PCP deals

graemie

Bought a new Toyota IQ at the weekend on a PCP arrangement. I had £2000 equity in the old car to trade in towards the new one. There is obviously the guaranteed value of the car at the end of the three years but is it likely to be worth more?

Anyone got any experience of this? Thank you

Mark_Hewitt

Depends on so many factors, the milage, condition of the car, but mostly the state of the second hand car market at the time. Plus the state of the new car market if you're buying a new car to replace it.

LandyAndy

I had a three year HP deal on a Mazda RX-8 with a final balloon payment due in December this year.

In September I was told that the current value of the car was about £1k less than the outstanding finance so, as I had paid over half the the amount due I was able to hand it back to the finance company with nothing further to pay.

Of course PCP's may be different and an iQ is a rather different beast to an RX-8.

I suspect a lot of finance companies have been caught out in this way and may now be setting GFV's a bit more conservatively than in the past.

nomoneytoday

How long is a piece of string?
Either way, you won't have the hassle of trying to sell it privately or arguing with a trader over the px value in 3 years

(p.s. the answer is twice as long as half a piece of string)

plane_boy2000

The GFV is a conservative best guess. The IQ may be a big flop, prices fall, and its worth less.

I chucked my Audi A3 back a few months back on a PCP because it was only just worth the GFV - I looked at part X but there was no point. Few dealers told me that before the car market softened I would have got at least 1K more for it, but thats the beauty of PCP - you can hand it back

Mark_Hewitt

I wonder. Lets say you GFV is £3,000 and just so happens market conditions mean your car is only worth £2,000. Could you hand it back to the dealer, thus paying off the £3,000 and then buy it back for £2,000?!

nomoneytoday

Mark_Hewitt wrote: »

I wonder. Lets say you GFV is £3,000 and just so happens market conditions mean your car is only worth £2,000. Could you hand it back to the dealer, thus paying off the £3,000 and then buy it back for £2,000?!

More likely, a dealer would buy it for £2000, spend £500 prepping it and adding a warranty, then back on a forecourt for £3295 ono

plane_boy2000

WHen my PCP ended the guy who picked it up told me it was going straight to Auction - His paperwork stated beliver direct to Brighouse. Kept a look out and saw it appear at a main dealers in Portsmouth a few weeks later and only 1500 quid less than I paid for it new 2 years earlier! Cant see them ever shifting it

jaydeeuk1

I did a pcp on an iq3, works out really competitive, and as it seems hyundai are the only manufacturer soon to release a similar class car, I reckon (or hoping) prices will hold better than what toyota are quoting (about £6.5k in my case) or approx 50% depreciation after 3 years. Thats estimated on 10k a year, I'll probably do about 7k.