Can someone help me understand my options? (PCP and Negative equity)

Nearlyold

Petriix said:

neilmcl said:

Petriix said:

Voluntarily termination (I believe) includes the balloon payment so it's not normally a cost effective option and it certainly won't work in your favour. You just need to weigh up whether you want to settle the finance now (either by selling the car or trading it in) or wait until the end of the agreement. MG are currently offering £4000 off an MG5 EV (in addition to the trade in value) when you trade in any petrol or diesel car, so that's an option.

Do you actually understand what a VT is?

Yes, I do. Do you?
See: https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

The Total Amount Payable is the total amount borrowed plus interest and fees. It also includes the Guaranteed Future Value (GFV) on a PCP. This means that you usually don’t reach the voluntary termination point until very late in a PCP agreement. It is not simply the halfway point of your agreement, as that is unlikely to be anywhere near the 50% repayment point on a PCP.

The Car Expert is mistaken - The Total Amount Payable is NOT "the total amount borrowed plus interest and fees" it's the cash price of the Goods plus interest and fees ie the Total Price the customer will pay to obtain the goods. This means that any part exchange allowance and/or cash deposit paid would count towards achieving the 50% VT point. 
Hypothetically a customer who put down a 75% deposit and borrowed the remaining 25% on HP/Conditional Sale would be able to VT immediately if they so chose (provided the interest to be charged on the agreement amounted to less than 25% of the cost of the car) - though obviously that wouldn't make any sort of financial sense.

StuMcBill

Sorry to revive my old topic, but I’ve ordered a new car, which is due to arrive in September, and currently the finance deal I have been quoted carries the negative equity into my new deal (approx £1200). 

My new car is due around the same time I could VT, checked with Audi Finance. 

Can anyone think of any reason I shouldn’t VT, the Audi and not carry the -ve equity into my new deal?  Suspect it would reduce my monthly payments by +/-£30.

molerat

What charges do you expect to pay if you VT - mileage, damage ?

neilmcl

StuMcBill said:

Sorry to revive my old topic, but I’ve ordered a new car, which is due to arrive in September, and currently the finance deal I have been quoted carries the negative equity into my new deal (approx £1200). 

My new car is due around the same time I could VT, checked with Audi Finance. 

Can anyone think of any reason I shouldn’t VT, the Audi and not carry the -ve equity into my new deal?  Suspect it would reduce my monthly payments by +/-£30.

The deal has been done based on the dealer getting your car, if that changes because you no longer have the car then that may change the conditions of that deal. I'd speak to the dealer first and see what they say.

StuMcBill

molerat said:

What charges do you expect to pay if you VT - mileage, damage ?

I’m way under on mileage (COVID & Working from home), and all I have is a couple of stone chips on the front bumper.

StuMcBill

neilmcl said:

StuMcBill said:

Sorry to revive my old topic, but I’ve ordered a new car, which is due to arrive in September, and currently the finance deal I have been quoted carries the negative equity into my new deal (approx £1200). 

My new car is due around the same time I could VT, checked with Audi Finance. 

Can anyone think of any reason I shouldn’t VT, the Audi and not carry the -ve equity into my new deal?  Suspect it would reduce my monthly payments by +/-£30.

The deal has been done based on the dealer getting your car, if that changes because you no longer have the car then that may change the conditions of that deal. I'd speak to the dealer first and see what they say.

I’ve mentioned to the dealer that I may be in a position to VT, and they would be happy to revise the deal nearer the time I collect my new car.

StuMcBill

Another question, I presume I’d need to put my private plate on retention, inform the finance company of the change of plates, before submitting the VT request.

DrEskimo

No reason you can't. Its basically just trading the car into the finance company for the settlement figure, rather than Audi for a value of -£1,200 of the settlement figure.

Have you checked whether anyone else would offer you the settlement figure or higher? Try WBAC, Motorway.co.uk, or other local garages/dealers.

neilmcl

StuMcBill said:

Another question, I presume I’d need to put my private plate on retention, inform the finance company of the change of plates, before submitting the VT request.

You don't have to inform them but you do need to have the original plates put back on before you VT.

StuMcBill

DrEskimo said:

No reason you can't. Its basically just trading the car into the finance company for the settlement figure, rather than Audi for a value of -£1,200 of the settlement figure.

Have you checked whether anyone else would offer you the settlement figure or higher? Try WBAC, Motorway.co.uk, or other local garages/dealers.

Yeah, tried a few local garages, WBAC are about £1500 short of my settlement, motorway are about £800 short.