Car on PCP deal with Blackhorse

SarahD86

Sorry for the long post
I have a car (13 plate Seat Ibiza 1.2 S AC) on a PCP deal with blackhorse. It ends in April and don't want to buy the car so my options are give it back or trade it in.

Ran into some financial problems over a year ago and missed 2 services on it but never missed a payment. Finally getting back on my feet now thankfully. It needs a couple repairs (cheap ones) that should be done before agreement ends. The settlement figure currently is just over £2100, balloon payment is £1900. I understand that if I give the car back, they will want money from me because it hasn't been looked after according to their T&Cs etc. Would they accept payment arrangements for this if that's the choice I made? Surely a few stone chips and missed services wouldn't add up to too much extra cost? Aside from that the car runs good and clocked less miles than the agreed limit.

And if I was to trade it in, how easy would it be realistically? How easy is it to trade with negative equity? I live rural so a car is quite essential or I'd happily give it back and take the bus. I decided if I trade it in id look at a 2.5-3K car max as the cheaper the car, the less I have to fork out, the more my trade car will cover the cost and quicker I will own it and be free of debt.

Is this a realistic way of thinking or am I living in dreamland, expecting that the outcome will be okay either way? I regret ever financing a car tbh, but trading negative equity to another financed cheap runabout seems the only way atm. Honest answers please, won't be offended as I'm not the first and won't be the last to regret finance and get into sh#t situations. Thanks. If this isn't the right part of the forum for the best advice please let me know

Nearlyold

Can you explain why you don't want to pay the balloon and keep the car as that would seem the simplest and lowest cost solution.

SarahD86

A) I don't have £1900 to buy it. If I did I'd have no problem in returning, paying the missed service costs and buying a cheap outright car to get me about. I chose PCP so that I could change car after the 2 years for something different or I'd have went for HP to own it at then end. C) Even if I did have the money it's now too small for my needs so wouldmt be worth it. It was never my intention to buy the car. Always knew I'd give it back or trade it in but didn't expect the money troubles that came along in between.

Edi81

Your logic doesn’t make sense. Trading it in for a £2-£3k car doesn’t make sense.

Can you get a loan for the balloon or a money transfer credit card? Black Horse May be able to offer you Finance for the balloon.

SarahD86

Because my understanding is that a dealer can (at their discretion) pay off your finance when taking your car as a trade in and any negative equity will be added to the new cars price tag on a new finance deal, in other words in just carrying the debt from one car to another to pay more but over a longer period. Dealer gets a car for less than its worth to make a profit on, and sells another car to me for more than its worth. No upfront costs, no deposits etc and would get a HP this time meaning I own the car at the end so no worrying about balloon payments or trade ins. Feel free to correct me if I'm wrong but that's what I was told I could do when I got the car. Sounds stupid I know and I accept that I'm an idiot for getting into this situation, just trying to consider all my options whilst hoping to avoid the last resort of just giving it back then having no car at all.

Nearlyold

Just get a loan for £1900, pay the balloon and get the car serviced (if not already done). No other course of action makes any financial sense at the moment. You can always trade in the car for a larger one at a later date if you really do need a big car to carry loads of kids or stuff around.

DrEskimo

What trade value have you been given?

Have you asked different dealerships (both main and independent) and different online valuation companies to get a range of prices?

SusieT

I would get a loan for the £1900 and keep the car for a while, pay down the loan as fast as possible and then save what you would have paid in finance and interest until you can either sell this one and buy another with what you have saved, or PX it for another and add the savings to buy outright. Keep saving what you would have paid in finance and interest and later do the same until you have an upgrade. It may not be the ideal car at the moment but realistically the way you are thinking will end up with you being in a downwards spiral of increasing negative equity until you are too far in to escape.

foxy-stoat

I wouldn't rush into taking out another PCP deal when you are in this position. You will be trading your car in for less than its worth AND paying interest on the balloon payment for another 2,3 or 4 years.

Seems crazy and not what PCP's are for...the salesperson will be loving it though.

molerat

Was the service(s?) carried out late or missed altogether ? Missed services can severely reduce the trade in value of an otherwise good car but that effect will lessen as time goes by. As others have said if the car is a good runner it will likely be the best option to get a loan and think about getting another car when you can better afford it.

AnotherJoe

SarahD86 wrote: »

Because my understanding is that a dealer can (at their discretion) pay off your finance when taking your car as a trade in and any negative equity will be added to the new cars price tag on a new finance deal, in other words in just carrying the debt from one car to another to pay more but over a longer period. Dealer gets a car for less than its worth to make a profit on, and sells another car to me for more than its worth.



And how is that a good deal for you?!:eek:


No upfront costs, no deposits etc and would get a HP this time meaning I own the car at the end so no worrying about balloon payments or trade ins.


Very short term thinking as you were when you skipped the services (which will have depreciated the car more as well.


Feel free to correct me if I'm wrong but that's what I was told I could do when I got the car.

Well you could do that, the point is, should you?
Sounds stupid I know yep it does and I accept that I'm an idiot for getting into this situation, just trying to consider all my options whilst hoping to avoid the last resort of just giving it back then having no car at all.

Take out a loan so you own the car and then pay off the loan as quick as you can. If this current car is decent and you know its history why risk buying a different cheap one whose unexpected maintenance costs in a year or two could cost you dearly?