Misinformed on cost of car

Babyalmie · 30 March at 9:31AM

Hi all

Grateful for some advice. I took my car in for a service recently and while I was there a salesman approached me about buying a new car. I had a PCP on my car at the time which was due to be completed at the end of the year. When the salesman ran the figures he said that at the moment I was £2k in negative equity and I needed to put £3k down on a new car. I decided that it made more sense for me to pay off the rest of the PCP and then look at new cars.
As I was leaving, the salesman said that they were willing to write off the deposit and offer that as a deal and I would only need to pay the negative equity and with the £3k reduction the monthly payments would be lower than my current monthly payments. I asked them to put that in writing which they did. On that basis, it seemed I paid the £500 and then when I collected the car, I cleared the remaining £1500. But two weeks later, the garage called me to say they had under estimated the amount and I needed to send them another £500. I am pretty take aback because I might not have made the decision I made. They have also said that I will need to pay the monthly charge as they haven’t closed the original finance. I am really cross and worried because I made a decision on the basis of the information I was given and what I was given in writing. Am I right in refusing to pay and can I be forced to pay it? I am so worried about paying that extra money and a double finance payment this month.

Babyalmie · 30 March at 9:48AM

sorry to clarify- I paid £500 as a deposit which left £1500 outstanding when I collected the new car and handed over the old one.

Altior · 30 March at 10:13AM

Not easy to follow but obviously if there was a £2K deficit on the trade in, and you've paid £2K in total over and above the original agreement, that nets off to nil. For a £500 effective deposit you would need to have paid £2.5K in total.

Whether they have stuffed up in the basic maths, and/or that gets you off the hook for £500, is hard to say.

Overall, you should have had a GMFV at the end of the PCP, it's not clear how that relates to the negative equity that was calculated.

Babyalmie · 30 March at 10:32AM

So for clarity the offer was to pay £2000 in total to cover the negative equity. The GMFV doesn’t equate to the total value as the garage haven’t told me what the assumed residual value of the car is.

Altior · 30 March at 10:40AM

https://forums.moneysavingexpert.com/discussion/comment/81942753#Comment_81942753

This is the critical point though, so if the £2K was to cover the negative equity, what was the £500 'deposit' for?

Perhaps you could put the details of the deal agreed on here, redacting any personal identifying details.

sheramber · 30 March at 11:07AM

I read it as the garage started with a 3k deposit on the new car and

£2k negative equity on existing car

Total £5k

Then garage agreed to write off deposit leaving £2k negative equity to pay.

OP has this in writing.

OP paid £500 as a ‘deposit’ on the deal to go towards negative equity

Leaving a balance of £1.5k to pay for negative equity.

Now garage have asked for additional £500 and have not paid closed the original PCP , leaving the OP to pay both old PCP and new one.

Babyalmie · 30 March at 11:09AM

In writing I was told £500 as a deposit to allow them to secure the car which “leaves £1500 to write off the negative equity”. The garage have now said the salesman “made a mistake but they are out of pocket”. Therefore I need to pay £500 more. My point is that I might not have made the decision I made as it was finely balanced.

Altior · 30 March at 11:15AM

So no 'deposit' at all on the new arrangement is your interpretation? Yes it would be good to see that in writing, if that was the case.

A significant element hinges on that assumed current valuation of the handed in vehicle (in regard to the value of the deal), but I'd agree this is more about whether they kept to the deal in writing. And of course what the new terms of credit were.