Paying off PCP or keeping the vehicle

The_Real_Cheddar_Bob

Hi all,

another pcp question. Our local mini dealer sent me a marketing letter asking to buy our car. This is a letter which would have gone out to many mini owners, so not just my particular car.

I've called with curiosity and im left with a decision as follows:

Mini dealer has offered £8000 for the mini
I would need to pay £1500 to clear the agreement

£1500 is roughly 6 months payments including insurance and tax

My wife mainly uses the car as i have a fully expensed company car. She doesn't need a vehicle so when i say uses it, its very infrequent.

Selling the car back to the dealer if you will, means i have reduced my debt to just a mortgage, but in return my wife loses the use of a car.

£220/month plus fuel is a lot of taxi/bus fare.

At the end of the agreement we will be giving the car back anyway, we have two years left, so 24 x £220.

Any advice welcome

System

OK so you say your wife only uses it infrequently. What is the mileage it does a year? I ask as unless she sits in the house all day when you're at work she's likely to be using it.

Would your wife accept having an older cheaper car as a runaround? Could you fund buying one outright?

Does the £1500 "ending the agreement" leave you owning the car or is there a "buy" payment at the end?

£8000 offered without seeing the vehicle is likely to end up being a lot less when you actually turn up.

The_Real_Cheddar_Bob

nope, its £1500 to the dealer plus the car. We get nothing other than not having any debt.

Two years from now, we still get nothing, but have £7000 left on the car.... pcp for you.

They have seen the vehicle, so its not an offer without seeing it.

my wife doesn't need a car. she didnt want the car in the first place, i wanted her to have freedom, but in reality she has less freedom now, as she feels pressure to drive and doesnt want too.

AnotherJoe

So you can either pay £1500 now to get rid of a car you don't want, or £5,280 (£220 x 24) ( plus tax, insurance, petrol?)

If that's the choice I'm not sure why you are even thinking about it. Did I misunderstand something ?

Mutton_Geoff

Any details on the mini so our car pricing experts can give an idea. Chopping a car into a dealer without buying anything from them is usually the worst way of selling a car regardless of the fact this is packaged to you as a way out.


Is the PCP closure incentivised or can you just pay them off anyway? Could you sell the car for (much) more privately and be, say, £1,000-£1,500 better off thus saving yourself more.

robber2

I'd take the offer from the dealer and buy a banger for £500 for the occaasional trip that your wife makes. Im guessing she can drive your company car if she has a significant journey to make?

AnotherJoe

robber2 wrote: »

I'd take the offer from the dealer and buy a banger for £500 for the occaasional trip that your wife makes. Im guessing she can drive your company car if she has a significant journey to make?

It would be cheaper and less hassle to rent or get trains/taxis.

A "£500 banger "will still cost a grand in the first year and probably £500 ongoing a year. That's a lot of trains and taxis.

The_Real_Cheddar_Bob

it might sound odd but my wife does not need a car. she only took her test through family pressure. absolutely hates driving, is physically frightened. any long journeys i drive, fuel is free for me.

ive gone with selling the car back to the dealer. despite costing me £1500, im now out of debt apart from the mortgage.
thanks for your help

The_Real_Cheddar_Bob

ok, so car went today. Thats £9000 weve spent in two years with insurance and tax and nothing to show for for it!!

thank you for your help

MataNui

Normally it annoys me a bit when people get all high and mighty about whether you 'need' a car or not or what sort of car you 'need', but in this case not only does your wife not 'need' the car but she didn't even want it in the first place.

That would be a bit frustrating. Your right about PCP too. Its rarely the most suitable finance option yet its becoming the most common by a long way. Looking around on autotrader and the number of traders who are only offering PCP type finance is unbelievable. It really seems like financial suicide, particularly on used cars.

The_Real_Cheddar_Bob

yep thats correct. Weve been managing more than ok since the car has gone.

Agree with the PCP comment, hence us paying to get out of it.