PCP change in circumstances

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jcderpton
jcderpton Posts: 2 Newbie
in Loans
Hi,

I've currently around half way through a 3 year PCP. When I signed up my average mileage was around 6000 / year and while it was possible it could go up the dealer insisted I keep it at 6000.

Due to a change in work circumstances I'm now having to drive to work, which is around 12000 miles / year for commuting alone, and the car isn't really built for motorway driving (1250cc Ford Fiesta petrol).

I'd like to trade it in but I'm not sure if now's the right time. Curious to know what advice you could give me?

Thanks
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  • bris
    bris Posts: 10,548 Forumite
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    If you're half way through you could look at the VT route which would get you out of the deal without negative equity on the car which it will undoubtedly have.


    You need to have paid at least 50% of the total finance agreement, so do the maths and see where you are. It is a way out and leaves you free to choose a new car.


    Another route is to approach a dealer to trade it in and start again but this will probably be sore on the wallet due to the value of the car compared to what you owe on it.
  • The_Real_Cheddar_Bob
    The_Real_Cheddar_Bob Posts: 542 Forumite
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    bris wrote: »
    If you're half way through you could look at the VT route which would get you out of the deal without negative equity on the car which it will undoubtedly have.


    You need to have paid at least 50% of the total finance agreement, so do the maths and see where you are. It is a way out and leaves you free to choose a new car.


    Another route is to approach a dealer to trade it in and start again but this will probably be sore on the wallet due to the value of the car compared to what you owe on it.


    Usually a PCP deal means the half way point for VT is very close to the end of the original term. So may not be possible until month 30 or so.
  • jcderpton
    jcderpton Posts: 2 Newbie
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    My repayments are quite small to I'm not going to be able to VT until month 34.

    But from you're saying it's best for me to wait it out then VT / trade in as close as possible to the agreement end date? That way I'd avoid the excess mileage charge.
  • The_Real_Cheddar_Bob
    The_Real_Cheddar_Bob Posts: 542 Forumite
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    I just got rid of our car. perhaps you can find out if thats an option for you
  • anto164
    anto164 Posts: 174 Forumite
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    Perhaps phone the dealership, explain and see whether you can swap or make a deal?

    Or, get a loan, buy the car with it, then sell it and buy a new one outright with what is left?
  • phillw
    phillw Posts: 5,594 Forumite
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    anto164 wrote: »
    Perhaps phone the dealership, explain and see whether you can swap or make a deal?

    New plate comes out in September, there may be quite considerable deals that can be done on a new car.

    However I loath PCP with a passion.
  • MEM62
    MEM62 Posts: 4,752 Forumite
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    phillw wrote: »
    I loath PCP with a passion.


    I agree. In the short-term it might get people into cars that they otherwise could not afford but in the long-term there are too many downsides. And you never end up owning anything!
  • antrobus
    antrobus Posts: 17,386 Forumite
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    MEM62 wrote: »
    I agree. In the short-term it might get people into cars that they otherwise could not afford but in the long-term there are too many downsides. And you never end up owning anything!

    No, you do own the car. PCP stands for Personal Contract Purchase. The clue is in the name.

    Of course, PCP deals are structured so that most people choose to stop owning the car at the end of term, and start owning another one. But that's something else all together.
  • fromtheshires
    fromtheshires Posts: 310 Forumite
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    MEM62 wrote: »
    I agree. In the short-term it might get people into cars that they otherwise could not afford but in the long-term there are too many downsides. And you never end up owning anything!
    PCP is very good if you know you can handle it. My example below;

    0% for 4 years at £100 a month then pay the remainder off / hand the keys back.

    I already had the cash in hand to purchase the vehicle outright but I now have 4 years of money earning interest in my accounts. I am keeping the vehicle at the end which may help but it all depends on circumstances. I wouldnt normally go for PCP but this was better than a pay equal installments for x amount of years deal as I have the cash in my accounts working for me for longer.
  • cjmillsnun
    cjmillsnun Posts: 615 Forumite
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    antrobus wrote: »
    No, you do own the car. PCP stands for Personal Contract Purchase. The clue is in the name.

    Of course, PCP deals are structured so that most people choose to stop owning the car at the end of term, and start owning another one. But that's something else all together.

    You don't own the car until you make the balloon payment at the end.
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