Equity at end of PCP
Discussion
I've never had a PCP deal to the end before but mine is due to expire next summer.
What sort of equity is usually left at the end of the deal assuming you've not exceeded the mileage limits? From what I've read the idea is that there's "enough" there for a deposit on the next one.
I'm not banking on this and should have ~£4k deposit to use plus anything they find in the car, but am curious as to what the usual balance is.
For reference it's a Mercedes SLK250CDI with a 20k/yr mileage limit over 24 months and a GMFV of about £23k, bought new last year. There are some small scuffs on two wheels and a paintchip on the front spoiler about the size of a postage stamp. I don't plan on buying another Mercedes, but wouldn't rule it out entirely if it's the best way to get a good deal.
What sort of equity is usually left at the end of the deal assuming you've not exceeded the mileage limits? From what I've read the idea is that there's "enough" there for a deposit on the next one.
I'm not banking on this and should have ~£4k deposit to use plus anything they find in the car, but am curious as to what the usual balance is.
For reference it's a Mercedes SLK250CDI with a 20k/yr mileage limit over 24 months and a GMFV of about £23k, bought new last year. There are some small scuffs on two wheels and a paintchip on the front spoiler about the size of a postage stamp. I don't plan on buying another Mercedes, but wouldn't rule it out entirely if it's the best way to get a good deal.
You must know what your balloon figure is, then just type your number plate into WeBuyAnyCar (or similar) to give a rough current value.
Then you should know if you are in for a Brucie Bonus or getting the bus home once you've handed the keys over.
Also. Isn't the perfect PCP (for the 'buyer') one where there is an unrealistic large balloon value so you hand the car back having paid only a fraction of the actual depreciation?
Then you should know if you are in for a Brucie Bonus or getting the bus home once you've handed the keys over.
Also. Isn't the perfect PCP (for the 'buyer') one where there is an unrealistic large balloon value so you hand the car back having paid only a fraction of the actual depreciation?
Edited by Truckosaurus on Friday 25th July 13:58
Generally you'll make nothing back as your interest will likely equate to any extra you have in value over the balloon figure but if you don't make PCP in the first place it's usually between 10% to 15% of your borrowing. So a 22k car with a balloon of 8k over four years with a 2k deposit would give you something like £1200 to £2000 towards your next car. The idea is you keep paying the interest on another PCP deal though and that's where they get you. If you're lucky you can find a car that depreciates very gently and then sell it half way through the PCP and get your money back.
Doing PCP to get a discount on your next car though isn't really the way to approach it. Save a bigger deposit and just think about the car you're getting now.
Best of luck
Doing PCP to get a discount on your next car though isn't really the way to approach it. Save a bigger deposit and just think about the car you're getting now.
Best of luck
romeogolf said:
Hi Shurv - That was my intention anyway (well, without the private sale, because I really can't be bothered) but I'm just curious as to what sort of equity is usually found.
How common is it to be in negative equity?
Negative equity is impossible as you just hand the car back regardless. That's their problem How common is it to be in negative equity?
Truckosaurus said:
You must know what your balloon figure is, then just type your number plate into WeBuyAnyCar (or similar) to give a rough current value.
Then you should know if you are in for a Brucie Bonus or getting the bus home once you've handed the keys over.
Also. Isn't the perfect PCP (for the 'buyer') one where there is an unrealistic large balloon value so you hand the car back having paid only a fraction of the actual depreciation?
I just ran it through and WBAC is valuing the car at about £20k! I'm not really hoping to get money back, it would just be a bonus!Then you should know if you are in for a Brucie Bonus or getting the bus home once you've handed the keys over.
Also. Isn't the perfect PCP (for the 'buyer') one where there is an unrealistic large balloon value so you hand the car back having paid only a fraction of the actual depreciation?
Edited by Truckosaurus on Friday 25th July 13:58
romeogolf said:
Hi Shurv - That was my intention anyway (well, without the private sale, because I really can't be bothered) but I'm just curious as to what sort of equity is usually found.
How common is it to be in negative equity?
Negative equity is impossible as you just hand the car back regardless. That's their problem How common is it to be in negative equity?
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