PCP Falling Short

kentmerc

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So my 3 year PCP offer finishes at the end of this month and Mercedes have advised that the GFV set when the PCP deal started is higher than the car is worth.

So all I can do now is hand the car back and walk away, through no choice of my own.

This means that I have in effect been leasing the car for the past 3 years but on PCP terms, ie paying a higher up from deposit and higher monthly costs than had I just leased the car in the first place.

Does this situation happen commonly and do I have any recourse to take this up with Mercedes based on the fact that the PCP numbers that they worked out for me do not stack up ?
 

Steveml63

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Hi,
Are you sure - the G in GFV is Guaranteed!
That means that the GFV is the minimum guaranteed future value - it therefore can't be worth less than this.
They need to bear any shortfall - not you.
Cheers
Steve
 

Doodle

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So all I can do now is hand the car back and walk away, through no choice of my own.

Not true. You can pay the GFV and keep the car. The only thing that has changed is that there's no equity left to allow you to sell/PX the car at a profit.
 
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kentmerc

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Sorry just to be clear - the GFV has remained the same and has not changed.

However the value of the car on today's rates is lower than the GFV and so I would be paying more to buy the car outright than it is actually worth.
 

Doodle

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That is the risk of a PCP with optimistic future values.

Comeback? Very little. How do the figures not "stack up"? If you weren't interested in keeping the car, then there was no point taking the more expensive PCP deal. Part of what you've paid for is that option to buy at the end.
 
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Steveml63

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Hi,
That hopefully means that your payments were lower than they should have been - as you were funding the difference between the cost price and a higher future value than was realistic.
However - it is certainly a shame that you don't have any equity towards a future purchase or lease.
Cheers
Steve
 
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kentmerc

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Thanks Steve - I didn't see it from the point of view that because my monthly payments are lower then it puts me in this position. I did get a good deal (I think) and so am probably paying less, but could have got a cheaper deal on lease.

As Doodle says, is the nature of PCP I guess. However, my next car is on a lease deal...
 

Markjames

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So my 3 year PCP offer finishes at the end of this month and Mercedes have advised that the GFV set when the PCP deal started is higher than the car is worth.

So all I can do now is hand the car back and walk away, through no choice of my own.

This means that I have in effect been leasing the car for the past 3 years but on PCP terms, ie paying a higher up from deposit and higher monthly costs than had I just leased the car in the first place.

Does this situation happen commonly and do I have any recourse to take this up with Mercedes based on the fact that the PCP numbers that they worked out for me do not stack up ?

Have you tried "we buy any car" to see what sort of price they will offer you for car? I'm pretty sure it will be similar to what Mercedes are saying but it's got to be worth a look before you just hand it back.
 
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You could always ask if they will reduce the GFV for you.
 

Red C220

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This is normal. We were going to hand back our E and buy something else 24 months into the 36 month agreement.

At no point do we ever reach the 50% magic figure to hand it back, in fact we don't even manage to hit 50% full term on the contract so to hand it back early we'd have to pay 95% of the remaining payments.

We'd be daft doing that, so we'll keep it till full term and order our next car in February next year instead of now.

At 36 months old the GFV on our E will be roughly £3k-£4k more than it's worth. We got a good deal at the time, we'll just hand it back when the time arrives.
 

Rory

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This means that I have in effect been leasing the car for the past 3 years but on PCP terms, ie paying a higher up from deposit and higher monthly costs than had I just leased the car in the first place.

Yes - if you change the car every 3yrs then effectively lease and PCP do the same thing, but PCP usually costs more.

The downside of leasing is you've got to assume it's not flexible if your circumstances change. You may be able to get a deal but generally leasing companies want all the outstanding payments if you bale early.

Having said that, getting out of a PCP can be painful too.

I do recall BMW being flexible on final values when the market crashed in 2008 or so, but not seen comments that any other manufacturer has done the the same.


Making a complaint would be a bit odd - Mercedes could complain that you haven't been paying enough!
 
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Little Lofty

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The only way you might get any money out of the car is if you sell it privately, you'd have to do some homework on values though.
If you keep cars for the full PCP term then yes your probably better to lease next time, I never keep mine long enough to find out if the GFV is accurate. If you'd payed cash for the car it would now be worth less than you expected so at least MB will make up the shortfall not you. I can't really see how you would get anywhere complaining to MB as they are taking the hit, you are in effect in negative equity but don't have to pay anything to get out of the car, if you'd sold it last year you would have had to make up the shortfall yourself, now you can just leave it on the dealers forecourt and walk away.
 

mgooda

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I was in the same position only three weeks ago. I also had the issue of an excess mileage charge of around £ 900 + VAT.

Auto-tradered my car on the Sunday afternoon for £750 above the GFV-guy drove 280 miles on the Tuesday, settled the finance at 9.30 am. I had confirmation by 11.30 and handed him the keys.

Made £750 on the actual sale and saved the £900 + on the mileage.

Whilst the GFV, more often than not will sit above what a dealer will px for it should sit well below what you could achieve privately. You've just got the hassle of getting the buyer to settle the finance directly , which wasn't half as painful as I was expecting.
 

mike_es

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Yes - if you change the car every 3yrs then effectively lease and PCP do the same thing, but PCP usually costs more.

The downside of leasing is you've got to assume it's not flexible if your circumstances change. You may be able to get a deal but generally leasing companies want all the outstanding payments if you bale early.

Having said that, getting out of a PCP can be painful too.

I do recall BMW being flexible on final values when the market crashed in 2008 or so, but not seen comments that any other manufacturer has done the the same.


Making a complaint would be a bit odd - Mercedes could complain that you haven't been paying enough!

Incorrect. If you wish to exit a lease deal then you are required to pay 50% of outstanding payments.
 

mike_es

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I was in the same position only three weeks ago. I also had the issue of an excess mileage charge of around £ 900 + VAT.

Auto-tradered my car on the Sunday afternoon for £750 above the GFV-guy drove 280 miles on the Tuesday, settled the finance at 9.30 am. I had confirmation by 11.30 and handed him the keys.

Made £750 on the actual sale and saved the £900 + on the mileage.

Whilst the GFV, more often than not will sit above what a dealer will px for it should sit well below what you could achieve privately. You've just got the hassle of getting the buyer to settle the finance directly , which wasn't half as painful as I was expecting.

If you had contracted the correct mileage band at the start of the deal, you would have been in a better position at the end.
The price of the car stays the same, it's just the Final Payment which reduces, which in turn puts your monthly payment up, BUT, the excess mileage charge far, far outweighs the extra on your monthly payments.
 
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Am I reading this thread right? The OP is unhappy that his car is worth less than the GFV?
 

Rory

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Incorrect. If you wish to exit a lease deal then you are required to pay 50% of outstanding payments.

Is this general, or Mercedes specific?

You couldn't link to contract or post an extract that details this, could you?
 

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