Wanting to exchange my car with outstanding finance for new car

ultracheapskate

I currently have a 2009 BMW 3 series convertible having done 35k miles. It has full service history, no scratches/dents and good spec. I am paying £300/month on hire purchase and have about £9k outstanding in finance - I bought it used last year and settled on hire purchase over 4 years.

I love my car but have noticed that as time is going on the running costs are increasing. My thought was that would it be possible to trade this car at a dealer and use the positive equity to buy a brand new one for the same monthly payments on PCP? The benefits of this would obviously be that I would have a new car and the running costs would be lower.

I was looking at getting a new audi a5 or Mercedes e class coupe. However my Mercedes dealership are "only" valuing my car at £12k, leaving me £3k equity. Using this deposit would make it very difficult to get the car at £300/month. However looking at autotrader cars of a similar age/spec are selling for £17k (leaving equity of £8k). I understand they have to make a margin on the car but would it be better to try selling my car privately? I have never done so before and always find it easier to trade in directly with the dealer.

LandyAndy

You'd be a lot better sticking with what you've got.


Swapping expensive cars on a regular basis is for those with plenty of spare money.

motorguy

LandyAndy wrote: »

You'd be a lot better sticking with what you've got.


Swapping expensive cars on a regular basis is for those with plenty of spare money.

+1

Totally agree.

motorguy

ultracheapskate wrote: »

I currently have a 2009 BMW 3 series convertible having done 35k miles. It has full service history, no scratches/dents and good spec. I am paying £300/month on hire purchase and have about £9k outstanding in finance - I bought it used last year and settled on hire purchase over 4 years.

I love my car but have noticed that as time is going on the running costs are increasing. My thought was that would it be possible to trade this car at a dealer and use the positive equity to buy a brand new one for the same monthly payments on PCP? The benefits of this would obviously be that I would have a new car and the running costs would be lower.

I was looking at getting a new audi a5 or Mercedes e class coupe. However my Mercedes dealership are "only" valuing my car at £12k, leaving me £3k equity. Using this deposit would make it very difficult to get the car at £300/month. However looking at autotrader cars of a similar age/spec are selling for £17k (leaving equity of £8k). I understand they have to make a margin on the car but would it be better to try selling my car privately? I have never done so before and always find it easier to trade in directly with the dealer.

£12K sounds about right for a 5 year old convertible BMW being sold in the wrong season and to a non BMW dealer whos going to have to try to dispose of it.

Also, these cars arent being "sold" on autotrader for £17K, they're being "advertised on Autotrader for £17K. Two different things. Also, a dealer will be looking for a £3,000 - £4,000 gross markup on a car like that to be bothered with stocking it mid winter.

You seem to be looking at changing your car for no other reason than you can get a new car on a PCP deal for the same monthly payments.

Whilst this may seem like a good idea, you wont "have" a new car in terms of ownership - you're effectively renting it - some come the end of the PCP deal, you'll be left with nothing of your deposit, and if you're lucky maybe a small amount of equity to use in the next deal.

Unless you've suddenly come in to a lottery win or enjoy being royally !!! raped by car dealers, stick with what you have and enjoy it! :cool:

ultracheapskate

LandyAndy wrote: »

You'd be a lot better sticking with what you've got.


Swapping expensive cars on a regular basis is for those with plenty of spare money.

Do you not think it would be better if I could get the same monthly payments on the new car? Admittedly the car would have outstanding finance after 3 years (unlike my current one) but on the plus side I could change my car without having the higher running costs of a used car.

ultracheapskate

motorguy wrote: »

£12K sounds about right for a 5 year old convertible BMW being sold in the wrong season and to a non BMW dealer whos going to have to try to dispose of it.

Also, these cars arent being "sold" on autotrader for £17K, they're being "advertised on Autotrader for £17K. Two different things. Also, a dealer will be looking for a £3,000 - £4,000 gross markup on a car like that to be bothered with stocking it mid winter.

You seem to be looking at changing your car for no other reason than you can get a new car on a PCP deal for the same monthly payments.

Whilst this may seem like a good idea, you wont "have" a new car in terms of ownership - you're effectively renting it - some come the end of the PCP deal, you'll be left with nothing of your deposit, and if you're lucky maybe a small amount of equity to use in the next deal.

Unless you've suddenly come in to a lottery win or enjoy being royally !!! raped by car dealers, stick with what you have and enjoy it! :cool:

Thanks. Your reply makes a lot of sense. I think the main reason I wanted to change it was the fact they are replacing the current 3 series convertibke with a 4 series. Thought I'd try to sell the car when it had more value and the inventive of a new car was tempting!

LandyAndy

ultracheapskate wrote: »

I love my car but have noticed that as time is going on the running costs are increasing. My thought was that would it be possible to trade this car at a dealer and use the positive equity to buy a brand new one for the same monthly payments on PCP? The benefits of this would obviously be that I would have a new car and the running costs would be lower.

.

ultracheapskate wrote: »

Thanks. Your reply makes a lot of sense. I think the main reason I wanted to change it was the fact they are replacing the current 3 series convertibke with a 4 series. Thought I'd try to sell the car when it had more value and the inventive of a new car was tempting!

:cool: .

atrixblue.-MFR-.

bmw hi costs in the scheme of things.


merc high costs in the scheme of things


audi A4 and other models high costs in the scheme of things.


I fail to see where swapping your BMW for these brands would leave you better off in the running costs tables.


as you've discovered, swapping HP for PCP deal to "make it cheaper" would have little or no affect on your running costs the car with its current HPI status has very little in the way of equity to lay a deposit on another car.


most people wont consider a private sale with HP still running, as you have a fair way to go with your repayments im not even sure youll get a settlement figure from the finance company.


take motor guy and landy andy advice fella, stay you are before you fall in the enevitable money pit of swapping HP PCP deals and never actually owning a car and throwing thousends to the dealers and government in taxes!

motorguy

ultracheapskate wrote: »

Do you not think it would be better if I could get the same monthly payments on the new car? Admittedly the car would have outstanding finance after 3 years (unlike my current one) but on the plus side I could change my car without having the higher running costs of a used car.

Under a PCP deal, you wont have "outstanding finance", effectively you're having to find the trade value of the car to buy it.

You're moving from an HP deal whereby after three years you'll own the asset, which may well still have a trade value of £7K, to a PCP deal whereby you'll "burn up" £5,000+ on a deposit and have nothing at the end of it. So effectively, on top of the monthly payments its going to cost you £5,000 deposit + the loss of £7,000 value of your own car in 3 years time.

Thats £12,000 of your hard earned net pay gone!! PLUS you'll still have a monthly payment too!

Actually, its worse than that. In 3 years time you'll have an asset worth £7,000.

Moving to a PCP deal will cost you £5000 deposit plus £300 * 36 = £15,800 plus the loss of your £7000 asset is £23,000!

And thats your NET pay. Factor that up and you're probably looking at £11,000 of your GROSS pay each year just to pay for a car!

motorguy

ultracheapskate wrote: »

Thanks. Your reply makes a lot of sense. I think the main reason I wanted to change it was the fact they are replacing the current 3 series convertibke with a 4 series. Thought I'd try to sell the car when it had more value and the inventive of a new car was tempting!

Oh yes. Totally agree.

I have been there done that, and lost a fortune!!!!

Great fun at the time, but its a very expensive game to play.