In negative equity with our car

motorguy

verityboo wrote: »

I agree that they are a good idea on new cars but only ones with comparatively low depreciation. That means that the chunk you pay off is comparatively small and hence the monthly payments are low. No good buying a Citroen on a PCP which is worthless after 3 years anyway

You're right. it tends to work on premium brands or very cheap cars. In between cars like c5, mondeo, passat, etc, you're as well to just take straight finance.

verityboo wrote: »

We have one of our cars on a PCP which we are replacing in a couple of months time. We have found that there is plenty of equity in the car and are putting a reasonable deposit on the new one. Assuming we could get the same low interest rate, an HP loan for the full amount with the same monthly payments would take over 7 years to pay off.

+1

With my wifes previous car it went the other way - it was worth several thousand less than the balloon payment so she simply handed it back.

pelirocco

Doozergirl wrote: »

You have to save to do the house up because you live under a bridge or what?

How much do you expect an X5 to be? Another kid doesn't automatically give you higher car status you know; it sounds like you're struggling with what you have, let alone house renovations and and weddings. Do have any idea how much more an old X5 will cost to run and service over a 1 series?

BMW plan it so that you will have enough left over at the end of therm to provide you with some sort of deposit for your next car. They never plan it that you just hand it back - they'll tell you that you've got £1000 if you part-ex it and you can have a wonderful replacement for the same payment. That's the whole point. The point is not to replace the car part way through unless you can afford the extra.

You need to understand what you sign up to. PCP is great as long as you expect and understand that you will always pay a monthly cost towards having a newer car rather than owning one outright because you are paying interest on the end value of the car as well.

No one really enters into PCP expecting to pay the balloon payment at the end. You get another car and continue making payments. HP, PCP and PCH all serve different purposes. Esch is for a different type of person.

I love this

espresso

thescouselander wrote: »

I think you are being unrealistic - it sounds like your asperations are well beyond your means. Maybe you should consider a cheaper brand of car or maybe a slightly older one.

Or perhaps a cheaper wedding?

C_Mababejive

vikingaero wrote: »

The OP should get the dent repaired/resprayed by an independent bodyshop. Most BMW dealers don't have their own bodyshops and contract out the work to third parties and add their whack on top.

I can't help thinking that the OP bought a cruddy PCP deal. Buying a 3 year old car on PCP and with it being 7 years old at the end of term isn't going to give rise to great values. I personally would have ignored the badge and the need to have a Beemer and gone for a new/nearly new mainstream car.

Just bear n mind any body warranties and the requirement to use a BMW approved body shop/system.

Homersimpson

OP, sadly it seems that your one of the current generation who wants the flash car, the nice house and the big wedding but doesn't have the cash to do all of these things so resorts to credit.
Sorry if that sounds harsh.

Ditch the bottom the range BMW and buy something sensible like a cheap mondeo for a couple of grand and save for the renovations and the wedding. I bought an old passat estate (1996) for £170 and have had to put an exhaust back box and a couple of brake pipes for the MOT, its reliable, reasonable econmical (33mpg), I've had it 4 months and have spent less per month than on an HP/PCP type scheme, if something major goes wrong I will just throw it away and get something else.

P.S. I too have lost loads of money on cars over the years so I speak from experience.

Becciboobah

Homersimpson wrote: »

OP, sadly it seems that your one of the current generation who wants the flash car, the nice house and the big wedding but doesn't have the cash to do all of these things so resorts to credit.
Sorry if that sounds harsh.

Ditch the bottom the range BMW and buy something sensible like a cheap mondeo for a couple of grand and save for the renovations and the wedding. I bought an old passat estate (1996) for £170 and have had to put an exhaust back box and a couple of brake pipes for the MOT, its reliable, reasonable econmical (33mpg), I've had it 4 months and have spent less per month than on an HP/PCP type scheme, if something major goes wrong I will just throw it away and get something else.

P.S. I too have lost loads of money on cars over the years so I speak from experience.

Me too, bought a brand new Ka in 2003, it got written off by some idiot in 2006, my insurance pay out didn't even cover what was left on the finance (my GAP insurance had run out 2 months previous, doh!). Never again, now drive a 14 year old Escort which fits 3 kids fine in the back with a decent boot and she costs peanuts to run. Am currently saving up to replace her in 12 months time but she cost me £500 and I've only had to replace tyres and the odd sensor (which I get from the scrappy for nothing).

The new car feeling wears out so quick anyway I'm not fussed that my friend drive convertibles but are paying silly monthly payments back and I'm debt free :-). In 12 months time I'll have £2500 for a pretty decent 2nd hand car. Again, debt free.

Homersimpson

Good for you, thats the money saving expert way!

2.5k will buy you a really nice car and you will always know that its yours.

Anyone who says that they have to buy a new car because they couldn't afford to keep repairing an old one or it won't be reliable is just trying to convince themselves that a new car is a good idea. I go backwards and forwards to london in my old Passat (around 110miles each way) several times a month (I've been twice in the last 7 days).

saleeper

Hi, i know this post has been inactive for a few months but it is an interesting read. I have a simular issue, any advice given would be appreciated.

I purchased a 5series from BMW 2 years ago on a 4year PCP, monthly payments are fine and as expected there is a balloon payment at the end. At that point i either pay that balloon (8k) or hand the car back and walk away. I have just passed the halfway mark and thinking about changing the car for a later 5series, issue now is that my car has dropped in value and have negative equity.

BMW want £2900 from me to hand the car back and p/x value for my car is approx 11k - settlement figure is 14k. So am a bit stuck.

I am happy with my car and dont mind keeping it if i cant swap for a newer one, however i would like to own it at the end. This is the first time i have taken a PCP out, in the past it's always been HP where the car is mine at the end.

I was thinking, do you think it is worth me re-financing my car? so re-finance the 14k via a cheaper lower interest rate bank loan? monthly payments would be less than now but obviously the term will extend if i take out a 4year loan, by the time it ends my car will be 9yrs old.

Ideally i would like to chop my car in, and take out HP for a later model where it's mine at the end but that may not be possible if i am in negative equity, may have to keep my current car.

Any ideas?

Thanks

seven-day-weekend

Or buy a car outright for five grand (not much more than your balloon payment), owe nothing on it and keep it for years.

We did this in 2003 with our Seat Alhambra and at tweve years old and and 180,000 miles is still going strong and taking us backwards and forwards from Spain to the UK twice a year. Doesn't owe us a penny.