PCP - Upgrade or not?

WazBrown

Hi,
I have a car on a 4 year PCP deal that I currently pay about £320 a month and I am currently 1 year into a 4 year PCP deal. I've always purchased my cars this way and is how I like to do it.

However, I've done a check and as a result of the second hand car market I currently have around £2500 equity in my deal already, which is usually unheard of 1 year into a 4 year term. 

I like my current vehicle, however, I'm wondering if financially there is a move to be made here. I don't want to increase my monthly payments but given there is current equity, is there a financially savvy option to take here re perhaps upgrading. Thoughts appreciated from those that understand and know the market / financial model of PCP.

Grumpy_chap

What is the lead time for the new car?  OR will you select a new car based on what is available in Dealer stock?

How much of the equity released will become the upfront payment for the new car on PCP?

The MSE answer would be to sell the PCP car, get the £2.5k equity and buy a car for £1.5k keeping the other £1k in case of any repairs / higher maintenance over the next three years and, meanwhile, put the £320 a month in the bank so you have £11k ready to get the next car after that.

L9XSS

Grumpy_chap said:

What is the lead time for the new car?  OR will you select a new car based on what is available in Dealer stock?

How much of the equity released will become the upfront payment for the new car on PCP?

The MSE answer would be to sell the PCP car, get the £2.5k equity and buy a car for £1.5k keeping the other £1k in case of any repairs / higher maintenance over the next three years and, meanwhile, put the £320 a month in the bank so you have £11k ready to get the next car after that.

I jumped off the pcp merry go round, I resold the car back to AC settled the finance and walked away with nearly 8k. Th opportunity was too good to miss. As per grumpy chap I did something very similar paying 5k for a used private sale car which I’m very happy with 

caprikid1

If you are going to take advantage of the current surge then you are best to cash in your chips add 0-6 months of payments and buy a used car. Switching from PCP to PCP will be waste of time as all you will do is cash in £2500 and spend £6K releasing it as what you need to buy even like for like will be so much more expensive. Only way to benefit is to get off the merry-go-round.

molerat

I thought the price peak was over.  In Dec I was offered £24K, now down to just over £20K - still what I paid for it 26 mths ago though - and now retailing around £23K against £25K+ a few months ago.

motorguy

WazBrown said:

Hi,
I have a car on a 4 year PCP deal that I currently pay about £320 a month and I am currently 1 year into a 4 year PCP deal. I've always purchased my cars this way and is how I like to do it.

However, I've done a check and as a result of the second hand car market I currently have around £2500 equity in my deal already, which is usually unheard of 1 year into a 4 year term. 

I like my current vehicle, however, I'm wondering if financially there is a move to be made here. I don't want to increase my monthly payments but given there is current equity, is there a financially savvy option to take here re perhaps upgrading. Thoughts appreciated from those that understand and know the market / financial model of PCP.

In all likelihood there wont be as good a deal on on any cars that are available right now (new cars are in short supply and manufacturers know it), so whilst you could change "up", its unlikely you'll be driving anything better - you'll just end up in more debt over a longer time.

If you're enjoying the car, consider how long you actually could keep it.  Converting your PCP to a cheap loan, even if over a longer term, would mean you actually own the car.