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Changing car on PCP?

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  • motorguy
    motorguy Posts: 22,611 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    webuyanycar say £10,000

    Theres a possibility of some or all of the difference being able to be rolled in to another finance deal but its kicking the can down the road and will no doubt end up costing them a lot more money - probably disguised in the monthly payments.

    Another option might be to get a cheap personal loan for the total amount required for the new car + any shortfall.

    Its going to be financially painful either way.
  • DrEskimo
    DrEskimo Posts: 2,432 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    motorguy wrote: »
    Its going to be financially painful either way.

    Not to mention massively increases their exposure to financial risk even further...

    Imagine the person in question roles the neg. equity into another deal, and a few months down the line has to look at getting rid of it early due to a change in financial circumstances (they can no longer work, their partner can no longer work, hours are reduced due to illness/accident/pregnancy/needing to care for someone, etc. etc. etc.) and they can no longer service the monthly payment.

    Not only will they be looking at their now much needed emergency savings pot (assuming they have one) to find the £3k shortfall again to settle the finance, they will have another £3k on top of that from the negative equity they rolled on from this car.

    Suddenly £6k from their savings is being used to get rid of a car they probably vitally need, rather than helping pay the mortgage/rent as they don't have the same income....
  • motorguy
    motorguy Posts: 22,611 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    DrEskimo wrote: »
    Not to mention massively increases their exposure to financial risk even further...

    Imagine the person in question roles the neg. equity into another deal, and a few months down the line has to look at getting rid of it early due to a change in financial circumstances (they can no longer work, their partner can no longer work, hours are reduced due to illness/accident/pregnancy/needing to care for someone, etc. etc. etc.) and they can no longer service the monthly payment.

    Not only will they be looking at their now much needed emergency savings pot (assuming they have one) to find the £3k shortfall again to settle the finance, they will have another £3k on top of that from the negative equity they rolled on from this car.

    Suddenly £6k from their savings is being used to get rid of a car they probably vitally need, rather than helping pay the mortgage/rent as they don't have the same income....

    and then to cap it all, their pet dog gets hit by a bus and their mum gets struck by lightening and they cant get to the hospital because they've had their car repossessed. :eek:
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    Or on month 6 the car is written off and the insurance company only pays out the market value - you will be left with the negative equity to pay....or when they decide that the auto they bought the dont like and want to change it again - I mean how much negative equity is too much?
  • motorguy
    motorguy Posts: 22,611 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 8 November 2019 at 2:22PM
    foxy-stoat wrote: »
    Or on month 6 the car is written off and the insurance company only pays out the market value - you will be left with the negative equity to pay....or when they decide that the auto they bought the dont like and want to change it again - I mean how much negative equity is too much?

    Massive massive amount of assumptions there - for example, that the person doesnt have GAP insurance, or that they want an auto because they 'like' it and they might 'like' something else soon?

    For example, we had similar where we had to change our car to an auto because my wife has rheumatoid arthritis. When we bought the car new it wasnt an issue, less than a year later it was unbearable for her to drive the car as the condition had degraded. Cost us a lot of money to change it but i wouldnt let my wife endure pain just to keep the car.

    And yes, we looked at ALL options to dispose of the car - including rolling negative equity in to the next deal. We chose not to - we sold the car privately and we just paid the difference.

    But go right ahead and make a load of assumptions there about people, their situation, their finances and their needs.
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    I would like to think that the insurance companies offering GAP would of added clauses in their policies so that they wouldn't pay out the negative equity on previous vehicle that have been rolled over. Not sure if this is recorded anywhere in the contract though.
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