Yet another PCP question...

[esxste]

Alright quit the groaning at the back...

Basic facts:

- 28 months into a 36 month PCP contract
- GFMV is ~£6800
- Monthly payment ~£270
- Remaining loan is ~ £2160
- Todays WBAC value is ~£9800


Am I right in thinking that if I VT now I'd get ~£840 from the equity?
(£9800 - £2160 - £6800 )


If I was to want to buy or lease another car, am I better off to wait until the contract finishes or VT now? Would the answer change if I was thinking of a cheaper car or if i was thinking of a more expensive car?

Thanks in advance

[AllyBassman]

Have you got a settlement figure? You need this to work out the cost to finish the agreement now.

If you believe you have 'equity' you'd be mad to VT. VT is walking away from the deal early (once you've paid 50% of the total deal, IE the amount borrowed + interest)

[AllyBassman]

Just to add,

you'd only see any of the equity if you were to trade the car in or sell privatley. VT will see you with nothing.

[a]

Ask for a settlement figure.

Go to a WBAC appointment and see how much they'll offer you based on condition (they will find things).

If settlement figure is less than WBAC, sell and profit!

If settlement figure is more than WBAC, sell and pay the difference (WBAC will handle this for you, they pay the full amount to the lender and you pay WBAC the difference)

Also try other services like Money4YourMotors.com who usually offer more than WBAC.

[esxste]

AllyBassman said:

Just to add,

you'd only see any of the equity if you were to trade the car in or sell privatley. VT will see you with nothing.

Right, thanks

So its not VT i'd be looking at doing, just trading in and paying off the finance company?

Haven't got settlement figure yet, not looked at it that deeply.

[CYMR0]

esxste said:

If I was to want to buy or lease another car, am I better off to wait until the contract finishes or VT now? Would the answer change if I was thinking of a cheaper car or if i was thinking of a more expensive car?

Thanks in advance

1. The settlment figure will probably be a little less than the monthly payments and the GFV added together, as you'd get out of paying ~6 months' interest on the remaining balance, an average of £8k or so, so probably a couple of hundred quid.

2. (That's also the amount you're likely to get knocked down by with WBAC, so let's call it even).

3. As above, VT gets you nothing. You've basically donated a car worth £10k in exchange for getting out of £9k's worth of payments. So a sale is a better option in this case.

4. Which option is better? At the moment your car will be costing you £x per month in depreciation. A cheaper car will probably cost you less overall, but may not be better value for you. Similarly, a more expensive car might cost you more, but you'd rather have the extra car than the extra cash - hence no harm in moving sooner. All down to personal preference and circumstances.

[esxste]

CYMR0 said:

1. The settlment figure will probably be a little less than the monthly payments and the GFV added together, as you'd get out of paying ~6 months' interest on the remaining balance, an average of £8k or so, so probably a couple of hundred quid.


2. (That's also the amount you're likely to get knocked down by with WBAC, so let's call it even).

3. As above, VT gets you nothing. You've basically donated a car worth £10k in exchange for getting out of £9k's worth of payments. So a sale is a better option in this case.

Excellent summation of the situation; thanks!

CYMR0 said:

4. Which option is better? At the moment your car will be costing you £x per month in depreciation. A cheaper car will probably cost you less overall, but may not be better value for you. Similarly, a more expensive car might cost you more, but you'd rather have the extra car than the extra cash - hence no harm in moving sooner. All down to personal preference and circumstances.

I don't need a daily driver, just weekend fun, so for me the debate is about how much money I can justify to myself on a fun car