PCP - Coronavirus

Stevea62

My car is coming to the end of its PCP agreement. Normally I would plan to exchange it for a new car but with showrooms closed that isn't an option. Ideally I would extend the finance until the situation improves but cannot get any response from the manufacturers finance company. Are my only options but it outright or handback?

k3lvc

Who's the manufacturer ? Most are being responsive to queries so surprising that you're not getting any response 

Grumpy_chap

Most PCP / car leases are happy to extend the term if you say that you plan to go with them again when you can.  They normally just ask you to keep paying the same monthly figure.  I don't see any harm in saying that you intend to go again once the normality returns.  If things then change and you can't do as you currently intend, so be it.

bbsirdar

You are lucky, for once, to be in a PCP deal, assuming you have a guaranteed future value. Given  the used car market has completely collapsed, car finance companies are screwed. If you’d owned it you would be looking at a huge hit in terms of lost value.  I have very nice 4x4 sitting on a neighbouring drive that should have gone back end of Mar.  The deal has ended and effectively it doesn't belong to me.  They (BCA) can’t collect due to Covid and that applies to thousands of cars across the UK.  Car auctions aren’t running and expensive stock has piled up as far as the eye can see.  Airfields are also piled up with new stock that should’ve gone out.  PCP was already considered as the next potential “sub prime mortgage time bomb” and this will proved correct £ Billions are tied up in these deals with finance companies underwriting final guaranteed values assuming “normal” market conditions.  Any new PCP deals, if they are ever on the table again, will be nowhere near as good.  I would offer a stupidly low figure to keep your car (assuming you like it) - try half what they wanted as final payment and haggle.  Or buy a 15 year old Golf and wait It out and see where the market goes.

dbrookf

We have a car in the first year of PCP – we are going to do much reduced mileage because of lockdown – can we get reduced payments do you think?

dunstonh

Airfields are also full up of cars handed back after 3 years but not put on the market for 2-3 years and let out in tranches to avoid flooding the market with cheaper second-hand cars and to keep the new car price higher.

sharpe106

No it does not work that way. You get charged for going over your milage but do not get a refund for going under. 

LilElvis

dbrookf said:

We have a car in the first year of PCP – we are going to do much reduced mileage because of lockdown – can we get reduced payments do you think?

Not unless there is a clause in the contract that allows for such a reduction, which is very unlikely. 

Grumpy_chap

dbrookf said:

We have a car in the first year of PCP – we are going to do much reduced mileage because of lockdown – can we get reduced payments do you think?

No, I would very much doubt it.
If the agreement includes a guaranteed future value that can be cleared by making the balloon payment instead of returning the car, you may benefit then if the market value of the car is higher than you need to pay to become the owner of the car.  Remember, though, irrespective of whatever else happens in the used car market, when you come to hand you car back or make the balloon payment, there will be loads of other cars all with 3-months' worth of unused mileage, so your car won't be anything unusual compared to all the rest.

neilmcl

dbrookf said:

We have a car in the first year of PCP – we are going to do much reduced mileage because of lockdown – can we get reduced payments do you think?

I changed job whilst in the middle of a PCP which meant drastically reduced mileage, do you think they gave me a reduction in payment, of course not. As above, this is not how it works, at the beginning of the agreement you're given a the guaranteed future value of what your car should be worth at the end, if, due to your mileage it's actually worth more than that's a good thing for you, you now have some equity to play with. You can either use this for a deposit for a new car, or pay the balloon and keep the car.

[Deleted User]

Stevea62 said:

My car is coming to the end of its PCP agreement. Normally I would plan to exchange it for a new car but with showrooms closed that isn't an option. Ideally I would extend the finance until the situation improves but cannot get any response from the manufacturers finance company. Are my only options but it outright or handback?

If you can't get hold of the finance company how are you going to hand it back? Seems like you could just wait for them to contact you.