PCP Mileage

wizzywig27

Hey all, I've read numerous posts about PCP etc, and I feel a little bit confused.

First of all, I intend to trade the car in after 2 years and do another PCP, which may change the response I get.

Basically the dealer put me down for 6k mileage a year, I do about 7k tops so could (if needed) be a bit more clever and get it down to 6k, however, the dealer assured me that as long as I don't go mad and do 80k in two years (for example) I would be ok when it comes to trading it in and any payment for additional mileage only comes into play if I return the car at the end of the four years.

Is he right, or has he pulled a fast one?

mad_rich

You will probably pay an excess mileage charge. Reckon on somewhere betweenn 5-15p/ mile, but check the paperwork or ask the dealer for the exact figure.

force_ten

you will find that the PCP has an excess mileage charge

ford charge about 7p a mile for a fiesta and the price goes up as you go up the range

sinizterguy

Read the paperwork yourself.

Some salespeople don't even understand how the excess miles and pro rata figures work.

wizzywig27

My understanding is this (as read on here and other forums, and by what the dealer said:

1) I trade in my car the mileage doesn't come into play
2) I cancel the agreement once 50% of payments are made the mileage doesn't come into play
3) I return the car after four years then I do pay the excess mileage fee (7.2p per mile)

Cornucopia

Yes - exactly that.

plus 4) Buy the car after 4 years for the GMFV: mileage not relevant

and 5) Sell the car to a dealer, settling the o/s finance: mileage not relevant

In reality, the GMFV is set at a level where it is never intended to "pay out", therefore mileage is only really relevant if you were so financially distressed at the end of the term that you couldn't do anything other than hand the car back, AND this would probably cost you money aside from any excess mileage charge.

If you are planning to trade a 4-year PCP after 2 years, then the mileage charge is irrelevant, though it could be an expensive decision otherwise.

Generally speaking, PCPs are not great (apparently the ambulance chasers will be looking at mis-sold PCPs, next). There are some low-rate PCPs around (e.g. 0% on Renault Clio) which can make sense, but otherwise... not the MSE way, IMHO.

(I've just signed-up for a 4-year PCP at 2.7% APR).

wizzywig27

Thank you, perhaps I'm worrying over nothing, I plan to trade it in after 3 years, if that's the case, and I do say 2k miles extra a year (6k in total), it's only £432 charge, not really something I couldn't pay really.

Cornucopia

You are worrying about nothing, because there is no mileage charge to pay if you trade/settle early.

Obviously, the car's underlying value is affected by its mileage, but that is a different consideration.

TBH, it sounds like the dealer hasn't explained it properly to you. Have a read here:-

http://www.thecarexpert.co.uk/car-finance-pcp-explained/

motorguy

wizzywig27 wrote: »

Hey all, I've read numerous posts about PCP etc, and I feel a little bit confused.

First of all, I intend to trade the car in after 2 years and do another PCP, which may change the response I get.

Basically the dealer put me down for 6k mileage a year, I do about 7k tops so could (if needed) be a bit more clever and get it down to 6k, however, the dealer assured me that as long as I don't go mad and do 80k in two years (for example) I would be ok when it comes to trading it in and any payment for additional mileage only comes into play if I return the car at the end of the four years.

Is he right, or has he pulled a fast one?

As per Cornucopias response - the excess mileage is irrelevant as that only kicks in if you were to hand the car back at the end of term

Mad Rich, Force Ten and Sinizter Guy - you clearly dont understand how a PCP works, so you might be best not muddying the waters with incorrect responses.

wizzywig27

Thank you so much, that article was very helpful. Clears a lot up.

loskie

i think a personal lease may suit your needs better