Car finance - pcp question

nicwantstobuy

hi all

I’m new to this board. I’ve done a search but can’t find anything recent on this.

My car is coming to end of pcp, I can’t afford the balloon payment that’s not an option.

dealer has advised I have £4000 negative equity on the car.

they suggest I can either build into a new finance package for new car this would give me a new car & be around £100 extra per month, repay the negative equity start again payments would be same or poss bit less than now with new car or request a voluntary termination of contract & start again.

I’ve never heard of a voluntary termination I’ve paid over half the finance on my car. Would this impact my credit score? And any future finance?

Thoughts welcome!

Thank you

Nasqueron

https://forums.moneysavingexpert.com/discussion/6668112/car-finance-pcp-question

Voluntary Termination is a legal right, you can hand it back and walk away, though damage beyond wear and tear can be charged and excess mileage can be an issue

What is the GMV (for a trade in) vs a price on say WBAC?

VT shouldn't affect your credit history (no such thing as a credit score) assuming you are up to date

nicwantstobuy

thank you, what’s GMV & WBAC please?

all payments are up to date.

Keep_pedalling

if you hand back the car at the tif the term you don’t have to pay for negitive equity caused just by depreciation. Damage and excess milage will cost you but not the fact that it has depreciated by more than the original estimation.

born_again

https://forums.moneysavingexpert.com/discussion/6668112/car-finance-pcp-question

Negative equity will only be a issue if you are taking out another finance deal & using your car as P/X.

You can just return car to dealer, hand keys to them & walk away owing nothing.

Then go to another dealer to start all over again.

Nasqueron

https://forums.moneysavingexpert.com/discussion/comment/81996843#Comment_81996843

GMV = guaranteed market value - it's normally the same as the balloon - basically when you take out the PCP that is the amount they say they will guarantee the car is worth for a trade in

WBAC = we buy any car - if the GMV was say £5000 and WBAC are offering £6000 then sell it to them rather than trade in

nicwantstobuy

thanks all, that’s really helpful.

Lots to think about!

martinbainbridge1975

I would get another opinion from a 2nd dealer

Have you exceeded the pcp mileage massively?

As others say above hand the car back to the finance company and walk away but there may be charges if you exceed mileage

Have a look at BVRLA fair wear and tear guide for conditioning of the car, this tells you what fair wear and tear is

XRS200

VT sounds good, compared to financing £4k of negative equity.