Car Lease

krazykaz64

My daughter got a Mini Cooper on a PCP last year .... car was valued at nearly £10,000 by Mini.... her settlement figure currently stands at £7700 ... she would like to get out of the PCP and Mini have told her she can sell the car privately or to another garage/dealer and pay off the finance... how is she supposed to do that when any other garages would only give her £4500 ...
have Mini conned her with regards to the value ?
can a car be worth less than half the price within a year ?

Gaz83

A car (or anything, really) is only worth what someone is prepared to pay.

Has she tried selling it privately? Dealers will usually offer less than what it might be worth privately as they'll want to sell it on to make a profit for themselves.

SeanG79

Conned how? They advertised a car, told her the price, she agreed the price, now it has depreciated...

Yes a car can be worth less than half its value after 12 months. Maybe she should have done more research into resale value of Mini before agreeing to the the purchase?

Brock_and_Roll

can a car be worth less than half the price within a year ?


Most definitely yes.


Without wanting to appear rude, the post does seem very naïve.


Daughter bought the car for the "retail" price from Mini themselves.


A year later daughter is approaching other dealers to ask what price they will but the car - they will pay the "trade" price. These dealers will be looking to make a profit on re-selling the car and will have the costs of preparing it, marking it, selling it etc so they will be looking for make a profit of £2k or so on the deal.


It is always going to be painful to try and get out of a PCP so early in the life of the deal, but the least painful solution, aside from carrying on with the agreement, would be to arrange a private sale as daughter should be able to get a better price. The finance would have to be settled first or at the same time though.

krazykaz64

I appreciate that my post comes across as naive... my apologies for that. Sometimes the written word comes across that way
My daughter has done her research and at the end of the day hindsight is a wonderful thing!
I suppose I didn't expect the car to depreciate in value as much .. but hey ho ...
She was looking at options to get out of the PCP early and she knows that if she is going to sell the car, then privately is the way to go... and we know that the finance would need to be settled first ... we also know that traders want to make money too .. it is the nature of business after all...:)

foxy-stoat

Look to see what its worth on the private market not what she will get on a trade in, if its close to the settlement figure then she can get herself out of the PCP, either the buy pays the finance off over the phone or she will need to take out a loan to clear the finance.

If she is going to buy another car for the same value then she can just pay the loan as normal, if not then she should settle the loan as quickly as possible.

Gaz83

foxy-stoat wrote: »

Look to see what its worth on the private market not what she will get on a trade in, if its close to the settlement figure then she can get herself out of the PCP, either the buy pays the finance off over the phone or she will need to take out a loan to clear the finance.

If she is going to buy another car for the same value then she can just pay the loan as normal, if not then she should settle the loan as quickly as possible.

While you are correct, advertising a car with outstanding finance is always going to put off potential buyers, so the chances of finding someone willing to do this is lower.

krazykaz64

Gaz83 wrote: »

While you are correct, advertising a car with outstanding finance is always going to put off potential buyers, so the chances of finding someone willing to do this is lower.

wouldn't dream of trying to sell whilst still on finance .... possibly get a loan, pay off finance, sell car, buy another car

Gaz83

krazykaz64 wrote: »

wouldn't dream of trying to sell whilst still on finance .... possibly get a loan, pay off finance, sell car, buy another car

There's nothing inherently wrong with selling a car whilst still on finance, as long as the buyer is made aware when the car's advertised that there is outstanding finance, and that the finance is paid off at the point of sale.

But it does limit the potential buyers as many can't be bothered with the hassle.

Cornucopia

krazykaz64 wrote: »

My daughter got a Mini Cooper on a PCP last year .... car was valued at nearly £10,000 by Mini.... her settlement figure currently stands at £7700 ... she would like to get out of the PCP and Mini have told her she can sell the car privately or to another garage/dealer and pay off the finance... how is she supposed to do that when any other garages would only give her £4500 ...
have Mini conned her with regards to the value ?
can a car be worth less than half the price within a year ?

How long is the PCP term?

What is the MGFV/Balloon payment on the deal?

What is the reason/reasoning for trying to settle the PCP now? Is there a compelling reason for doing so, or is it a purely financial thing where there may not be much benefit after the whole thing is settled?

Yes, cars depreciate, and although 50% is a lot, it's possible. However, the PCP will specify the MGFV (Minimum Guaranteed Future Value) for the end of the PCP term. I would be surprised if that figure were hugely lower than £4500 - and if it is, then that would have been a warning sign to me at the outset.

If the MGFV is close to £4500 and there is still significant time to run on the PCP term then I would keep the PCP going... that may actually be the best option once the numbers are fully explored.

iolanthe07

There is an old adage that the cheapest car to own is the one you've got now. Not always true, obviously, but your daughter might be better off sticking with the PCP deal she signed up to.