RobertoMercini
Active Member
Has anyone ever done this? I'm a year into a 4 year and have 'the itch'. It doesn't need scratching for a good while yet but just thinking about my options
Early PCP trade-in
- Thread starter RobertoMercini
- Start date
davidjpowell
MB Enthusiast
Ask MB Finance for a settlement figure.
After only a year you will likely end up well out of pocket though
After only a year you will likely end up well out of pocket though
- Joined
- Nov 6, 2007
- Messages
- 13,793
- Location
- North Oxfordshire
- Car
- His - Denim Blue A220 AMG Line Premium / Hers - Obsidian Black R172 SLK55
You will need to get a settlement figure from MB Finance. Assuming that you didn't put down a large deposit, it's likely that it will cost a couple of thousand to get out early as PCP's are designed to keep you in the deal until full term.
- Joined
- Mar 12, 2005
- Messages
- 7,612
- Location
- Cheshire, UK
- Car
- C270CDi Estate (late 2004 facelift model) - Bought 2005, Sold 2022.
I've heard of some dealers (although other makes, not Merc) actively calling people mid-way (usually 18mths on 3yr deals) and offering to put them into new cars for pretty well the same cost as their current deal.
OP
OP
RobertoMercini
Active Member
I can imagine there being a chance of all of the above being true. Whilst they are intended to keep you long term, if I'm 'upgrading' then in a fashion they're extending my business for another year, but my depreciation will likely be more than I've paid off, that said, the same models are going for very similar prices to what I paid so who knows.
HumberMart
Active Member
stumpy1 said:
+1 on steroids
Despite a whopping £12,500 discount off my October 2013 CLS, and a £2,000 deposit, I still owe about £34,000 after 15 months, and I'd be lucky to get £24,000 if I had to sell it now.
All that's despite only 4.0 % APR Agility.
No wonder they've reduced the list prices on 2015 CLS's !!!
paulshep69
Active Member
My wife ordered a BMW X1 and hated it for many reasons, she asked about returning it and walking away, they wanted a huge payment plus keep her deposit, it just wasn't an option.
Fortunately they had another X1 on demo (14 plate, the same) but a different model/colour/spec which she took on demo for a month before they did a swap + a bit of extra cash for, maybe this could be an option?
TrickyTrev
Active Member
- Joined
- Aug 12, 2013
- Messages
- 147
Read the terms of your agreement, it is required to tell you the options that you have for early terminating.
I think that once you have paid 50.1% of the total finance agreement (including the deposit) then you are free to had it back so long as no other issues arise - like damage etc... It does mean you have lost your deposit though.
The advice of others is to get a settlement Figure - which is the way forward. Once you know How far you are from the 50% you can decide whether to torch the cash (get out early) or spend the next few months until you hit the 50% saving money and trying other cars ahead of the release date, highlighting to dealers that you are waiting to exit a pcp. Which will be fun.....
I did the same as the other guy on the X1 but I gave it back immediately on paying 50.1% to bmw. Terrible car.
I think that once you have paid 50.1% of the total finance agreement (including the deposit) then you are free to had it back so long as no other issues arise - like damage etc... It does mean you have lost your deposit though.
The advice of others is to get a settlement Figure - which is the way forward. Once you know How far you are from the 50% you can decide whether to torch the cash (get out early) or spend the next few months until you hit the 50% saving money and trying other cars ahead of the release date, highlighting to dealers that you are waiting to exit a pcp. Which will be fun.....
I did the same as the other guy on the X1 but I gave it back immediately on paying 50.1% to bmw. Terrible car.
- Joined
- Mar 12, 2005
- Messages
- 7,612
- Location
- Cheshire, UK
- Car
- C270CDi Estate (late 2004 facelift model) - Bought 2005, Sold 2022.
Do people really expect to get their deposits back on a PCP?
TrickyTrev
Active Member
- Joined
- Aug 12, 2013
- Messages
- 147
Hi Rory,
Amazingly I got 100% back on my audi a2 back in the early 2000's - although I only put 2000 down.
I also got 6000 back on my Land Rover discovery in 2011 after 4 years and 65,000 miles in the car. I put 7000 down in 2007.
It's all about the model you choose and where it is on its lifecycle. Get a desirable model which is pretty new in its lifecycle and you have a chance....still a bit of a lottery though...
Amazingly I got 100% back on my audi a2 back in the early 2000's - although I only put 2000 down.
I also got 6000 back on my Land Rover discovery in 2011 after 4 years and 65,000 miles in the car. I put 7000 down in 2007.
It's all about the model you choose and where it is on its lifecycle. Get a desirable model which is pretty new in its lifecycle and you have a chance....still a bit of a lottery though...
MBScoob
Member
My friend and I had a discussion about this a while back, he told me that once he's half-way through the arrangement - year 2 of 4 - he can just hand the car back and walk away at that point, no additional charges subject to being within the mileage allowance agreed at the start. I told him that was NOT the case and it's actually when he's at a half way point on his payments. Taking into account his minimal deposit and fairly large predicted "balloon" payment if he decided to keep the car, this would push that date out further. He insisted he knew best because his cousin is a car salesman and helped him sort out the deal...I dropped it at that point because it's not my problem lol.
Two years into the deal - well actually about 28 months - he got the itch and wanted to change his car. However, after they ran the numbers it turned out he had a fairly hefty payment due to exit the contract at this point - he was not yet half way through the payments. His particular earliest "walk away" date without a penalty is actually 36 months - basically bang on the third year anniversary of him entering into the agreement.
If he'd placed down a larger deposit, it would have meant he'd have hit that "half paid for" stage slightly earlier. However, he chose the minimal deposit route of just £1,000, with larger monthly payments. He'd been advised that this was the cheapest way to do the deal, but he also incorrectly expected to be able to just "swap" to a new car at any point with minimal fuss & no charges. Obviously that is not the case.
No big deal as he'll just keep the car a little longer now and it is a very nice car.
Just wanted to post this real scenario to backup TrickyTrev's 50% paid data above.
Scoob.
Two years into the deal - well actually about 28 months - he got the itch and wanted to change his car. However, after they ran the numbers it turned out he had a fairly hefty payment due to exit the contract at this point - he was not yet half way through the payments. His particular earliest "walk away" date without a penalty is actually 36 months - basically bang on the third year anniversary of him entering into the agreement.
If he'd placed down a larger deposit, it would have meant he'd have hit that "half paid for" stage slightly earlier. However, he chose the minimal deposit route of just £1,000, with larger monthly payments. He'd been advised that this was the cheapest way to do the deal, but he also incorrectly expected to be able to just "swap" to a new car at any point with minimal fuss & no charges. Obviously that is not the case.
No big deal as he'll just keep the car a little longer now and it is a very nice car.
Just wanted to post this real scenario to backup TrickyTrev's 50% paid data above.
Scoob.
TrickyTrev
Active Member
- Joined
- Aug 12, 2013
- Messages
- 147
Fair point.
Must be said that the 50% is only the case usually where the interest rate and the balloon are fixed at the outset of the agreement. Also if you keep the payments low by having a massive balloon at the end, well in that case, it will be harder to get out flat on 50%.
Porsche in my experience only do floating rates of interest and variable balloons which always used to make swapping out a bit of a lottery - that said, other than cayenne's they tend to hold their values very well so there is probably a good opportunity to recover deposits there.
Must be said that the 50% is only the case usually where the interest rate and the balloon are fixed at the outset of the agreement. Also if you keep the payments low by having a massive balloon at the end, well in that case, it will be harder to get out flat on 50%.
Porsche in my experience only do floating rates of interest and variable balloons which always used to make swapping out a bit of a lottery - that said, other than cayenne's they tend to hold their values very well so there is probably a good opportunity to recover deposits there.
MBScoob
Member
Yeah, lots of other variables in the equation to take into account for sure. It's actually a very flexible way to buy, or indeed effectively rent a new car depending on your choice at the end of term / the "give it back" point. Where you can come unstuck a little is if, like my friend, to change your mind mid-term. With foresight of course a more appropriate deal could likely have been negotiated.
Depends on what you want. My friend is someone who's happy with large monthly payments, but doesn't like popping down large deposits. I was always the opposite. So much so I got into a situation where I managed to clear the finance off one of my purchases very quickly - no penalties for early out on that particular plan & I actually got cash back, exactly as I'd wanted. As I kept that particular car for a long time, my next purchase did not need financing at all, plus my deposit was 100% the value of my old car as it had no finance outstanding. Still, deals were a bit different back then.
So yeah, using these schemes well can certainly give you more buying power but - unless pre-negotiated as part of the deal - you can get stung if you want out early.
Scoob.
Depends on what you want. My friend is someone who's happy with large monthly payments, but doesn't like popping down large deposits. I was always the opposite. So much so I got into a situation where I managed to clear the finance off one of my purchases very quickly - no penalties for early out on that particular plan & I actually got cash back, exactly as I'd wanted. As I kept that particular car for a long time, my next purchase did not need financing at all, plus my deposit was 100% the value of my old car as it had no finance outstanding. Still, deals were a bit different back then.
So yeah, using these schemes well can certainly give you more buying power but - unless pre-negotiated as part of the deal - you can get stung if you want out early.
Scoob.
- Joined
- Mar 12, 2005
- Messages
- 7,612
- Location
- Cheshire, UK
- Car
- C270CDi Estate (late 2004 facelift model) - Bought 2005, Sold 2022.
To be fair there used to be a regular poster on here who was an economist and he thought the same, having been told it by an MB salesman.
That's another reason why the industry loves PCPs - Voluntary Termination (which is the half payments thing) becomes irrelevant.
- Joined
- Mar 12, 2005
- Messages
- 7,612
- Location
- Cheshire, UK
- Car
- C270CDi Estate (late 2004 facelift model) - Bought 2005, Sold 2022.
When you say you got it back, you didn't hand the car back and they gave you money back did they?
I've have met people with PCP who genuinely believe that at the end of the term they hand their car back and get the deposit back, as if the deposit is a security deposit on something you borrowed.
I think of it as a contribution to the deal. It's gone immediately. What happens at the end of the term is almost random.
Dryce
Hardcore MB Enthusiast
- Joined
- May 17, 2006
- Messages
- 11,533
- Car
- GLE
I've seen a few people do that and then forget when they figure how 'cheap' their car is monthly that they had to pony up the deposit which is now gone.
Too many people just won't do simple sums once they get hooked on a particular car at a supposed price.
OP
OP
RobertoMercini
Active Member
As with others here, I pretty much wrote off the deposit once it was down, I think I put about 3 down plus a dealer contribution. Never once have I thought I'd end up in any form of 'credit' at the end - it's not how a business works!
HumberMart
Active Member
One interesting point that I only learned recently myself is that if you VT, they can't bill you for excess mileage.
Well let me expand a little. They will probably bill you, but you don't legal have to pay it.
My daughter is 21000 over mileage on her Clio, so is putting this theory to the test as I type!
This means that VT could become very worthwhile if you do go over miles, despite how close you are to the full term.
Well let me expand a little. They will probably bill you, but you don't legal have to pay it.
My daughter is 21000 over mileage on her Clio, so is putting this theory to the test as I type!
This means that VT could become very worthwhile if you do go over miles, despite how close you are to the full term.
- Joined
- Mar 12, 2005
- Messages
- 7,612
- Location
- Cheshire, UK
- Car
- C270CDi Estate (late 2004 facelift model) - Bought 2005, Sold 2022.
It was (maybe still is) something used by high-mileage drivers - get a car on HP over 5 yrs, bang a load of miles on it in 2.5 yrs, then VT it.
They can't pursue for fair wear and tear either - a definition likely to be a lot more generous than, for example Mercedes, return standards.
