PCP and Equity.

Clearcut · 9 Dec 2018 at 09:55

Morning, I took a car on PCP 4 years ago and I hand it back in January. My plan is to exchange it. The set mileage was 8,000 per year (32,000 overall) but I have only put 10,000 on it in total. Is it likely that the car will be worth more than the balloon payment, giving me equity to put towards the next. I can Google but I prefer the answer to be black and white.

Thanks.

[TW]Fox · 9 Dec 2018 at 10:21

What is the car and what is your balloon payment?

Clearcut · 9 Dec 2018 at 10:26

2011 1.6 mK3 Focus (Petrol). £3,200
46,000 miles

Thanks

[TW]Fox · 9 Dec 2018 at 10:30

Yes, there is likely to be equity in that. Assuming it's a Zetec 5 door it has a trade value of just over 4k.

Clearcut · 9 Dec 2018 at 10:31

Yes it is. Thanks Fox.

Clearcut · 31 Dec 2018 at 10:48

You will have to forgive my ignorance with PCP. I'm now in the position of, in order to avoid the balloon payment been taken by direct debit (which I don't have) at the end of January, I have a deadline of today to state if I am to hand the car back, or find another car by Jan 28th - which may be difficult (not sure how smoothly that works).

What would you do? Would it be best to call telling them I am handing it back and still look for something, or risk it?

I only have an automatic license so my choices are more limited.

Thanks.

rodenal · 31 Dec 2018 at 10:54

Take out a personal loan for the balloon payment or take out / transfer from a money transfer credit card then decide what to do with the car in your own time

If you have c£1k more value in the car (even as a px) it would be rash to jump into something else quickly given its really quite a low balloon value

HangTime · 31 Dec 2018 at 13:07

Yep I would buy the car assuming you can get the £3.2k from somewhere and don't have any problems with it. You'd likely need to spend around ~£1500 extra to find an equivalent (low mileage auto Focus) car for sale.

Clearcut · 31 Dec 2018 at 14:35

Thanks for the answers, unfortunately, I can't raise the funds and probably couldn't sell it in time. May have to re-finance it.

Diagro · 31 Dec 2018 at 16:09

You can't get a bank loan?

Blackhawk47 · 31 Dec 2018 at 21:09

How much is the balloon??

Scania · 31 Dec 2018 at 21:41

Pretty much the reverse - and then some - of a friend of mine, took out a pcp on a 320d a few years back, budgeted for 32k miles over the term and it’s due to go back next February, due to a few somewhat major circumstance changes the car is currently nearing 120k miles.... :eek:

acemastr · 31 Dec 2018 at 21:45

Took out PCP on a 2011 car, 4 years ago?

I thought it was only new cars?

chaparral · 31 Dec 2018 at 21:52

acemastr said:
Took out PCP on a 2011 car, 4 years ago?

I thought it was only new cars?

That what I was thinking...

Or at lest on cars only 1 year old or less, Didn't think you could do PCP on a car that was 3 years old

Blackhawk47 · 31 Dec 2018 at 21:54

acemastr said:
Took out PCP on a 2011 car, 4 years ago?

I thought it was only new cars?

Its not only new cars. If 4 years ago means 2014 it is quite possible that a three year old focus on the forecourt of the dealership, and the OP got PCP on it.

Scania · 31 Dec 2018 at 21:56

Blackhawk47 said:
Its not only new cars. If 4 years ago means 2014 it is quite possible that a three year old focus on the forecourt of the dealership, and the OP got PCP on it.

Indeed , my mates ludicrously over miles 320d is an early 2014.

rodenal · 31 Dec 2018 at 22:07

Even your own bank will do it now, you can PCP through Halifax - I'm sure there is an age limit but I don't believe it needs to be new/nearly new

Basher · 1 Jan 2019 at 06:53

Scania said:
Indeed , my mates ludicrously over miles 320d is an early 2014.

Luckily with PCP it doesn’t matter too much. If you go wildly over and end up in negative equity you can just hand it back - no penalties to pay (assuming you’be made 50%+ of the payments)

paradigm · 1 Jan 2019 at 07:27

Basher said:
Luckily with PCP it doesn’t matter too much. If you go wildly over and end up in negative equity you can just hand it back - no penalties to pay (assuming you’be made 50%+ of the payments)

Are you sure the excess mileage charges aren’t still applicable? Doesn’t seem right?

Edit: seems that you don’t need to pay excess mileage, which is good, but it is worth pointing out that you need to have paid 50% of the total, not 50% of the payments.

Scania · 1 Jan 2019 at 07:52

Basher said:
Luckily with PCP it doesn’t matter too much. If you go wildly over and end up in negative equity you can just hand it back - no penalties to pay (assuming you’be made 50%+ of the payments)

I remember him banging on about not being bothered due to this which doesn’t seem right to me....

paradigm said:
Are you sure the excess mileage charges aren’t still applicable? Doesn’t seem right?

Edit: seems that you don’t need to pay excess mileage, which is good, but it is worth pointing out that you need to have paid 50% of the total, not 50% of the payments.

I’ll have to ask him about this but I’d have thought after 4years he should be past half way?