PCP - handing back and walking away?

[SteellFJ]

Well, its probably been done to death before but as usual Search functions Kaput!

I entered into a 24 month PCP deal on a 3 series on April 27th this year, a week later I lost my job!!! 

Now I’m earning considerably less a month and struggling to the point that money troubles have me and the OH fighting, something we never do.

We rode the troubles for three months which all came to a head last night.

My query is something I’ve been pondering for a couple of weeks now and really have to consider.

I got a £5500 deposit for my EP3 of which about £1400 was negative equity. The BMW was £12,995 over 24 months.

Being only 5/6 months into this can I hand it back and walk away or better yet expect some of the deposit back if I can hand it in??

This is our first year as home owners and its been truly horrible!

[kiethton]

As PCP's have a large block at the end of the agreement defined as a credit payment (and considering the short length used so far) you would not be able to VT the agreement (99% sure but haven't seen specific contract wording).

Your best option seems to be to sell the car now to repay the total balance of finance owing, however you are likely to be in negative equity. Not a good situation for all concerned TBH.

The only way I can think of is to maybe sign up to one of the sites to port/sell your agreement to another buyer (how possible this is however, I don't know).

[mu0n]

SteellFJ said:

Well, its probably been done to death before but as usual Search functions Kaput!

I entered into a 24 month PCP deal on a 3 series on April 27th this year, a week later I lost my job!!! 

Now I’m earning considerably less a month and struggling to the point that money troubles have me and the OH fighting, something we never do.

We rode the troubles for three months which all came to a head last night.

My query is something I’ve been pondering for a couple of weeks now and really have to consider.

I got a £5500 deposit for my EP3 of which about £1400 was negative equity. The BMW was £12,995 over 24 months.

Being only 5/6 months into this can I hand it back and walk away or better yet expect some of the deposit back if I can hand it in??

This is our first year as home owners and its been truly horrible!

fk lol, new house so you decide to take a car out on finance in your first year? I feel sorry for you but damn, you didn't help yourself too much mate!

It depends on your contract conditions. Are you paying off around £370pm? What interest are you being charged? What's the BMW worth now?

Of course, you could always sell the car privately and then pay off the finance but I expect you will pay a penalty (a bit like early mortgage repayment). I've worked out roughly you've paid off £6,320 on your BMW, which leaves £6,675 to pay off. I assume if you sold your car it would be about £9.5k private? If that?

So might be worth selling privately, pay off your contract and buy a run around with the £3k odd you have left (minus any of the fees your contract will make you pay on early repayment - maybe 3-4%??).

[mu0n]

kiethton said:

As PCP's have a large block at the end of the agreement defined as a credit payment (and considering the short length used so far) you would not be able to VT the agreement (99% sure but haven't seen specific contract wording).

Your best option seems to be to sell the car now to repay the total balance of finance owing, however you are likely to be in negative equity. Not a good situation for all concerned TBH.

The only way I can think of is to maybe sign up to one of the sites to port/sell your agreement to another buyer (how possible this is however, I don't know).

I don't think he would be in negative equity as the deposit seemed quite large against the value of the car (almost 1/3).

[SteellFJ]

mu0n said:

fk lol, new house so you decide to take a car out on finance in your first year? I feel sorry for you but damn, you didn't help yourself too much mate!

It depends on your contract conditions. Are you paying off around £370pm? What interest are you being charged? What's the BMW worth now?

Of course, you could always sell the car privately and then pay off the finance but I expect you will pay a penalty (a bit like early mortgage repayment). I've worked out roughly you've paid off £6,320 on your BMW, which leaves £6,675 to pay off. I assume if you sold your car it would be about £9.5k private? If that?

So might be worth selling privately, pay off your contract and buy a run around with the £3k odd you have left (minus any of the fees your contract will make you pay on early repayment - maybe 3-4%??).

Thanks for the replies, Currently the car is £312 a month and the interest rate i'm not sure on at present.

I had not considered the private sale route to be honest as i was not sure to could be done on PCP.

I had the civic on finance as well and the move inside the first year was to save on fuel and tax on the car, I had not banked on losing my job.

[kiethton]

mu0n said:

kiethton said:

As PCP's have a large block at the end of the agreement defined as a credit payment (and considering the short length used so far) you would not be able to VT the agreement (99% sure but haven't seen specific contract wording).

Your best option seems to be to sell the car now to repay the total balance of finance owing, however you are likely to be in negative equity. Not a good situation for all concerned TBH.

The only way I can think of is to maybe sign up to one of the sites to port/sell your agreement to another buyer (how possible this is however, I don't know).

I don't think he would be in negative equity as the deposit seemed quite large against the value of the car (almost 1/3).

Apologies, I read it as if the negative equity of the EP3 was rolled into this PCP.

[SteellFJ]

kiethton said:

Apologies, I read it as if the negative equity of the EP3 was rolled into this PCP.

It was rolled in to this deal. separate DD which is £68 of the £312 monthly figure.

[mu0n]

SteellFJ said:

kiethton said:

Apologies, I read it as if the negative equity of the EP3 was rolled into this PCP.

It was rolled in to this deal. separate DD which is £68 of the £312 monthly figure.

Seems odd, wouldn't the company you took out the PCP with have paid off the outstanding finance of the Civic, therefore leaving you with a deposit of £4100 (5500-1400)???

Before you run into payment arrears, I would phone up the PCP company soonest and fully explain your situation and what your options are. Ask them about selling your car privately and what penalisations you would pay if you did that? They should be able to calculate it out and tell if you what you'd need to pay them back and thus you can workout what you'd need to get for your car to be in the clear to buy a run around.

[Grandfondo]

Get a quote from Webuyanycar which will give you an idea of the cash value then find out from the finance company what the settlement amount is and that will give you the Good or bad news!

Edited by Grandfondo on Monday 7th October 14:54

[anonymous-user]

Not much help, but if you'd gone straight back to BMW as soon as you got made redundant then you might have been able to cancel the deal, as there is usually a "cooling off" period on these things.

[kiethton]

Inkyfingers said:

Not much help, but if you'd gone straight back to BMW as soon as you got made redundant then you might have been able to cancel the deal, as there is usually a "cooling off" period on these things.

On the finance side possibly but its near impossible that they would let you walk away from the transaction and return the car if you had already taken delivery.

[SteellFJ]

Thanks All, i'll speak to BMW Finance ASAP.

[anonymous-user]

kiethton said:

Inkyfingers said:

Not much help, but if you'd gone straight back to BMW as soon as you got made redundant then you might have been able to cancel the deal, as there is usually a "cooling off" period on these things.

On the finance side possibly but its near impossible that they would let you walk away from the transaction and return the car if you had already taken delivery.

You may well be right, thankfully it's not a situation i've ever had to consider.

[rfoster]

SteellFJ said:

Thanks All, i'll speak to BMW Finance ASAP.

You'll get a regulated settlement figure from them on a PCP agreement - with the reasonable deposit you put into the deal you may find that the settlement figure is less than the current value of the car. Best to try & sell the car privately and have the finance paid off as part of the transaction - it's quite common nowadays. Good luck.

[Grandfondo]

The way I am reading the OPs post is he traded in a car with £1.4k N/E and the BMW was £12.995.
So £13,495 plus interest on a car worth now for car about £8/9k cash if lucky!

[SteellFJ]

anonymous said:

[redacted]

12995 - 5500 = 7495 / 24 = £312pm (plus a few pennies)

I did not want to say in case i was wrong but i'm pretty sure its 0% interest on the deal which works out bang on!

Lesson has been learnt, finance is not the way forward i knew that on the last car but taking the BMW still gave me less time than i had left on the Civic which cost £200 a more a month on fuel before i lost my job and commuted 16 miles more a day, not to mention more on tax.

[mu0n]

I thought you said the 68 per month was built into the 312 per month payment?

[SteellFJ]

anonymous said:

[redacted]

OK its looking like a lot of confusion now. The 312 is inclusive of the 68 which was to cover the negative equity.

the car was 12995 if i remember right, gave 5500 against a finance of 6900ish.

but adding the number does not add up now... have they lied and gave me 4100 for car maybe? or even wrote of some/all of the equity in error?

I've lost it now!! i'll go back to bed ASAP and recount.

Final payment on the car is higher than norm prob? not sure exactly what this is.

[mu0n]

anonymous said:

[redacted]

I assumed the latter and that the OP in effect put down a deposit of 4,100 (able to use the 1,400 of the 5,500 the car was worth to pay off his old contract).

If he had 1400 worth of negative equity in the EP3, he did well to secure it as a deposit.

[Grandfondo]

anonymous said:

[redacted]

Now your getting it!

Why do people with negative equity think getting a new car with more finance is a good idea?