made and the big bill at the end to own the car outright is made.

    If you own a car you are free to do with it what you wish including selling it or taking it to the crusher and turning it into a cube. Neither are options on a PCP deal without the lenders consent. If you have to get permission from someone else to do something with an article you have then you don't own it.
    • Tarambor
    • By Tarambor 6th Aug 17, 12:39 PM
    • 1,015 Posts
    • 693 Thanks
    Tarambor
    Horses for courses. I'm on my 4th PCP car, it suits me fine. Low monthly costs, minimal maintenance costs and a new car every 3 years.
    Originally posted by meer53
    You do know you're paying the largest bulk of the depreciation every 3 years? Someone can buy that car at 3 years old for 1/3 of what you paid for it and have a very good car for the next 3 years and save a fortune. And given that they could be a cash buyer then they're not going to be like many posters on this board and royally shafted if their circumstances change.

    Yes you MAY save in maintenance costs but then again you might not but the few hundred quid you save are dwarfed by the several grand you've set fire to in depreciation.
    • antrobus
    • By antrobus 6th Aug 17, 1:28 PM
    • 15,033 Posts
    • 21,356 Thanks
    antrobus
    No you don't own the car, the finance company does until the very last payment is made and the big bill at the end to own the car outright is made. ...
    Originally posted by Tarambor
    I'm aware of the legal formalities that lenders impose to ensure their security. It doesn't change the fact that it would be your car, and all the economic benefits and costs of ownership are yours.

    Which is why, if you are a business and buy a car on HP or BCP, HMRC dictates that you claim capital allowances on the asset you have acquired. And why accountants insist that you stick it on your balance sheet as an asset.

    Substance over form, remember.

    ..If you own a car you are free to do with it what you wish including selling it or taking it to the crusher and turning it into a cube. Neither are options on a PCP deal without the lenders consent. If you have to get permission from someone else to do something with an article you have then you don't own it.
    Originally posted by Tarambor
    The exact same things could be said of a mortgage.

    What I would say is that prattling on about 'never owning a car' that is on PCP is neither helpful or meaningful to anyone. What is both helpful and meaningful is to understand that it is a way of buying a car on finance with a balloon payment at the end that matches the guaranteed trade in value offered by the manufacturer.
    • meer53
    • By meer53 6th Aug 17, 8:52 PM
    • 8,781 Posts
    • 12,755 Thanks
    meer53
    You do know you're paying the largest bulk of the depreciation every 3 years? Someone can buy that car at 3 years old for 1/3 of what you paid for it and have a very good car for the next 3 years and save a fortune. And given that they could be a cash buyer then they're not going to be like many posters on this board and royally shafted if their circumstances change.

    Yes you MAY save in maintenance costs but then again you might not but the few hundred quid you save are dwarfed by the several grand you've set fire to in depreciation.
    Originally posted by Tarambor
    I never pay the balloon payment at the end, i just swap it for another car. The last 2 i've swapped after 2 and a half years. It suits me to pay between £120 and £150 per month for my car and not have to worry about depreciation or maintenance costs. It might not suit everyone but it's fine for me.
    • MEM62
    • By MEM62 11th Aug 17, 9:25 AM
    • 1,268 Posts
    • 896 Thanks
    MEM62
    No, you do own the car. PCP stands for Personal Contract Purchase. The clue is in the name.

    Of course, PCP deals are structured so that most people choose to stop owning the car at the end of term, and start owning another one. But that's something else all together.
    Originally posted by antrobus
    It doesn't matter what the arrangement is called, effectively it is a lease as most people use it. Yes, you can purchase the car if you can come up with the baloon payment at the end but most people do not. You hand the car back to the dealer having paid for all the early depreciation. The deal is rolled over onto another car and the whole process starts again.

    There are those that can make this work for them but for the majority of people I do not believe that it is the best way to finance a car purchase.
    Last edited by MEM62; 11-08-2017 at 9:29 AM.
    • superbigal36
    • By superbigal36 11th Aug 17, 12:13 PM
    • 642 Posts
    • 355 Thanks
    superbigal36
    If you plan on getting a new PCP then the dealer should happily accept any over mileage/negative equity.
    Instigating a new PCP before the end of the current one can often keep people happy.
    My scenario is similar to your.
    I am 6000 miles pa for 4 year deal.
    I do circa 8000 pa
    I do a new deal at year 3 which keeps me under 24000 total miles (That's the actual deal).
    Also then avoid MOTs and servicing that hits in year 3 (I get 2 years servicing up front in the deal).
    • iolanthe07
    • By iolanthe07 12th Aug 17, 2:55 PM
    • 4,833 Posts
    • 4,565 Thanks
    iolanthe07
    I am about to buy a new car and I was going to pay cash, but the PCP deal offered is so good that I am going to take it, along with the hefty dealer contribution not available to a cash purchaser. When the balloon payment comes up in three years time I will probably pay it and keep the car.

    I know that buying new cars is not moneysaving, but I love owning a car from brand new, and you're a long time dead.
    I used to think that good grammar is important, but now I know that good wine is importanter.
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