PCP Mileage

LittleOne

Does anyone have experience of handing back a car on PCP having gone over your agreed annual mileage and trading it in for something newer?


I've just been to visit a long list of car dealerships and thought I knew pretty much all there was to know about PCP. However, the first dealership we went to told me that if you intend to change the car after 3 or 4 years and trade it in with them for something new, you will not incur any charges for going over your agreed annual mileage even if it's by quite a few thousand.


Armed with this information, I then asked the same question of all the other dealerships to make sure this was legit. Sure enough they all said the same thing. One guy said most people who do over 10,000 only ever put 10,000 if they're confident they'll be trading it in for something newer in a few years time. An example he gave was his daughter does 10,000 but actually only puts down that she does 6,000. Apparantly this is very common.


I'm just wondering how many miles over, roughly, you can push this before the car goes into negative equity when you come to trade it in?


My guess is that it's very common for people to go over the agreed mileage based on this info I got yesterday.


I'm currently looking at a new car and changing it after 3 years (once the warranty has expired). I do approx 15,000 miles per year. Having heard what I did yesterday I'm wondering whether to actually put down 10,000 or 12,000. I know I'll definitely trade it in so that's not a worry.


Before anyone tells me to go and look at the value of the car and work it out based on the payments and GFMV etc etc, I just want to know if anyone has experience of this and how many miles you have gone over by and what effect (if any) did it have on trading in for a new model?


Thank you

motorguy

Yes, the PCP mileage only kicks in if you hand it back.

If you want to be sure of having little or no equity at the end of term and are doing 12,000-15,000 miles a year, stick down 6,000 miles a year, however its not really solving anything as you've still to find a deposit next time.

mark5

When you trade it in, the garage is taking it as a part ex and settle the finance.

The problem comes when your not in a position to take another pcp and the car is returned to the finance company, could happen, does happen.

=rizla=

We traded our main car in last year, the minimum mileage we could put down was 10k, as we'd only put 21k on the car in 3 years, and the mfgv was low we ended up having nearly £3k towards a new car.

The other car i have has in my opinion a high mgfv, so is going to be handed back to the dealer at the end of the term, trouble for me i seem to be doing more miles than i did in my last car (~2.5k over a year) so will end up with a bill at the end.

LittleOne

Thank you!


I just didn't want to set it too low. I'm glad the first dealership was open about this as I would have gone into the other dealerships probably suggesting 15,000 (perhaps even 17,000) and paying more.

=rizla=

If you admit to a higher mileage then you will pay a little more per month, BUT the mgfv will also be lower, so if the mgfv is set reliativly low and you're planning on px'ing the car at the end of the term you will end up with more of a deposit and a lower payment on the next car.

motorguy

mark5 wrote: »

When you trade it in, the garage is taking it as a part ex and settle the finance.

The problem comes when your not in a position to take another pcp and the car is returned to the finance company, could happen, does happen.

You dont have to take another PCP.

You could :-

• Trade it in
• Settle the balance
• Take out a cheap loan to cover the residual and drive on at the car
• Sell it to one of the online WBAC type companies an pocket any equity
• Sell it privately and pocket any equity
• Exercise your rights to VT and return the car with nothing further to pay just ahead of the contract end of term (subject to the car being kept in reasonable condition)
• If the car has excess miles over the agreed contract mileage, hand the car back at the end of term and pay the mileage difference
• If the car doesnt have excess miles, hand the car back at the end of term with nothing further to pay (subject to the car being kept in reasonable condition)

How are any of those a problem?

motorguy

Kirsty_A wrote: »

Thank you!


I just didn't want to set it too low. I'm glad the first dealership was open about this as I would have gone into the other dealerships probably suggesting 15,000 (perhaps even 17,000) and paying more.

A dealer will rarely suggest a higher mileage as it raises the monthly payment and thus makes the deal less palatable to the customer

motorguy

=rizla= wrote: »

We traded our main car in last year, the minimum mileage we could put down was 10k, as we'd only put 21k on the car in 3 years, and the mfgv was low we ended up having nearly £3k towards a new car.

The other car i have has in my opinion a high mgfv, so is going to be handed back to the dealer at the end of the term, trouble for me i seem to be doing more miles than i did in my last car (~2.5k over a year) so will end up with a bill at the end.

Only if you hand it back at the end of the contract?

LittleOne

It suits me to keep the monthy payments low for the next 3 years. I can only put down a small deposit this time around (don't you just love second hand cars that screw you over ?!) so after 3 years should be in a much better position to put down a bigger deposit on the newer car I get when trading in.


On a side note... this was quite an experience for me. The different levels of service, and enthusiasm to actually sell you a car, between dealerships was suprising.
One dealership took 2 hours 15 mins (!) to actually get to the figures. Excellent customer service, totally ignored my budget though and when I told them they were having a laugh, amazingly reduced their monthly price by £77! Obviously a tactic they use to get the "Wow" factor from some people, but I wonder how many people go in there and actually accept the first price offered.

mark5

motorguy wrote: »

You dont have to take another PCP.

You could :-

• Trade it in
• Settle the balance
• Take out a cheap loan to cover the residual and drive on at the car
• Sell it to one of the online WBAC type companies an pocket any equity
• Sell it privately and pocket any equity
• Exercise your rights to VT and return the car with nothing further to pay just ahead of the contract end of term (subject to the car being kept in reasonable condition)
• If the car has excess miles over the agreed contract mileage, hand the car back at the end of term and pay the mileage difference
• If the car doesnt have excess miles, hand the car back at the end of term with nothing further to pay (subject to the car being kept in reasonable condition)

How are any of those a problem?

You put down 6000 per year, you do 15,000per year, you get made redundant, money is tight. You don't have the money to settle, the car is worth less than the final payment, your only option is to return the car and get hit with another bill you can't afford.