PCP car finance quandry advice needed

ratrace

jmb1 wrote: »

I have a 2013 Volvo V60. Purchased 2017 for £14750 plus interest, total £16782. PCP agreement was 48 months so expires Feb 2021. Paying £243 a month. It does now seem a rather expensive deal esp as the car is devalued to/worth only £6k in just two years

I'm unsure what's best to do. The car's mileage is almost 90k so nearing a timing belt change and possibly other more expensive things going wrong. So was looking at replacing it. However the settlement fee is £8500 and car value only 6k so it's in negative equity.

My options therefore appear to be

1. Refinance on a new PCP/new car, paying the settlement and adding the neg equity to the new agreement (upping the monthly cost).

2. Wait until the current PCP expires and hand the car back and a. call it quits, start a new PCP. Or b. Pay the 5k balloon payment using a personal loan (which seems an expensive choice given I've paid 2k in interest so would have to pay more interest on the new loan on top of 16782+5000 balloon =£21782, an expensive total car purchase!

3. Voluntary termination either now before paying anything more toward the finance, or later.

So any advice on best course of action, all things considered?

You will still need to find £5k for the baloon payment or walk away

at month 48 you would have paid £243x48=£11,664 so if the total amount to pay is £16,782 then yes you have 2 options 1)Hand carback and walk away and be billed for any damage that falls out of the bvlra guidelines 2) pay the 5k and keep the car which from a mse pov it the best choice providing you have kept on top of the servicing etc... and the bodywork is in good nick i dont see why the car wont do another 100,000 miles volvos are a good sensible car overall

dont take another pcp and then start the whole cycle again and in a few years time be in the same position, yes this car has cost you a fair bit but if you keep it for a few more years then the overall cost per month will come down and you still have a car

as oppsed to getting a new car on pcp and after 3 years handing it back because the baloon is so high (thats the new car pcp trap) so you either get a new deal or walk away with no car, and after about 10 years of doing this you will look back at the money that has been wasted and kick your self

just to give you an idea of how i buy cars

im doing what i like to call a reverse pcp where i put £250 a month away in an account evey month a and after a year i take the £3k i have saved and buy a 3k carwith it, the next year i do the same thing and sell my original car and buy another in year 2 for 5 -6k and then keep doing this for 10 years, and then you will be in a vey very nice car all paid for, i got this idea from my lecturer at college when i was doing motor mechanics, he was driving a 4 year old x5 which he paid 40k cash for and had been buying cars like this for many many years

just thought i would give you another way at looking at things

jmb1

Thanks everybody for input.

The other worrying thing is if I was to attempt a VT I imagine they will try everything to ping me. I'm definitely well under the mileage cap so no issue there but I read somewhere that not using a volvo garage for servicing can be a problem and though I've serviced yearly and book stamped it was with a local garage. I didn't see this mentored in the contract though so I guess id have to ask the finance Co.

Secondly theres some bodywork damage when my wife pranged it on a wall, £300 with to fix. And alloys curbed and scuffed. So I'm wondering, if you attempt VT and they say xyz issue is going to be subject to a fee are you then stuck and have to pay or could i at that point get the work done? I realise I could just get the work done first but if I didn't need to obvs better. Point is once I mention VT am I committing to any fees they might enforce to allow the VT? I'm guessing the car gets taken away and inspected so at that point tricky if wanted to change mind and have it back. No knowledge of any of that.

motorguy

jmb1 wrote: »

Thanks everybody for input.

The other worrying thing is if I was to attempt a VT I imagine they will try everything to ping me. I'm definitely well under the mileage cap so no issue there but I read somewhere that not using a volvo garage for servicing can be a problem and though I've serviced yearly and book stamped it was with a local garage. I didn't see this mentored in the contract though so I guess id have to ask the finance Co.

Secondly theres some bodywork damage when my wife pranged it on a wall, £300 with to fix. And alloys curbed and scuffed. So I'm wondering, if you attempt VT and they say xyz issue is going to be subject to a fee are you then stuck and have to pay or could i at that point get the work done? I realise I could just get the work done first but if I didn't need to obvs better. Point is once I mention VT am I committing to any fees they might enforce to allow the VT? I'm guessing the car gets taken away and inspected so at that point tricky if wanted to change mind and have it back. No knowledge of any of that.

Yes, if you VT thats it, they then bill you for any damage (subject to fair wear and tear guidelines).

jmb1

motorguy wrote: »

Yes, if you VT thats it, they then bill you for any damage (subject to fair wear and tear guidelines).

Thanks. Any experience? Is the bill reasonable and equivalent to the cost of putting the damage right? My guess is not though.

motorguy

jmb1 wrote: »

Thanks. Any experience? Is the bill reasonable and equivalent to the cost of putting the damage right? My guess is not though.

The BVRLA Fair wear and tear guide is here -

https://issuu.com/bfwsn67/docs/fwt_2013_issuu_bmw_group_financial_?mode=embed&viewMode=presentation&layout=http%3A%2F%2Fskin.issuu.com%2Fv%2Flight%2Flayout.xml&backgroundColor=FFFFFF&showFlipBtn=true

Most use that. BUT theres no guidance on cost. Thats the tricky bit.

You can appeal costs though if you think they are too high.

Also, where are you relative to your mileage terms?

jmb1

motorguy wrote: »

The BVRLA Fair wear and tear guide is here -

https://issuu.com/bfwsn67/docs/fwt_2013_issuu_bmw_group_financial_?mode=embed&viewMode=presentation&layout=http%3A%2F%2Fskin.issuu.com%2Fv%2Flight%2Flayout.xml&backgroundColor=FFFFFF&showFlipBtn=true

Most use that. BUT theres no guidance on cost. Thats the tricky bit.

You can appeal costs though if you think they are too high.

Also, where are you relative to your mileage terms?

Thanks that's useful. Mileage is well under at 60k cap and w only do 10 to 11k a year..

If you decide to pay the balloon is the condition irrelevant or do they still charge an extra fee?

jmb1

jmb1 wrote: »

Thanks that's useful. Mileage is well under at 60k cap and w only do 10 to 11k a year..

If you decide to pay the balloon is the condition irrelevant or do they still charge an extra fee?

Crikey, c that's really thorough! Terrifying in honesty, there's many little dinks and issues they'll pick up on. And there's problems that were present on the car when I had it which have got worse eg paintwork bubbling. But I had it delivered from a dealer 200 miles away and they never agreed to sort it.

I'm thinking from reading that whether VT would be a better option if I could avoid the fees via it. But I bet I can't. I'm never doing pcp again! What a headache. My last car was px'd for this one and was on finance and the dealer just asked for a photo and that was it, gone. I'm sure that was pcp as well, so just thought it would be the same, naively.

motorguy

jmb1 wrote: »

Thanks that's useful. Mileage is well under at 60k cap and w only do 10 to 11k a year..

If you decide to pay the balloon is the condition irrelevant or do they still charge an extra fee?

No you just pay the balloon and thats it.

AdrianC

jmb1 wrote: »

Thanks that's useful. Mileage is well under at 60k cap and w only do 10 to 11k a year..

And what's your contracted mileage?

If you decide to pay the balloon is the condition irrelevant or do they still charge an extra fee?

No, if you pay the balloon, you buy it - it's only if it goes back that the condition is checked.

Cambelt becoming due for replacement is no more "things going wrong" than an oil change is. It's scheduled routine maintenance to prevent things going wrong.

As far as paying the balloon, if the car is worth £6k at ~6yo, and there's another year until the end of the PCP, it sounds like it was set about right. You pay the depreciation through the monthlies, plus the interest on the whole amount you borrowed.

motorguy

jmb1 wrote: »

Crikey, c that's really thorough! Terrifying in honesty, there's many little dinks and issues they'll pick up on. And there's problems that were present on the car when I had it which have got worse eg paintwork bubbling. But I had it delivered from a dealer 200 miles away and they never agreed to sort it.

I'm thinking from reading that whether VT would be a better option if I could avoid the fees via it. But I bet I can't. I'm never doing pcp again! What a headache. My last car was px'd for this one and was on finance and the dealer just asked for a photo and that was it, gone. I'm sure that was pcp as well, so just thought it would be the same, naively.

Theres only a (risk of a) headache if you VT.

You can trade your car in no problem and they will value it as is - just like your last car. Had you VT'd your last car you'd have been up against this too.