Car PCP - early termination / part exchange?

Basil_Hume · 7 August 2007 at 8:58PM

I bought a car last year on PCP and would now like to change it.

I'm aware that there will be some negative equity (£1k or so) due to the relative depreciation and likely settlement figure on what I borrowed under the PCP, but c'est la vie! I can't "walk away" from the PCP as I haven't yet paid 50% of its value.

I have two options as I see it:

a) settle PCP early with finance company, sell the car privately, then buy a new car
b) walk into a dealer, part exchange the current car, start a new PCP and have the new finance company settle the old PCP

I'd prefer b) because of the hassle involved to be frank! Is this possible and does anyone have experience of this situation?

Many thanks

daveyjp · 7 August 2007 at 9:26PM

Yes it's possible we did it with one of our cars. As you say walk into dealer they will find out what you need to pay and add it to your new loan.

itsnowtime · 7 August 2007 at 9:41PM

Yes, I have done it on numerous vehicles, until the last one - which I'd paid 50% on and Voluntary terminated instead cos the car was worth less than what was outstanding.

And... that's all I'd watch out for, if the garage give you a valuation for your car which is less than whats outstanding on the PCP, that amount will be added to the next vehicle which means you may start off in negative equity with that car unless you put in a substantial deposit.

Hope you get the car you want!

:j

butch_dingle_2 · 8 August 2007 at 12:41AM

Can I ask why you want to change it so soon ? From experience in these matters, unless you have put down a big deposit on a PCP/baloon scheme then you will be hugely upside down on the finance (owe more than the car is worth), meaning that you will start your new car in negative equity, which is not a nice place to be.

Also, experience shows that people generally overvalue their cars they are going to trade in.

Basil_Hume · 8 August 2007 at 7:04AM

Many thanks.

I got a good deal on the car in the first place, but have since decided that I'd really like another. I think I'm realistic about the trade-in of the current car, but will wait and see what the actual valuations are.

nomoneytoday · 8 August 2007 at 12:41PM

Can't you keep the car for another year, and then hand it over at the 50% mark? Otherwise you have had 2 depreciating assets very quickly...

Basil_Hume · 8 August 2007 at 6:19PM

Good point. I'm considering this now.

Car PCP - early termination / part exchange?

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