PCP - When and how to cancel/trade in again ?

IAMIAM

I have taken out a 48 month PCP and have been told the sweet spot to change it is 6 months before it expires to maximise the trade in value. Is this correct?

Also, has anyone any experience of returning a car after paying the 50% limit on the total cost (think its called voluntary redemption - the one that doesnt impact your credit file)

In either case, what is the impact with excess mileage charging - or does this only impact when I am returning the car to the finance company? As I presume if I am trading it in or selling it, the finance company mileage charging is irrelevant 

Frozen_up_north

You can ask for a settlement figure at anytime, basically it’s the amount to settle the debt you owe the finance company.

Clearly at the end of the term you can hand over the keys and walk away with nothing, assuming you don’t owe an excess mileage or damage repair bill.

If you want to continue with another PCP, the manufacturer/dealer will offer a “deposit contribution” for you to start another finance deal.

There is a lot of smoke and mirrors involved, as you probably know from taking a PCP.
I bought a new car last November, the advertised price was just over £31,000, there was then a discount of £4,000 and a further loyalty discount of £750… and that was on a cash purchase (well a bank transfer purchase). Contributions towards finance are nothing more than a discount you can obtain by shopping around and buying outright.

You need to talk to the dealership as they will be keen to keep you as a customer.

Ectophile

It rather depends on how popular the car is on the used market.  If nobody wants them, then the best option is to hand the car back at the end of the finance period.  If everybody wants them, then you will get more money trading it in.

Of course, you could pay off the final payment, keep the car, and not lumber yourself with endless credit agreements until the day you give up driving.

XRS200

IAMIAM said:

I have taken out a 48 month PCP and have been told the sweet spot to change it is 6 months before it expires to maximise the trade in value. Is this correct?

6 months is when you are likely to reach Voluntary Termination point.  Lots of people have VT'd cars on PCP.  I doubt maximum trade in  value would specifically be then.

Herzlos

There are far too many variables to generalize the sweet spot. You can trade the car in at any time for it's trade-in value and pay the settlement value. 

6 months before is potentially when dealers will start contacting you to try and upsell you a new car, so that it's ready by the time the PCP expires. 

Excess milege will be charged if you hand it back at the end, but not if you VT or keep it. 

facade

They will charge any excess mileage above pro-rata if you VT.

The FOS have ruled that a reasonable rate is acceptable, but their rulings are not legally binding.

However, if the Finance company were to small claims you for it, the FOS ruling would be persuasive.