Negative Car Finance

Linda62

How can a Car worth 32k new last year in 2024 and a year later is only worth 12K? this has put me in a MASSIVE Negative Car Finance which is only going to get worse the longer i
I keep my car surely? this does not seem fair and who puts the price on cars worth? the car has only 3k on clock with full service history and in an immaculate condition! I cannot understand how it has lost so much in just a year! that more than 50%!!!!!!! I am on PCP so cant hand the car back - the car is a Nissan leaf n-connecta 2024 

RandomTourist

Put simply, the price of something is what someone is prepared to pay for it. 

We might be able to give more help if you were to tell us: what  age, mileage etc when you bought it? How you have decided it's "worth" £12k now?

daveyjp

Not sure what the issue is.

The vehicle is on a PCP, you are only renting it, the issue of the depreciation sits with the finance company, not you the renter and the figures would have been given you when the vehicle was rented to you.

What is the GFV?  That is the depreciation over the term of the PCP.

Keep_pedalling

The main problem is that you paid list price, and the leaf was getting very long in the tooth in 2024 and with the totally new leaf being released this year they were being heavily discounted to shift the remaining stocks which obviously has had an impact on 2nd hand prices. Ongoing depreciation is going to be relatively low now that the car has reached its current value.

You say you are on a PCP contract which means you can just give the car back at the end of the PCP contract and not pay the final balloon payment, which is likely to be more than the car is worth. 

MyRealNameToo

Linda62 said:

How can a Car worth 32k new last year in 2024 and a year later is only worth 12K? this has put me in a MASSIVE Negative Car Finance which is only going to get worse the longer i
I keep my car surely? this does not seem fair and who puts the price on cars worth? the car has only 3k on clock with full service history and in an immaculate condition! I cannot understand how it has lost so much in just a year! that more than 50%!!!!!!! I am on PCP so cant hand the car back - the car is a Nissan leaf n-connecta 2024 

Presumably it wasn't a 1 year PCP?

What is the balloon on the car? 

Negative equity can only get so bad, and the depreciation curve for each car is different, whilst its lost 60% of its value in year one that doesnt mean it will lose 60% of its remaining value this year. The 2023 models currently on autotrader are around £11k so a much more modest drop. 

You are effectively hiring the car right now, as long as you dont write it off (unless you have GAP insurance) you are ok. What will matter is at the end of the PCP period what the balloon payment is and what the car is worth. If the balloon is materially more than the cars worth you'd sensibly give the car back and walk away. If the balloon is smaller you buy the car and keep it or trade it in or whatever. 

Mildly_Miffed

You should be happy that it's on a PCP - when the term ends, you hand it back and walk away. The actual value makes no difference.

As others have said, the Leaf was an old design (launched 2017) in a fast-moving market sector. It was WELL behind the game when production ended last March, and heavy discounts were rife. The announcement this March of the replacement, shown in June, has definitely hit values hard, and it won't be helped further when the new ones actually reach showrooms towards the end of the year.
This makes year-old cars like yours an absolute bargain, but doesn't help you.

I hope you have gap insurance, in case of the car being stolen or written off.

facade

As Mildly_Miffed says, you absolutely must have gap insurance if there is significant negative equity, because writing it off, or having it stolen is the only way that negative equity can affect you- it isn't your property/asset! (Your insurer pays out the £12K that the car is worth, but your settlement figure is £30K or something, so you are on the hook for £18K unless you have gap insurance to fund the difference)

I seriously doubt if you can buy gap insurance for the £32K today, they'd be mad to offer it! You can probably get it for the current market value though if the value continues to drop like a stone.

Otherwise try not to laugh at the tears in the eyes of the finance company representative when they collect their virtually worthless car that they valued at £16K at the end of your hire  

(I seriously doubt if they will lose anywhere near what they claim, they didn't pay anywhere near the £32K RRP)

WellKnownSid

Linda62 said:

How can a Car worth 32k new last year in 2024 and a year later is only worth 12K?

I am surprised it’s been sold at anywhere near £32k recently. These are an older design with a 2010 interior, no battery cooling and come with the wrong charging port.   I remember as far back as 2022 they were being sold at £25k new then £21k new in 2023. I saw some in 2024 on for £18k new and there have always been £15k-16k pre reg deals around.

When we bought our Zoe they were £32k new and our local dealer wanted £19.5k for their 13 month old car with 11,000 on the clock. Told the salesman I wanted to pay under £15k and I was promptly escorted out of the showroom 😂

Two weeks later we picked up an 11 month old car with under 3,000 miles on the clock in the colour the wife wanted for £13k, main dealer approved used.

Just hand the car back at the end of the PCP term and you’ll be fine.

paul_c123

Linda62 said:

How can a Car worth 32k new last year in 2024 and a year later is only worth 12K? this has put me in a MASSIVE Negative Car Finance which is only going to get worse the longer i
I keep my car surely? this does not seem fair and who puts the price on cars worth? the car has only 3k on clock with full service history and in an immaculate condition! I cannot understand how it has lost so much in just a year! that more than 50%!!!!!!! I am on PCP so cant hand the car back - the car is a Nissan leaf n-connecta 2024 

Where are you getting those valuations from, and on what basis?