Offered to get out of PCP early but figures don't add up

smithfield11

So,

I have a 2 year old Citroen Ds3 paying £270 a month and I've decided I'd like to get out of the deal so I can buy something bigger.

I contacted Citroen and after exactly 25 out of the 36 payments of my deal they have said I can end now and return the car for £315 (this would apparently take me to 50% of the total finance value).

I then asked if I wait until next month when I pay another £270 how much would it be then, to which the reply was £45 outstanding. I was a bit confused as this would leave a total of 10 payments on the car for £2700. After which point I would have to give the car back or pay the balloon. This doesn't really make sense as the car won't depreciate by that much in 10months surely so am I getting ripped off by handing it back and missing a refund at the end, or am I getting ripped off if I paid the remaining months and kept the car....?

Any ideas?

Also, is there any particularly bad reason to leave a PCP agreement early, there doesn't seem like a big downside (I only paid £1k deposit)

facade

smithfield11 wrote: »

So,


Any ideas?

Keep it another month, then get it valeted and polished (fix any slight damage), and hand it back for the £45.
You might as well get another month out of it whilst you are looking for a replacement.


Sounds a good deal to me if you want shot of the car, why would they give you any money back at the end?
Otherwise you can pay another 9 x £270 = £2430 for 9 more months hire of a DS3.

I've no idea what it is worth, but if you reckon it would sell easily for say £7000 now, then if you subtract the £2430 and the balloon payment from £7000 then that is how much you are throwing away.

smithfield11

Yeah, WBAC would give me just under 10k for it now, 7k+2.4k = just under 10k, all adds up I guess. Just seems odd I can hand it back for nothing having paid the depreciation on the car all this time, I guess no theyre effectively saying for the next ten months the car is likely depreciating at 270 pounds per month.

missile

That is one issue with PCP. Great if you are happy to be locked into changing your car at a fixed date but you pay the penalty if you want to trade early.
I know some who avoid using their car ........ to avoid horrendous charges for exceeding agreed mileage.

CvPiper

Get an actual settlement figure, then you can decide best what to do with it.

Currently they are looking at VTing your agreement by the sound of it. The settlement will have correction for interest over the remainder, and may give a figure around £9200-9500 meaning you could sell the WBAC and keep the remainder of equity.

NewUserHere

smithfield11 wrote: »

Yeah, WBAC would give me just under 10k for it now, 7k+2.4k = just under 10k, all adds up I guess. Just seems odd I can hand it back for nothing having paid the depreciation on the car all this time, I guess no theyre effectively saying for the next ten months the car is likely depreciating at 270 pounds per month.

Depreciation has nothing to do with it! They are not looking for someone to just pay the depreciation on cars - they are looking to make a profit! What matters is what your contract states with regards to exiting early!

smithfield11

Yes, I agree I need to get a settlement figure and see this in regards to just VTing it. I'm nowhere near my mileage so that shouldnt be a problem (I've done 15500 in 25 months and I'm on 10k a year). They are supposedly sending me out the information regarding handing it back as this has to be done by post so I'll see if the settlement figure is in there.

I think the car may have been more popular than anticipated when I bought (as it was a new model) so their forecast of the residual may be low and I may actually have a small amount of equity but I think it's unlikely. Probably more likely the settlement figure is around 11k judging by my rough maths.

facade

The settlement figure is likely to be the remaining £2700 + GFV (the balloon payment). If this is way less than the car is worth to WBAC, and you can afford it, settle and sell to WBAC. (Remember they will knock off a few hundred when they inspect it, if it isn't immaculate, hence the valet and get any scratches/wheel marks sorted.)

The DS3 is a nice looking car, especially in white, I actually walked upto one on a used car lot and was quite close before I realised it was a Citroen. (I can't get on with Citroen interiors, nothing against the cars particularly)

smithfield11

facade wrote: »

The settlement figure is likely to be the remaining £2700 + GFV (the balloon payment). If this is way less than the car is worth to WBAC, and you can afford it, settle and sell to WBAC. (Remember they will knock off a few hundred when they inspect it, if it isn't immaculate, hence the valet and get any scratches/wheel marks sorted.)

The DS3 is a nice looking car, especially in white, I actually walked upto one on a used car lot and was quite close before I realised it was a Citroen. (I can't get on with Citroen interiors, nothing against the cars particularly)

Yeah, of course I can look at the larger part exchange value offered at the dealer (10k-10.5k)

It is a nice car, min'es the top end "dsport plus" 155bhp 1.6 turbo (it's actually a BMW engine not a citroen one). The inside on the DS range is significantly better than the rest of the citroen line, theyre effectively a different brand tbh.

facade

We seem to be at cross purposes here.

The GFV is what they originally said it would be worth at the end of the hire period, at the end of the hire, you either pay the GFV and keep it, or hand it back (or trade it in, but your "equity" is the difference between the GFV and what they offer you for the tradein,- not the tradein value of the car) .

They ought to settle for GFV plus remainder of the hire as they get all the money now, not over 10 months, they may even offer you a few pounds off as they can get interest on all the money for 10 months

If you simply hand it back now, a voluntary termination, you walk away, and they get the car. (but if they find something that isn't fair wear & tear, like a scuffed wheel, you still get a bill to put it right)

smithfield11

facade wrote: »

We seem to be at cross purposes here.

The GFV is what they originally said it would be worth at the end of the hire period, at the end of the hire, you either pay the GFV and keep it, or hand it back (or trade it in, but your "equity" is the difference between the GFV and what they offer you for the tradein,- not the tradein value of the car) .

They ought to settle for GFV plus remainder of the hire as they get all the money now, not over 10 months, they may even offer you a few pounds off as they can get interest on all the money for 10 months

If you simply hand it back now, a voluntary termination, you walk away, and they get the car. (but if they find something that isn't fair wear & tear, like a scuffed wheel, you still get a bill to put it right)

Yes, that's the way I understand it. Two of the alloys have kerbing on them, one is relatively minimal but has started to bubble with corrosion, the other is more significant and I understand I'd have to pay for that (unless I could negotiate ignorance of it on a tradein and just pay off the finance)