PCP Advice needed !

BushmanJoe

Hi, 

I’m after some advice re a PCP finance deal.

My present deal ends in February 26 with  approx £3000 outstanding. The car is in negative equity to the tune of approx £1000.

The mileage is significantly over too due to taking car when I had a short commute, within 2 months I had been made redundant and found work 25 miles away which hammered the mileage. All payments have been made on time over the near 4 years of the pcp. The car has done 98000 miles and I desperately need a car to commute. 

I also presently have poor credit at present. 

I have been offered finance at a high rate

Could I voluntarily terminate , pay the mileage excess or is possible to get a car loan that could the outstanding finance or mileage excess could roll into?

I’m confused as to how to proceed so would appreciate thoughts / ideas/ experiences etc.

Thanks

Andy

Mildly_Miffed

Can you clarify?

You've got three months left to pay until the deal ends in February. If all the payments have been made on time, why is there £3k outstanding? Unless the PCP is a grand a month...?

How much is the excess mileage payment? If it's more than the grand shortfall between its value and the balloon, you may be better off looking to sell it to a trader who'll pay the balloon with you covering the gap.

The situation around your existing PCP is completely separate to how you're going to afford a replacement car. I'd suggest looking at something cheap rather than taking finance out. Is there a public transport alternative for your commute?

BushmanJoe

Hi, sorry, I meant to say the balloon payment will be c. £3000 and the excess mileage will be £1,400

Keep_pedalling

BushmanJoe said:

Hi, sorry, I meant to say the balloon payment will be c. £3000 and the excess mileage will be £1,400

How much is the car worth?

jimjames

BushmanJoe said:

Hi, sorry, I meant to say the balloon payment will be c. £3000 and the excess mileage will be £1,400

If the balloon payment is made then there is no excess mileage charge as you own the car

DrEskimo

What is the current value based on?

Make sure to get a wide range of quotes, from the dealer to local garages and online brokers. It’s not uncommon to see big variation in prices offered and it’s possible someone will offer you what I currently owes at its present mileage. 

It would then just be about negotiating another finance deal on another car, but I would strongly recommend looking at options to just buy out this car and not going on a constantly merry go round of car finance every 3/4yrs. It’s likely costing you a lot in interest….

facade

BushmanJoe said:

Hi, sorry, I meant to say the balloon payment will be c. £3000 and the excess mileage will be £1,400

Then it would be simplest to get a loan for whatever you need to have £3000 and pay the balloon, then you have a car (that is only worth £2000 you reckon, but don't have to pay £1400 excess mileage so you are £400 up plus whatever it would have cost to change cars (like insurance "admin" charges), even if you could have bought a good one for £2000).

If you VT they can still come after you for the mileage charge. (People will advise that you don't have to pay, but you may end up testing that in Court and finding out)

Mildly_Miffed

BushmanJoe said:

Hi, sorry, I meant to say the balloon payment will be c. £3000 and the excess mileage will be £1,400

So...

The car is "worth" £2,000.
You have a choice between paying £3,000 and driving away... or £1,400 and walking away.
You need a car.

This is an absolute no-brainer.

Goudy

Pay the £3000 and keep the car.

Ok you are potentially  borrowing another £3000 plus the interest but if you pay that off asap there will still be some value in the car when it's paid off.

You obviously need a car and at this sort of price range and it's probably a case of better the devil you know.

By the looks of the GFV and mileage on this current car/deal, you probably didn't buy it new but bought it used on a PCP deal.
As you found out, PCP on used isn't really good value and to do it again on a used is certainly going to cost you a lot more going forward based on your new mileage.

If that is your only route for another car, it's out of the fat and into the fire on your next and by the sounds of it you could probably do with some time to build up your credit rating.
Having one credit settled on your record is good but taking another will impact it again, that is until you settle that one and now you have two settled.

There's probably not a lot of interest to save in these last few months on any early settlement figure, so your settlement figure now isn't going to be much different than the GFV which is due in 3 months as they will charge you 56 days interest to settle.

So if it was me, between now and when the GFV is due I would scrape and save every penny which would reduce what I had to borrow and then borrow the rest to pay the GFV.
I'd then use the car until I at least paid off the loan I took to pay the GFV and carry on as long as you can as it sounds like you might have some other financial issues to sort.

prowla

As per a couple of other comments: the excess mileage only applies if you are handing the car back.

Effectively it's a gurantee to the finance company for when they sell it on.

If you pay off the balloon then the mileage is none of their concern.

So, the question is:

Given that you have to pay £1400 either way, is the car worth £1600?

born_again

BushmanJoe said:

Hi, 

I’m after some advice re a PCP finance deal.

My present deal ends in February 26 with  approx £3000 outstanding. The car is in negative equity to the tune of approx £1000.

The mileage is significantly over too due to taking car when I had a short commute, within 2 months I had been made redundant and found work 25 miles away which hammered the mileage. All payments have been made on time over the near 4 years of the pcp. The car has done 98000 miles and I desperately need a car to commute. 

I also presently have poor credit at present. 

I have been offered finance at a high rate

Could I voluntarily terminate , pay the mileage excess or is possible to get a car loan that could the outstanding finance or mileage excess could roll into?

I’m confused as to how to proceed so would appreciate thoughts / ideas/ experiences etc.

Thanks

Andy

If you have already been offered car finance at a high rate. Then you have already answered the 2nd part.

Just look & see if you can get a personal loan for the Balloon payment & keep the car. Or see if you can trade in & get a cheaper PCP deal on a new car with the correct mileage declared.