Overpaying on PCP as mileage has not been as predicted

jonnybiscuit

Greetings - When I took out my PCP agreement in Jan 20, on a used vehicle, my predicted mileage was 25,000 a year. Last year I did about 4000. This year I'm likely to do more, but much less than 25,000 per annum. I'm therefore massively overpaying on my PCP and having spoken with the finance company I've been told there is nothing I can do.

Any one any advice?

Thanks

NSG666

Nothing you can do but hopefully when you get to the end of your contract having lower mileage it will be worth more that the GFV and you can use that surplus towards the deposit on your next car.

Grumpy_chap

You are not overpaying. 

PCP is simply a finance product. 

The forecast value at the end of the term (the balloon payment) takes into account an assumed mileage.

At the end of the term, you do not have to give the car back.  If the value of the car is higher than the balloon payment (perhaps because of lower mileage or perhaps because of market conditions), you can pay the balloon payment and settle the finance and then sell the car anywhere for the high value.

It does not matter if you cannot afford the balloon payment as there are trade buyers that will pay you the value of the car, pay the outstanding finance to the finance company and pay you the remaining balance.

Indeed, you do not even need to wait until the end of the term.  You can sell the car, settle the finance and bank any profit at any time.

DrEskimo

If anything you are saving money.

Higher mileage = lower GFV.
Lower GFV means you are paying more off your balance over the term.
Paying the balance down quicker means you are accruing less in interest charges.

Unless it is 0% APR, pay it off as quickly as you can and you could save thousands in interest charges.