VW Financial Services PCP - Negative Equity

wibbly_wobbly_wonder

I am around 3.5 years through a 4 year PCP on an ID3 electric car.  I've managed to save the final payment to settle the finance of around £11,900 but if I value my car on any of the online valuation tools it says I'd get around £9,500 depending on the website.  I also went to my dealer to test drive a new car and they said they could offer £10,500 as a part ex but I should just hand it back under a voluntary termination.  

Either way I am in negative equity and the cost of buying a new car seems crazy at the moment so I thought I would likely hang on to it as I'm under the mileage, have looked after it and I don't need a new car.

The challenge is that in another 5 months I am going to have to pay almost £12k for a car which is likely going to be only worth £9k by then.  The current cheapest on VW's own used page is £12,190 for a better spec model which VW no doubt have to spend money on to collect, check over, warranty, MOT, service etc to get it ready for a resale so my question is this..

What options do I have, or is there any precedent, to negotiate on the settlement figure down based on the fact EV's have come down SO much in the last few years?  Surely they don't want another one they are going to have to lose money on?

jackrack

sell it privately and put it all on red 🎰

DrEskimo

Either do VT now or hand back to the finance company at the end of the term and buy the higher spec second hand model for the same amount.

I've never seen any evidence of people negotiating on the GFV. It's in your contract.

wibbly_wobbly_wonder

Thanks, they let you refinance it though so I'll try that route first and see if they value the car accordingly, if not I'll hand back.

Nasqueron

The GFV is the remainder of the invoice for your finance deal, they won't negotiate it down as you owe that much to keep the car. Why not keep it if it's a good runner, the car is worth about 20-30% less than you paid the second you drive it off the forecourt, worrying about the car being worth £1k less and then starting a new deal to pay another 20-40k is madness

DrEskimo

wibbly_wobbly_wonder said:

Thanks, they let you refinance it though so I'll try that route first and see if they value the car accordingly, if not I'll hand back.

Yes, but you won't be able to change the amount you finance.

Nasqueron said:

The GFV is the remainder of the invoice for your finance deal, they won't negotiate it down as you owe that much to keep the car. Why not keep it if it's a good runner, the car is worth about 20-30% less than you paid the second you drive it off the forecourt, worrying about the car being worth £1k less and then starting a new deal to pay another 20-40k is madness

The OP is not indicating they want to move to another new car. Simply that today they have the opportunity to pay £12k for their current car, whereas they could pay the same £12k on another equal used car with a better spec. 

Nasqueron

DrEskimo said:

wibbly_wobbly_wonder said:

Thanks, they let you refinance it though so I'll try that route first and see if they value the car accordingly, if not I'll hand back.

Yes, but you won't be able to change the amount you finance.

Nasqueron said:

The GFV is the remainder of the invoice for your finance deal, they won't negotiate it down as you owe that much to keep the car. Why not keep it if it's a good runner, the car is worth about 20-30% less than you paid the second you drive it off the forecourt, worrying about the car being worth £1k less and then starting a new deal to pay another 20-40k is madness

The OP is not indicating they want to move to another new car. Simply that today they have the opportunity to pay £12k for their current car, whereas they could pay the same £12k on another equal used car with a better spec. 

I mean if you read the first paragraph, sentence 3 is literally saying they were test driving a new car and looking to part-ex the old one.

DrEskimo

Nasqueron said:

DrEskimo said:

wibbly_wobbly_wonder said:

Thanks, they let you refinance it though so I'll try that route first and see if they value the car accordingly, if not I'll hand back.

Yes, but you won't be able to change the amount you finance.

Nasqueron said:

The GFV is the remainder of the invoice for your finance deal, they won't negotiate it down as you owe that much to keep the car. Why not keep it if it's a good runner, the car is worth about 20-30% less than you paid the second you drive it off the forecourt, worrying about the car being worth £1k less and then starting a new deal to pay another 20-40k is madness

The OP is not indicating they want to move to another new car. Simply that today they have the opportunity to pay £12k for their current car, whereas they could pay the same £12k on another equal used car with a better spec. 

I mean if you read the first paragraph, sentence 3 is literally saying they were test driving a new car and looking to part-ex the old one.

Yea good point actually...re-reading it, it's not clear what the OP will be doing if they can't renegotiate their GFV (which we strongly suspect they can't, but I guess worth asking...).

Perhaps the OP can clarify

sheramber

I think the comparison of his car and the higher spec second hand one was pointing out that VW would incur costs for collecting his car and preparing for it  sale against what they could then sell it for. The higher spec one was selling for little more than what they were losing if he handed it back. 

DullGreyGuy

wibbly_wobbly_wonder said:

I am around 3.5 years through a 4 year PCP on an ID3 electric car.  I've managed to save the final payment to settle the finance of around £11,900 but if I value my car on any of the online valuation tools it says I'd get around £9,500 depending on the website.  I also went to my dealer to test drive a new car and they said they could offer £10,500 as a part ex but I should just hand it back under a voluntary termination.  

Either way I am in negative equity and the cost of buying a new car seems crazy at the moment so I thought I would likely hang on to it as I'm under the mileage, have looked after it and I don't need a new car.

The challenge is that in another 5 months I am going to have to pay almost £12k for a car which is likely going to be only worth £9k by then.  The current cheapest on VW's own used page is £12,190 for a better spec model which VW no doubt have to spend money on to collect, check over, warranty, MOT, service etc to get it ready for a resale so my question is this..

What options do I have, or is there any precedent, to negotiate on the settlement figure down based on the fact EV's have come down SO much in the last few years?  Surely they don't want another one they are going to have to lose money on?

They've been charging you interest on the £12k for the last 3.5 years so unlikely that they have lost money.

I would be highly surprised if they entertained any form of negotiation on the balloon payment, I had a more extreme negative equity on our last PCP and they simply weren't interested, pay it or hand it back were the only two options. 

We were not too serious about keeping the car so left it at that but a google of its registration plate shortly after showed it had been listed in an auctioneers catalog so in principle could have potentially bought it back at a lower than balloon price via the auction had I really wanted it.