Early PCP trade-in

[flowrider]

Of course you all know that voluntary termination will hit your credit record to the point where you may not get another finance deal for quite a while.

 

[def90cars]

Do people really expect to get their deposits back on a PCP?

£2000 deposit plus 3 yrs of payments. GMFV was £12500 - Sold it for £25000.

Effectively got my deposit plus £10000+ back after 5 years.

So not unheard of.

 

[mattmeyler19]

I've put in 12k deposit on my c63 and done a 2 year pcp I would hope ill get a 1/3rd of that back at the end but lucky if it's anymore.

 

[paulshep69]

£2000 deposit plus 3 yrs of payments. GMFV was £12500 - Sold it for £25000.

Effectively got my deposit plus £10000+ back after 5 years.

So not unheard of.

No, not really.

It all depends what your payments were over the period and what you bought your car for in the first place.

It looks to me like they were over cautious with the GFV they gave you, so effectively you paid your own deposit and the £10,000+ back over the term, making you think you were £12,500 in pocket.

Unless it was one of those rare cars that start appreciating between the 3 to 5 year point that is.

Without prying too much into figures, what was it?

 

[TrickyTrev]

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.

What I did was 1 month before the car was handed back, I traded it in. At the point of agreeing the valuation for the trade in, I owned up that the finance needed to be settled. So, in effect, I got the difference from the dealer as my deposit. It helps if you are changing Marques as they don't have visibility on the finance agreement.

Happy days.

 

[def90cars]

No, not really.

It all depends what your payments were over the period and what you bought your car for in the first place.

It looks to me like they were over cautious with the GFV they gave you, so effectively you paid your own deposit and the £10,000+ back over the term, making you think you were £12,500 in pocket.

Unless it was one of those rare cars that start appreciating between the 3 to 5 year point that is.

Without prying too much into figures, what was it?

Haha you spotted my lack of details

£33,000 car.
£12,500 GMFV after three years was very poor, I would hope for £15,000+.
It was a Defender.
Rare model. Only lost £8,000 in 5 years. Genuinely sold for £25000.

As you correctly state, it does depend on your payments etc.

Just lucky

 

[Rory]

It helps if you are changing Marques as they don't have visibility on the finance agreement.

It shouldn't make an difference although people suspect it does. They generally ask though and/or do a quick online HPI check which will show it's on finance.

You could have been helped by a boosted trade-in value for changing marques - some do this from time to time as it helps market segment share figures, which are the Holy Grail to marketing people.

 

[RobertoMercini]

Of course you all know that voluntary termination will hit your credit record to the point where you may not get another finance deal for quite a while.

pardon my ignorance but I'm intrigued as to how this could be the case. Credit file would show as account opened, account settled. Voluntary termination is a term the finance company might use, but not a credit reference agency that provides the info

 

[paulshep69]

Haha you spotted my lack of details

£33,000 car.
£12,500 GMFV after three years was very poor, I would hope for £15,000+.
It was a Defender.
Rare model. Only lost £8,000 in 5 years. Genuinely sold for £25000.

As you correctly state, it does depend on your payments etc.

Just lucky

That's creative accounting on Land Rover’s (or their finance company’s) part.

You paid somewhere near £600 per month for the pleasure of the car for 3 years, instead of around the £250 mark (guessing at interest rates, assuming it wasn't 0%) that it should have been if the GFV was right, so effectively you paid an extra £350 per month that they were making interest on, plus the interest you paid on the payments too. Plus another new car sold for their sales numbers. They'd be more than happy with that.

Then you sell the car at twice what your balloon payment was, reaping back your £12500 overpayment and you're also delighted - nice one.

 

[RobertoMercini]

pardon my ignorance but I'm intrigued as to how this could be the case. Credit file would show as account opened, account settled. Voluntary termination is a term the finance company might use, but not a credit reference agency that provides the info

by the way, I state this having settled every single finance deal I've ever had, early, and always ended up with a lower apr than before

 

[paulshep69]

Of course you all know that voluntary termination will hit your credit record to the point where you may not get another finance deal for quite a while.

I think this may only happen if you just drop the keys off at the dealer and say you don't want the car any more, without settling the outstanding ballance.

pardon my ignorance but I'm intrigued as to how this could be the case. Credit file would show as account opened, account settled. Voluntary termination is a term the finance company might use, but not a credit reference agency that provides the info

If you go through the right steps for handing the car back, and pay off any outstanding ballances that are due, it surely can't harm your credit file.

 

[def90cars]

That's creative accounting on Land Rover’s (or their finance company’s) part.

You paid somewhere near £600 per month for the pleasure of the car for 3 years, instead of around the £250 mark (guessing at interest rates, assuming it wasn't 0%) that it should have been if the GFV was right, so effectively you paid an extra £350 per month that they were making interest on, plus the interest you paid on the payments too. Plus another new car sold for their sales numbers. They'd be more than happy with that.

Then you sell the car at twice what your balloon payment was, reaping back your £12500 overpayment and you're also delighted - nice one.

GFMV was based on the VIN, which showed as a standard 2 door pick-up.
Even they were embarrassed by this but nothing they could do at the time.
Your guesses are close.

I still believe 75% value after 5 years is hard to beat.

 

[mgooda]

VT only really works on HP where in theory 50% of payments is pretty much 50% of the agreement length. On a PCP because of the balloon at the end, 50% of the payments is more like 75% of the agreement length.

I guarantee that managed correctly VT will have no adverse affect on a credit rating at all - it's part of the agreement terms and conditions so as long as you meet them the finance provider cannot penalise you for it. I've done it.

My experience of a PCP is that you'll rarely end up being in credit on the agreement unless the monthly payments have been deliberately exaggerated. That's not what they're for.

A dealer however, working to achieve a new sale should do their level best to get you out of an existing agreement early, on the best terms(p/ex) and onto a new one at the best terms. I've always worked hard to get the salesman working for me - have had three C Classes with the last two deals, including p/ex, being done on the telephone. Always used the same dealer, same salesman.

 

[davidjpowell]

I once many years ago VT'd a car after getting a company car and finding my relatively high mileage Pug 406 was in negative equity.

It did come up when I later applied for a mortgage and was shown as agreement terminated for 'other' reasons. I was asked to explain it and after that there was no issue.