PCP Question

JitMistry05

Hello seeking advise on a PCP matter with VW, I agreed a New Car deal last year (June 2021) with expected delivery in 16 weeks, but, due to the chip shortages and current situation in Ukraine, the car wont be in build till April 2022, I have been advised. I had agreed a Part Ex value last year and the settlement value on the the current PCP plan leaving me with a little bit of equity to put towards the new one. I have all the paperwork. The thing is I have continued paying my Monthly plan and hence now have built up further equity. My question is I don't want to put this residual extra equity earnt during the last 9 months into reducing the loan amount agreed as I am quite happy with the monthly payments that has been calculated. I want to take the positive equity as cash back to me, can this be done, or do I need to speak to the dealer and VW Finance.
Example: Paperwork Calculation : Part Ex £14,999 - Original Settlement(June'21) £11,999, Equity £3,000, put towards new settlement: Now: Part Ex £14,999 Settlement(Mar22) £9,499, Equity £5500, (New equity - Original Equity) = £2500, due back to me?

Grumpy_chap

JitMistry05 said:

Hello seeking advise on a PCP matter with VW, I agreed a New Car deal last year (June 2021) with expected delivery in 16 weeks, but, due to the chip shortages and current situation in Ukraine, the car wont be in build till April 2022, I have been advised. I had agreed a Part Ex value last year and the settlement value on the the current PCP plan leaving me with a little bit of equity to put towards the new one. I have all the paperwork. The thing is I have continued paying my Monthly plan and hence now have built up further equity. My question is I don't want to put this residual extra equity earnt during the last 9 months into reducing the loan amount agreed as I am quite happy with the monthly payments that has been calculated. I want to take the positive equity as cash back to me, can this be done, or do I need to speak to the dealer and VW Finance.
Example: Paperwork Calculation : Part Ex £14,999 - Original Settlement(June'21) £11,999, Equity £3,000, put towards new settlement: Now: Part Ex £14,999 Settlement(Mar22) £9,499, Equity £5500, (New equity - Original Equity) = £2500, due back to me?

Yes, that should be something that can be done normally.  You will, of course, need to confirm with the finance company.

The MSE question is why do you want to borrow more than you need to going forwards?

The other question to consider (and get you expectations firm before discussing with the Dealer) is what happens to the value of the PX that was agreed 9 months ago?  On the one hand, you have had 9 months of time and mileage from the car, for free if the PX value does not change.  On the other hand, the PX value may have changed in your favour because of the state of the current used car market.

iwb100

JitMistry05 said:

Hello seeking advise on a PCP matter with VW, I agreed a New Car deal last year (June 2021) with expected delivery in 16 weeks, but, due to the chip shortages and current situation in Ukraine, the car wont be in build till April 2022, I have been advised. I had agreed a Part Ex value last year and the settlement value on the the current PCP plan leaving me with a little bit of equity to put towards the new one. I have all the paperwork. The thing is I have continued paying my Monthly plan and hence now have built up further equity. My question is I don't want to put this residual extra equity earnt during the last 9 months into reducing the loan amount agreed as I am quite happy with the monthly payments that has been calculated. I want to take the positive equity as cash back to me, can this be done, or do I need to speak to the dealer and VW Finance.
Example: Paperwork Calculation : Part Ex £14,999 - Original Settlement(June'21) £11,999, Equity £3,000, put towards new settlement: Now: Part Ex £14,999 Settlement(Mar22) £9,499, Equity £5500, (New equity - Original Equity) = £2500, due back to me?

The answer is almost certainly going to be no. I’ve been in lots of dealers recently and discussing part exchanges and they all say the same thing, they agree a part exchange as though the car is being px’d today and will guarantee the ratio between settlement and the amount they pay you.

So for example they agree to pay you £15K for your car that has a settlement of £10K. That’s based on today. But when your car eventually arrives your settlement will be lower and what they will do is guarantee to pay you the amount needed to ensure the £5K equity remains in the deal.

I will be surprised if they haven’t calculated based on this. And If not then almost certainly they will claim your car value is lower due to more miles and age etc….