Break a PCP

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Simon_23259
Simon_23259 Posts: 2 Newbie
in Motoring
Hi all,

I'm looking for some advice, I have an existing PCP, this is my 2nd one, I traded my original PCP in for a diesel as I was doing more than triple my original milage in a month after a change of job.

I've since seen the light and want an older car now I have other priorities in my life.

Audi have told me that to settle this car I would need to fork out 3k.

I want to know if I could take out a new PCP with them, essentially trading this car in for a new one where Audi absorb the negative equity and apply it to the new finance agreement and then cancel within 14 days if I can, or immediately settle without having driven the car more than 10 miles?

Any advice is welcome

Thanks

Simon
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  • Nobbie1967
    Nobbie1967 Posts: 1,480 Forumite
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    I don't think you understand how PCP works, if you have negative equity, you owe this money irrespective of any future deals you take out, it doesn't get absorbed by the dealer, they just hide it in the monthly payments. If you get a new PCP, you will be stuck with paying the depreciation on another car as well as this £3k.
  • Simon_23259
    Simon_23259 Posts: 2 Newbie
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    You're right, I don't fully understand it which is why I'm looking for advice.

    My first car was about 1k in negative equity which I was told was applied to the new car.

    So if I take out a new PCP and this is then included in the monthly payments, are you saying that even if I settle from day two I will still have the negative equity to settle?
  • Oakdene
    Oakdene Posts: 2,560 Forumite
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    Simon_23259 wrote: »
    You're right, I don't fully understand it which is why I'm looking for advice.

    My first car was about 1k in negative equity which I was told was applied to the new car.

    So if I take out a new PCP and this is then included in the monthly payments, are you saying that even if I settle from day two I will still have the negative equity to settle?


    As in pay off the total contracted price?


    If this is what you mean then it, the negative equity, will already form a chunk of the total amount.
    Dwy galon, un dyhead,
    Dwy dafod ond un iaith,
    Dwy raff yn cydio’n ddolen,
    Dau enaid ond un taith.
  • k3lvc
    k3lvc Posts: 4,174 Forumite
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    If you think you've found a magical way of getting out of the £3k then forget it.

    You walk into dealer with your car and start a new PCP on a £15k car you'll owe £18k (plus any interest). Assuming you then cancel new PCP you'll still owe £18k but only have a £15k car (assuming any grace period - a £12k car if not :rotfl:)
  • motorguy
    motorguy Posts: 22,479 Forumite
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    Simon_23259 wrote: »
    Hi all,

    I'm looking for some advice, I have an existing PCP, this is my 2nd one, I traded my original PCP in for a diesel as I was doing more than triple my original milage in a month after a change of job.

    I've since seen the light and want an older car now I have other priorities in my life.

    Audi have told me that to settle this car I would need to fork out 3k.

    I want to know if I could take out a new PCP with them, essentially trading this car in for a new one where Audi absorb the negative equity and apply it to the new finance agreement and then cancel within 14 days if I can, or immediately settle without having driven the car more than 10 miles?

    Any advice is welcome

    Thanks

    Simon

    The holes in your plan :-
    • If you cancel the agreement, you'd still owe the dealer all the money you commited to pay for the car including the £3K negative equity
    • Buying another car to get out of negative equity will lead to even more negative equity.

    Either
    • Find the £3K to pay the negative equity
    • Drive the car to the end of the term and hand it back
  • almillar
    almillar Posts: 8,621 Forumite
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    My first car was about 1k in negative equity which I was told was applied to the new car.

    In which case, you hand the car back, walk away, and into another dealership. Start from £0, not -£1,000.

    They will allow you to start another PCP, they'll love it. They will not 'absorb' any loss, they'll wrap it up into your new PCP. Just watch what they'll expect you to pay!
  • Arklight
    Arklight Posts: 3,172 Forumite
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    It must be fun driving an Audi. Vroooooooooooooommm!
  • Mercdriver
    Mercdriver Posts: 3,898 Forumite
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    Watch out, OP, you'll soon see an Autorader ad for an old Almera... ;)
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    Best thing you can do is hand them the 3 large and the keys to the car - hopefully you havent damaged it.

    Then go and buy another cheaper car for cash using a bank loan or something else.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
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    Simon_23259 wrote: »
    You're right, I don't fully understand it which is why I'm looking for advice.

    My first car was about 1k in negative equity which I was told was applied to the new car.

    So if I take out a new PCP and this is then included in the monthly payments, are you saying that even if I settle from day two I will still have the negative equity to settle?
    Yes, absolutely.


    "Straight" PCP - you walk in, "buy" a £15k car. You borrow £15k. If you cancel, you hand back £15k car, you no longer owe £15k.

    PCP with £3k -ve equity - you walk in, "buy" a £15k car. You borrow £18k. If you cancel, you hand back £15k car, you no longer owe £15k. You still owe £3k.
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