Possible to end a pcp and get hp/bank loan?

dkts

Hi all,

Was wondering, is it possible to take a pcp out, on say car “A”, for 3 years with “X” amount deposit and then when the contract finishes return car “A” but instead of swapping/taking out a new car (Car “B”) on pcp using car “A” as the deposit, could you take out new car “B” on hp or even get a bank loan to pay for it? (Still returning Car A as the deposit).

I hope that made sense. In other words with pcp theres 3 options At the end of the contract:

1) pay the final balloon payment.
2) give the car back as the deposit and take out a new car on pcp with it
3) give back the car and call it quits

but is it possible to:

4) give the car back as the deposit and take out a new car on hp with it?

Thanks!

dkts

dkts said:

Hi all,

Was wondering, is it possible to take a pcp out, on say car “A”, for 3 years with “X” amount deposit and then when the contract finishes return car “A” but instead of swapping/taking out a new car (Car “B”) on pcp using car “A” as the deposit, could you take out new car “B” on hp or even get a bank loan to pay for it? (Still returning Car A as the deposit).

I hope that made sense. In other words with pcp theres 3 options At the end of the contract:

1) pay the final balloon payment.
2) give the car back as the deposit and take out a new car on pcp with it
3) give back the car and call it quits

but is it possible to:

4) give the car back as the deposit and take out a new car on hp with it?

Thanks!

***4)or even use a bank loan rather than hp to pay for the car

ComicGeek

Option 2 only works if the value of the car is more than the final balloon payment. The new deposit is still only the difference between the 2, not the full cash value of the car. You don't actually own the car until you've paid the final balloon payment, that seems to catch a lot of people out on pcp. So final balloon payment of £5k, you could sell the car for £6k, you have £1k deposit.
Option 4 is the same as above but with hp finance rather than pcp. No final balloon payment but larger monthly payments to compensate. 

DrEskimo

Of course you can. You can buy the next car however you like.

Mercdriver

I think the OP is under the illusion that Car A will have loads of equity in it and next car won't cost anything for a deposit.  That is very unlikely as there is, if the finance house gets things right little or no equity in the car until very near the end of the term.  You might get to the end and find an offer where the deposit is very low, but that is not guaranteed.  Anyone whose PCP is coming to an end now has a good choice of offers, but the same might not be said for 3/4 years time.

tim_london

Answer is no.

PCP balloon payment are take it or leave it offer.  If you think the car is worth more than the balloon payment, then you need still need to pay it first then sell it to fund your next deposit.

AdrianC

dkts said:

Was wondering, is it possible to take a pcp out, on say car “A”, for 3 years with “X” amount deposit and then when the contract finishes return car “A” but instead of swapping/taking out a new car (Car “B”) on pcp using car “A” as the deposit, could you take out new car “B” on hp or even get a bank loan to pay for it? (Still returning Car A as the deposit).

I hope that made sense. In other words with pcp theres 3 options At the end of the contract:

1) pay the final balloon payment.
2) give the car back as the deposit and take out a new car on pcp with it
3) give back the car and call it quits

but is it possible to:

4) give the car back as the deposit and take out a new car on hp with it?

Thanks!

You take car A on PCP.
At the end of the term, you have a choice - return the car, or pay the balloon and keep it.

Car B's purchase, however financed, is completely separate from car A - apart from if A is worth more than the balloon, you can PX it, and the dealer will pay the balloon off and then put whatever is left of the PX value towards your purchase.

The "deposit" on a PCP isn't a returnable security deposit - it's an up-front payment which reduces what you pay off over the term.

KQM

My car on PCP was no longer practical for our situation plus very expensive on monthly payments.  I had one year left on my PCP so had the car valued by a dealership and it was £1200 under my settlement figure.  We done the maths and it was still better value to trade in so I paid the £1200 on top of the deposit for the new car which I have now financed on HP.   So yes, option 4 can be done.  It just depends if you have equity or not 

bazzyb

tim_london said:

Answer is no.

PCP balloon payment are take it or leave it offer.  If you think the car is worth more than the balloon payment, then you need still need to pay it first then sell it to fund your next deposit.

Not quite, it could be sold to a trader, either as a PX or as a straightforward sale to the likes of WBAC/Evans Halshaw/Arnold Clark/etc...

However as stated previously, only works if there is any positive equity left in the vehicle at the end of the term.