Cars on pcp and pch

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I'm halfway through my agreement on pcp for my approved audi a3. But because of its age/miles its done I've read its due a timing belt/water pump, which I'd rather avoid paying as I've only had the car 18 months and have driven 13k. Anyway, I never realised contract hire was a thing, truthfully if I had known I would have chosen that over a pcp as my intention was to always change cars anyway, so I have a settlement figure which is around 500 short of what they'd buy the car back for, that's fine.

Now, looking at some of the PCH deals I can get a VW Troc r line for £25 more a month. Perfect.

But should I apply for the car now before having the sale confirmed by audi, or sell the car back and fund the difference, wlak away, then apply?

My small fear is possibly getting rejected for PCH as technically the Audi is an ongoing finance agreement (never missed payments or even took advantage of the payment holidays)
 
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There isn't a massive amount of difference between PCP and PCH really, sure there are differences but they are both fundamentally the same thing. You still have to repair it if breaks 3.5 years into a 4 year contract hire.
 
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Settling early on your existing car shouldn't be an issue. I wouldn't risk having two cars on the drive though.

Edit: Also, take this opportunity to work out your total cost of ownership. Monthly payments are just one small part of the total picture. I only say this as the timing belt/water pump seems to have caught you off guard yet you've only had the car 18 months/13k - shouldn't have been a surprise really. PCP on a used car is astronomically expensive and if you can capitalise on the whole COVID situation and get the bus (or taxis, frankly) for a little while to build up a big deposit, your future self will thank you.
 
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Settling early on your existing car shouldn't be an issue. I wouldn't risk having two cars on the drive though.

Edit: Also, take this opportunity to work out your total cost of ownership. Monthly payments are just one small part of the total picture. I only say this as the timing belt/water pump seems to have caught you off guard yet you've only had the car 18 months/13k - shouldn't have been a surprise really. PCP on a used car is astronomically expensive and if you can capitalise on the whole COVID situation and get the bus (or taxis, frankly) for a little while to build up a big deposit, your future self will thank you.
I appriciate the reply, the timing belt has come as a surprise as I've never had to do one, typically this audi is the most expensive car I've had and it was clearly an oversight. But monthly I'll be paying the same or td more for a brand new car, and the money used towards the belt and pump would pay most of the upfront anyway.

Alternatively I could hand the current car to the lease company as I'm legally allowed since its past the halfway point. But I'm not sure if that goes down as a default or settled.
 
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That makes sense, just do the TCO so you know exactly how much cold hard cash you are putting forward. My TCO on my past PCPs has included things like brakes, tyres, and damage on two of the last three, so it all resonates.

I had a colleague who did a VTA with no impunity but he had a lot of mileage behind him (no pun intended) so financing another car wasn't a second thought. Your mileage (no pun intended) may vary - I'd always try and avoid it.
 
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That makes sense, just do the TCO so you know exactly how much cold hard cash you are putting forward. My TCO on my past PCPs has included things like brakes, tyres, and damage on two of the last three, so it all resonates.

I had a colleague who did a VTA with no impunity but he had a lot of mileage behind him (no pun intended) so financing another car wasn't a second thought. Your mileage (no pun intended) may vary - I'd always try and avoid it.
I feel slightly embarrassed but what does VTA and TCO mean.

In terms of miles I always opt over anyway. For example usually do 12k a year, when my insurance was due for renewal I could of saved some money reducing it to 3k (I've done 500 miles since July) but I'd rather over estimate on that side of things.
 
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Alternatively I could hand the current car to the lease company as I'm legally allowed since its past the halfway point

Remember, to voluntarily terminate it is the financial halfway point. i.e., that you have paid back 50% of the total outstanding amount, including the final lump sum and interest, not just halfway through the term of the contract.

Generally, on a PCP, the tipping point will be very close to the final payment. Voluntary termination is not a default on the loan and it does not affect your credit rating, no matter what a dealer may say.

Good info is here: https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/
 
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I feel slightly embarrassed but what does VTA and TCO mean.

In terms of miles I always opt over anyway. For example usually do 12k a year, when my insurance was due for renewal I could of saved some money reducing it to 3k (I've done 500 miles since July) but I'd rather over estimate on that side of things.
TCO - Total Cost of Ownership. I.e. don't just look at the monthly repayments. A cheaper monthly means you are paying elsewhere (balloon [or negative equity if you try and change your car early again]). Look at how much you could finance face value for, especially second hand (my AMG was £10k to have on dealer finance! Insane).
VTA - Is the Voluntary Termination Agreement you mentioned which gailjon has explained above.
 
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It's a bit strange that the car would have depreciated so much in those 18 months that it's in £500 negative equity. A new car yes, but a used one at this stage of it's life should hardly be depreciating at all. Get some more valuations. I've used We buy any car etc before.
 
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I wouldn't worry about being rejected on the basis of already having a car on finance. They should ask a question such as "will this arrangement be replacing an existing car finance arrangement".

Some really good deals to be had on PCH so make sure you look around.
 
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Well I've decided to pass for now, I don't see myself doing more then 500 miles in the next 6 months so I can bypass the recommendation in the service book for a new belt. It's low mileage fgs.

But my settlement figure is 12k. Best offer for the car I got cash was 10.5k. Factor the 1k upfront with a lease, it makes no sense to shell out 2.5k for a car that has 5.2k left until the agreement ends in 18months.

First smart decision of 2021*

* until a reeeeeally nice car comes up, like a 200bho Troc or GTD
 
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FWIW belt changes are typically age related not mileage related, rubber degrades regardless of use. Also check the T&Cs of your agreement as the GFV may not be so guaranteed if you're neglected the service schedule.
 
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I don't see myself doing more then 500 miles in the next 6 months so I can bypass the recommendation in the service book for a new belt. It's low mileage fgs.

It isn't your car though so is this really your decision to make? If you want the freedom to decide not to bother doing servicing then buy a car outright then its yours to neglect as you please.
 
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Well I've decided to pass for now, I don't see myself doing more then 500 miles in the next 6 months so I can bypass the recommendation in the service book for a new belt. It's low mileage fgs.

But my settlement figure is 12k. Best offer for the car I got cash was 10.5k. Factor the 1k upfront with a lease, it makes no sense to shell out 2.5k for a car that has 5.2k left until the agreement ends in 18months.

First smart decision of 2021*

* until a reeeeeally nice car comes up, like a 200bho Troc or GTD

If your PCP is with Audi or VW Financial Services then (unless it’s different for used cars) you have to service the car according to the service schedule (it’s not a recommendation, it’s a requirement) and you have to get it done at an Audi dealer. You can’t even VT the car if you haven’t serviced it to schedule because the definition of the voluntary termination conditions is that you have to have looked after the car and not servicing it clearly isn’t looking after it. Most VAG dealers are also pretty cute about checking the electronic service schedule. Every time your car is serviced they update the A4 pages in the back of your service book. And they’ll check that at trade-in time.

And obviously, if the timing belt fails then you’ll need at least an engine rebuild, usually a new short engine.
 
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It was an Audi used car on PCP, which I have had confirmed by their service and sales team this morning, it is a recommendation at the moment. In terms of the condition of the car and maintenance up until this point, it's pristine, so I don't want people having some sloppy impression of me. Alternatively after speaking with the sales manager at a local Audi branch, we are looking into a trade in, with a new vehicle which would include branch deposit contribution etc, so the figures, in theory could be more attractive. We shall see.

But PCH is totally out of the question now.
 
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Alternatively after speaking with the sales manager at a local Audi branch, we are looking into a trade in, with a new vehicle which would include branch deposit contribution etc, so the figures, in theory could be more attractive.

They won't be though.
 
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It was an Audi used car on PCP, which I have had confirmed by their service and sales team this morning, it is a recommendation at the moment. In terms of the condition of the car and maintenance up until this point, it's pristine, so I don't want people having some sloppy impression of me. Alternatively after speaking with the sales manager at a local Audi branch, we are looking into a trade in, with a new vehicle which would include branch deposit contribution etc, so the figures, in theory could be more attractive. We shall see.

But PCH is totally out of the question now.

Whilst it's difficult to pass any sort of solid comment on a deal without seeing the numbers, I would suggest it's unlikely / rare that rolling a half finished used PCP into a new car PCP is going to result in you being better off overall - be very clear on whatever you sign up to and make sure you understand what money you have put into this car so far, what money you'd be putting into the new deal, for how long etc.

A straight up new PCP can be better than used, due to dealer contributions and favourable rates available but i'm not sure that necessarily still applies if you're rolling an old used car PCP into a new one.
 
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It was an Audi used car on PCP, which I have had confirmed by their service and sales team this morning, it is a recommendation at the moment.

I’ve had a LOT of Audi’s and VWs and Skoda’s before that and I’ve never seen a recommendation on a service schedule. So if it’s not on the service schedule then the dealer is having you on.

But PCH is totally out of the question now.

I think that’s probably a good thing. You have zero flexibility other than adjusting the mileage up sometimes. You can’t trade the car in or sell it if you need to. The best deal I ever saw on PCH termination was that VW/Audi finance would let you terminate on half the remaining payments if you hit the mileage early. Generous of them!

I can understand it with companies who get a better tax situation with contract hire and basically just go bust and give the car(s) back in the worst case scenario but as a personal customer you’re liable for all the payments whether you give the car back or not.
 
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We did the VTA thing on a Polo the missus bought, it was a terrible finance deal, she owed a load of money on at halfway point thousands more than it was worth or what we could sell it for we just handed it back, it was a very painless experience, we asked the dealer what happens to the car after as she liked it, they told us the auctions they put it through, we were able to pick it up for thousands less than owed :D SO if you've got big bills coming and you are not into the car, get shot of it, as mentioned if it is not on the service schedule your are not obliged to do anymore to the car, of course you could be liable if it does go wrong, so always a risk.

Nice option to have in these covid times, I wish my cars had that option now, I'd hand them all back, unfortunately I own them, so they just sit on the drive doing nothing for the past year bar costing me dough...boo. :D Pointless driveway ornaments when you are not allowed to go anywhere or do any thing.
 
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