Trading in a car early on PCP

Looozzz

hi

I currently have a fiat 500 on a pcp finance! had it since a September 2014, however because I was only 18 I couldn't get the finance in my name. so my grandad has it in his name and I've been paying him every month. however I was looking to see if I can now get a new car.

I've been looking at a few forums and have seen that I can trade it in, and if I am in equity then this will go towards another car. I've also seen that this will pay off my existing fiance in my grandads name. I want the new finance to be in my name, has anybody got any experince on whether I can do this or not?

just need something to back up what I am saying, so I can go to the dealership with a bit more confidence that what I'm doing is actually doable!

thanks

=rizla=

As you've only had it a few months I think you'll be in negative equity on the PCP, depending of course on how much deposit you out down.

Looozzz

=rizla= wrote: »

As you've only had it a few months I think you'll be in negative equity on the PCP, depending of course on how much deposit you out down.

Sorry! I meant September 2013! I also put a £2000 deposit down! they had a deal on at the time, where if I gave them my old car they would give me £2000, was sort of the like scrappage scheme!

motorguy

Looozzz wrote: »

Sorry! I meant September 2013! I also put a £2000 deposit down! they had a deal on at the time, where if I gave them my old car they would give me £2000, was sort of the like scrappage scheme!

With a PCP deal its unlikely you'll be at the breakeven point until you are roughly 3/4 way through the term of the agreement.

Unless you have several thousand to dig yourself out of that deal (and are crazy enough / have good enough reason to do it) you would be best to sit tight a while yet.

marlot

Unless there is something wrong with the car, you are far, far better keeping it. save the money instead!

motorguy

marlot wrote: »

Unless there is something wrong with the car, you are far, far better keeping it. save the money instead!

And if theres something wrong with it, its under warranty

Looozzz

Thanks for your help

I would only swap if i wasnt losing any money, just for my grandads sake, because i know he is weary of having the finance in his name!

I was just wondering how it would work if i did swap now?

motorguy

Looozzz wrote: »

Thanks for your help

I would only swap if i wasnt losing any money, just for my grandads sake, because i know he is weary of having the finance in his name!

I was just wondering how it would work if i did swap now?

Presumably you've an auto direct debit set up monthly to pay him the day before its due, so he doesnt have to chase you for it?

The dealer would give you a valuation for it on a trade in. If thats less than the amount owing, you would have to settle the balance.

You could always take out a personal loan for the balance and continue paying it?

forgotmyname

If you did swap you will be paying over the odds on the next car.

It will have lost more than £2000 value in the first year, And another £2000 in the 2nd year. year 3 should be much less.

So to swap you need to make up any shortfall in value.

Looozzz

motorguy wrote: »

Presumably you've an auto direct debit set up monthly to pay him the day before its due, so he doesnt have to chase you for it?

The dealer would give you a valuation for it on a trade in. If thats less than the amount owing, you would have to settle the balance.

You could always take out a personal loan for the balance and continue paying it?

yes a direct debit is set up straight to my grandad, I think he's worried because of his age and health issues.
hmmm...

well I put a £2000 deposit down, pretty sure the dealership put a deposit down aswell. and I have paid 2,788 so far altogether so that's £4,788. and say the new dealership offer me £6000 for my car, that's £10,788.

so the £10,788 Will have to pay off the value of my car when I first had it? otherwise I will have to pay off the remaining before I can swap for a new car?

this pcp confuses me a bit:(

motorguy

Looozzz wrote: »

yes a direct debit is set up straight to my grandad, I think he's worried because of his age and health issues.
hmmm...

well I put a £2000 deposit down, pretty sure the dealership put a deposit down aswell. and I have paid 2,788 so far altogether so that's £4,788. and say the new dealership offer me £6000 for my car, that's £10,788.

so the £10,788 Will have to pay off the value of my car when I first had it? otherwise I will have to pay off the remaining before I can swap for a new car?

this pcp confuses me a bit:(

No, you've confused yourself

The PCP deal will consist of a deposit, monthly payments (usually 36 or 48 months) and a final payment.

At the moment you own whatever that final payment is, and the remainder of the monthly payments until the end of the agreement - less maybe 6% discount for clearing the deal early.

If your car is worth less than that, then you'll owe the difference to clear the finance.