Advice about ending PCP early.

LDJ67 · 20 March 2019 at 11:32AM

Hi.
Will try & explain this as best I can....

So I have a 3 door corsa on a 4 year pcp, 4 years will be up April 2020, I have a wee boy now and really struggling with the 3 door.

So with pcp at the end of the 4 years, I would either hand the car back or pay the final figure or get a new car. I'd be getting a new car, so wouldn't pay the balloon payment, I went to a car dealership a few days ago, he offered 5k for my car, so I'm thinking, well I only have 12/13 months of payments before I can hand it back so I'm in equity, but the dealership says I need to pay the full finance, as in the balloon payment also? Has anyone any experience with this before I phone the finance company.

Hoping this makes sense....

Thanks in advance.

foxy-stoat · 20 March 2019 at 12:07PM

You will only own the car in 13 months time if you pay the balloon payment, so you cannot part exchange it without the full finance being paid.

You are probably not or will ever have equity.

DrEskimo · 20 March 2019 at 12:41PM

As above, the assumption you will have equity is not quite accurate. You need to ask for a settlement figure and see how that weighs up against the dealers trade in value of £5k.

If you have all the details of the finance agreement (price, deposit, monthly payments, APR, balloon payment, any fees, etc.), it is easy enough to get an estimate of what this is likely to be.

LDJ67 · 20 March 2019 at 1:23PM

Thanks for responding.
I'll give the finance company a call. The dealership said with the trade in value of the car and I pay 200 towards it that'll pay off my finance then another guy said I'd need to put 400 towards it, I'll call the finance company and get an exact settle figure from them.
Thanks again.

foxy-stoat · 20 March 2019 at 1:30PM

They would not of known your settlement figure without calling them up - so they are probably speaking from their bottoms.

DrEskimo · 20 March 2019 at 1:52PM

It's very easy to obtain. Usually an automated service when you call.

Presumably the dealership are discussing trade in valuations relative to buying another car? Be very careful with doing this as it's very easy to offset and increases in part exchange with decreases in discount on the new car.

You really want to treat them separately. Research the best price you can get on your car (try Tootle, WBAC, look on AutoTrader, etc.) And likewise for the new car. If it's brand new then look at online brokers (Orange wheels, CarWow, Coast2Coasf, Broadspeed, etc) if it's used, then spend some time getting to know the used market and what's a good price for spec, age, mileage. I start with what the best discounted new price is, then go from there.

superbigal36 · 20 March 2019 at 2:26PM

Just ask for a trade in value that clears the finance.
Otherwise no deal guvnor.
You need to negotiate.
As above ensure the price of the new car is not increased.
I got an extra £600 by going from 1 salesman to another in the same garage 1 week apart.
Went from negative equity of about £450 to a extra deposit contribution of around £150.
After completing I challenged the difference. Got the customary the value of your car has risen this week (oh yeah)

System · 20 March 2019 at 5:39PM

LDJ67 wrote: »

I went to a car dealership a few days ago, he offered 5k for my car, so I'm thinking, well I only have 12/13 months of payments before I can hand it back so I'm in equity, but the dealership says I need to pay the full finance, as in the balloon payment also?

Of course you need to pay the balloon payment also, how else did you think the remainder of the original price of the car was going to be repaid? The reason you've only paid a few grand for the car over the 4 years and not the full screen price is because part of the full price was deferred by means of a balloon payment at the end of the finance term.

scandalpk · 21 March 2019 at 11:18AM

Thanks for sharing.

Advice about ending PCP early.

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