PCP getting out early

[240Cup]

Bear with me, never had one of these!

Say I buy a new car on 3yr PCP for say 50 grand, and within 6 months have an agreement with someone to sell privately for 75 grand.

PCP is say 5,000 down, 35,000 balloon, very low monthlies, 5k mileage per year etc.

What do I end up paying to come out and presumably I am free to bank the difference/the profit?

Is there a penalty or is it like the regulated lease purchase finance - 1month 28 days interest?

Thank you,

[Deep Thought]

240Cup said:

Bear with me, never had one of these!

Say I buy a new car on 3yr PCP for say 50 grand, and within 6 months have an agreement with someone to sell privately for 75 grand.

PCP is say 5,000 down, 35,000 balloon, very low monthlies, 5k mileage per year etc.

What do I end up paying to come out and presumably I am free to bank the difference/the profit?

Is there a penalty or is it like the regulated lease purchase finance - 1month 28 days interest?

Thank you,

You will pay the settlement figure. So £35k plus the remaining monthlies less a small amount of discount on the interest charges for settling early (will vary dependant on the interest rate charged)

And yes you would be free to bank the difference / profit.

Edited by Deep Thought on Monday 28th March 21:17

Edited by Deep Thought on Monday 28th March 22:17

[Finding Neutral]

The get out charges are usually eye watering.

Selling is often not an option either as pcp cars are often in negative equity.

But… selling it would likely be your easiest most cost effective option. Or writing it off (joking)..

[jimmsy]

Finding Neutral said:

The get out charges are usually eye watering.

Selling is often not an option either as pcp cars are often in negative equity.

But… selling it would likely be your easiest most cost effective option. Or writing it off (joking)..

It reads like due to the current market they're in positive equity.

Best thing to do is ring the finance company and get a settlement figure, that's the only way you'll know for certain. There aren't usually charges for doing this early (in my experience), but I can't guarantee that. It's free to get a settlement figure, and there's no negatives from doing so - they can't punish you for asking.

[ZX10R NIN]

Get a settlement figure from the finance company & go from there.

[Deep Thought]

Finding Neutral said:

The get out charges are usually eye watering.

There are no "get out" charges.

PCP is a form of HP and as such is regulated. They cannot charge you extra to finish the agreement early.

In fact he'd almost certainly get a discount on the remaining balance for early settlement - the "settlement figure".

Finding Neutral said:

Selling is often not an option either as pcp cars are often in negative equity.

He wouldnt be in negative equity with an offer of £75K.

Finding Neutral said:

But… selling it would likely be your easiest most cost effective option. Or writing it off (joking)..

Which is what he wants to do.... for £25K more than he paid for it?

Did you read what he put or just see PCP and then spurt a load of prejudices?

Edited by Deep Thought on Monday 28th March 21:15

[240Cup]

Deep Thought has summed up the way I thought it would work.

[CloudStuff]

It's regulated, so maximum two month's worth of interest can be charged when calulating settlement.

So it will be amount borrowed, minus repayments made, plus two month's intest which should mean a very, very healthy profit.

I have never understood the logic behind leasing cars - now that really does mean you're locked in. Nor the sucking of teeth, 'pcp trap' brigade on here.

PCP - with a sensible deposit, and the market in your favour can be a very cheap way of getting 'in to' and 'out of' some laughably enjoyable cars.

[Ian Geary]

I suspect numerous internet threads about being "locked in" to PCP are from people who can't afford or finance the balloon, and don't have positive equity.


Though in this invented hypothetical situation, yes it would make sense

Ian

[RUSTILLDOWN]

240Cup said:

Deep Thought has summed up the way I thought it would work.

He’s a dreamboat, and good at graphs

[Deep Thought]

RUSTILLDOWN said:

240Cup said:

Deep Thought has summed up the way I thought it would work.

He’s a dreamboat, and good at graphs

[CloudStuff]

Ian Geary said:

I suspect numerous internet threads about being "locked in" to PCP are from people who can't afford or finance the balloon, and don't have positive equity.


Though in this invented hypothetical situation, yes it would make sense

Ian

[AsMyOldManUsedToSayIfYouCan'tAffordItThreeTimesYouCan'tAffordItMode]I agree!
[/AsMyOldManUsedToSayIfYouCan'tAffordItThreeTimesYouCan'tAffordItMode]