Options upon ending a PCP and moving to a PCH

ftg

I have a BMW 4 series on PCP which I now can voluntarily terminate (VT). The best deal I can find to get a new BMW (3 series) with the Tech Pack, this time is with Vanarama on PCH, £2k less deposit and about £30 less per month than the dealership have quoted with the option to terminate should a life changing event occur eg redundancy, ill health to name but two. I have provisionally placed an order for this car which I can still cancel.

My options are;

• I can VT and hand the car back but may have to pay for anything the inspection of the car finds. There is nothing wrong with it in my view, it's recently had a health check which only flagged windscreen wipers as an amber (£53 to replace which I declined), the tyres weren't flagged. There are no scratches that I can see and certainly no dents. I've never ended a PCP like this, just part exchanged for another car. I know the inspections are subject to guidelines and there is a pricing matrix but don't know how harsh or otherwise they can be.
• Pay the settlement fee on my 4 series and sell it to the local dealership, subject to their inspection, for a £400 profit. The issue here is that I would have to sell my car at the point when my new car arrives at the end of the month and hope the offer quoted doesn't drop by much. I could also sell it via Motorway which gives a general guideline quote of £1k more than my local dealership, subject to inspection.

I am a bit disappointed there isn't much equity in the car - it has done just less than 21k miles and at this stage the future value was based on almost 29k miles. Apparently though an SE, unlike an M Sport, doesn't hold its value.

Has anyone had any recent experience with something like this?

AdrianC

The BVRLA fair wear and tear guide is widely available online, and is the industry standard. It's very well documented as to what's acceptable and what isn't.
https://www.alphabet.com/en-gb/bvrla

As far as depreciation vs balloon goes, if you've got £400-1000 equity in it before the end of the term, sounds like the depreciation has been lower than expected when the balloon was set. From there on in, it's hassle-factor-versus-benefit as to which of the two options you take, return or pay balloon.

DrEskimo

VT when there is equity in the car would just be throwing money away.

Even if at the end of the month the difference is smaller, or the same, it would still be far less hassle than going through VT. You only have to look at some of the threads on here about random charges into £1,000s being asked for months after collection...

There is no need to settle the finance before selling it to the dealer. They will purchase and settle the finance on your behalf.

By the way, you don't have to just accept whatever valuation is given. I used a similar tool to Motorway on my previous car, but spent some time negotiating on the price to a figure I thought was fair. Likewise, you can just ring local dealers/garages and ask them if they would be interested in purchasing it. 

BOWFER

DrEskimo said:

You only have to look at some of the threads on here about random charges into £1,000s being asked for months after collection...

I've been doing PCH/PCP with umpteen different companies for a very long time now and never been hit for a single penny - not one.
I'd love to know what these other people are doing differently/wrong.

Grumpy_chap

This thread is difficult to understand as, on the face of it, the OP is considering VT a 4-series to jump into a 3-series.  They are not that different a car.

As I understood it, VT was introduced to give the consumer an "out" when they need it, not just for want.  There are differing comments in the forum as to whether exercising VT is viewed negatively by lenders and may impact future credit.  Also differing comments about the extent to which anything extra needs to be paid, for example if mileage is pro-rata higher than the PCP allows up to that point.

On a PCP, the VT point is not usually reached until very late in the cycle because of the balloon payment.  Simply being half way through the time is unlikely to be sufficient.  If the OP is nearly through the PCP term, then it may be preferable to see the term to natural conclusion.

Either way, the PCH that the OP is considering is likely to be a lease rather than finance deal and therefore less flexible in the future if the OP needs to end early (though I note the OP's comments about life-changing events).

To aid posters in providing appropriate support, it may help if the OP advises the driver behind wanting / needing this change of vehicle now.