Reducing car PCP outgoings

AlistairS

It was the mini dealer who serviced the car who just got a value from autotrader.  I can afford to continue paying the monthly payments but it leaves think really tight.  I now earn around £15k less than I did when I took the agreement out due to redundancy and having to relocate to find work.

DrEskimo

AlistairS said:

It was the mini dealer who serviced the car who just got a value from autotrader.  I can afford to continue paying the monthly payments but it leaves think really tight.  I now earn around £15k less than I did when I took the agreement out due to redundancy and having to relocate to find work.

Ring around multiple Mini dealers, independent garages and run your own checks on WBAC and similar companies. Get an idea of the range of offers you can expect for the car and compare that against what you might expect for the car as a private sale and what dealerships are selling them for.

If you can get a fair offer much closer to the settlement figure, then you can look at taking out a new credit agreement that covers the shortfall from your current car, and gives you the funds to buy a cheaper replacement.

Do you have any savings at all?

AlistairS

I have used various online pricing tools and some are even worse than the local mini dealer. I have ued the approved mini website and my spec of car, age and mileage are being advertised at close to my settlement figure.  I have around £1K in savings but feel I wouldn't see much benefit putting that into the PCP agreemeent to reduce term or monthly costs.  I would be better leaving that where it is as a buffer.

DrEskimo

AlistairS said:

I have used various online pricing tools and some are even worse than the local mini dealer. I have ued the approved mini website and my spec of car, age and mileage are being advertised at close to my settlement figure.  I have around £1K in savings but feel I wouldn't see much benefit putting that into the PCP agreemeent to reduce term or monthly costs.  I would be better leaving that where it is as a buffer.

Did you ensure you got the car for the best possible price when you bought it (i.e. use online brokers like CarWow to see the discounts available)? If not, that might explain why there is such a shortfall. You might be able to get it closer to -£4k if dealers are advertising them at similar prices to your current settlement. Independent garages tend to be more competitive in my experience.

In any case, trying to roll that negative equity into a new deal would require going for a much cheaper car, and is not something I would advise. Your only other option is to get a loan for around £8k, which would be £250/month over 36months depending on the rate you get offered. Use that to settle any negative equity and then buy a cheap run around with the remaining amount.

I agree, keep the £1k savings as a starter emergency fund.