PCP Help

akadessie · 16 April 2018 at 5:09PM

Hi, 3 years ago we bought a new Nissan Qashqai on a PCP deal. It's a great car, which we put £8K down on, with monthly payments of £149.

The deal is now finishing and we went to the Garage last week; we don't have any more deposit to put down to speak of, and the rather disinterested salesman advised that to either re-finance or replace with a new one our monthly payments are likely to go up to £350. This is not affordable for us.

Having done a bit of scouting around I am coming to the conclusion that we should hand it back and get a deal with someone else (Vanarama offer a 5 year deal I think, with monthly payments around £200, with £1500 deposit, which I think we can do). Obviously we then lose what we've put into the car so far which is a shame, but is there any other reason why we shouldn't go down that route? What other options do we have? I will talk to the bank tomorrow about a loan to pay the £11350 still owing off, but we plan to remortgage next year to fund a big holiday (50th birthday / final family blow up with late teenage children) which I don't want to jeopardise.

Cornucopia · 16 April 2018 at 5:19PM

How much is the car worth compared to the PCP's GFMV? That figure will tell you whether it is worthwhile trying to find a suitable trade-in deal or not. Otherwise, as you say, give the car back.

Although you say: "we then lose what we've put into the car so far which is a shame", this isn't really how PCPs are intended to work. i.e. the idea is to pay for the car's depreciation over the period of the deal, leaving little or nothing as equity in the vehicle at the end of the term. Unfortunately, your original £149pm was never realistic to achieve this without the £8k deposit. (Although the corresponding equivalent monthly payment of £371 over 36 months looks excessive).

If you are considering handing it back, the only other thing to be aware of are possible penalty charges for excess mileage or poor condition.#

Edit to add: If you want another Qashqai, then I'd suggest looking at a Lease (where prices start from c. £200pm, with £1200 deposit, depending on model and mileage).

bris · 17 April 2018 at 12:07AM

Putting a large deposit down on a PCP is never a good idea, it's instantly lost. Depreciation sees to that, you can get a similar car for about £200-250 a month with about a grand up front on a 3 year deal.

that's just over 8k, that makes your last deal a very bad deal.

If it's only 3 years old whats it worth? It should be worth a bit more than the settlement figure, the difference could be your deposit on the next one.

System · 17 April 2018 at 7:00AM

bris wrote: »

Putting a large deposit down on a PCP is never a good idea, it's instantly lost. Depreciation sees to that, you can get a similar car for about £200-250 a month with about a grand up front on a 3 year deal.

Makes no difference. You still lose the same amount of money with a small deposit, you just lose it via larger monthly payments instead.

akadessie · 19 April 2018 at 3:39PM

Thanks all, I think I'm going down the refinance route - whichever route will be monthly payments and we need a car, so may as well have something to show at the end. I'll get a loan with the bank to pay off over 5 years, and I think at the end we still have a part-exchangeable car, disaster permitting.

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