Need Advice on PCP - new to this site!
Discussion
Hi - apologies I'm new to this site and need some advice on my current 4 year PCP deal. I drive an Audi A5 coupe and are two years in. My job has changed and I'm exceeding the mileage by a huge amount - e.g. Pcp on 12k a year and I m doing 25k. Obviously that doesn't matter I guess unless I'm planning to hand it back. My worry is that I have so much negative equity in it that I will never get out of the situation, do I hang on for another year? Roll it over now? I'm unsure as my mileage isn't going to change. Sorry for the naive post but I just want advice - as I said new to this PCP world.
You have fallen head first into the same trap that most PCP renters get in too.
If you plan to buy the rest of the car when the deal is up then just put the mileage on it. All cars depreciate and it will end up costing you no matter what. You can't get something for nothing.
If you are going to want a new car, or want the cost per mile covered to be reduced then cut your losses now. Or accept the excess mileage charges (Do the math).
But either way, don't sign your self up for another PCP deal. At the end of the day, you are buying two products. A car and a finance package. both will cost you, no matter the amount of smoke and mirrors it is dressed up with.
If you plan to buy the rest of the car when the deal is up then just put the mileage on it. All cars depreciate and it will end up costing you no matter what. You can't get something for nothing.
If you are going to want a new car, or want the cost per mile covered to be reduced then cut your losses now. Or accept the excess mileage charges (Do the math).
But either way, don't sign your self up for another PCP deal. At the end of the day, you are buying two products. A car and a finance package. both will cost you, no matter the amount of smoke and mirrors it is dressed up with.
Thanks for the reply - yes I have gone in head first and it has annoyed me (or rather annoyed with myself). I feel like I am in a situation I can't get out of (I appreciate there are worse things happening in the world). So presumably avoid swapping the car until the four years is up?
At the end of four years I suspect I will have a car with 100k on it and whilst circumstances change I think i another two years I still will be doing 25k a year. I am not knowledgeable on diesel engines but I don't fancy paying for a car with 100k plus on it at the end of the PCP. It seems that paying excess mileage seems the best - I have estimated that to be £3.5k!!! That is why I wondered by swapping now with a higher mileage limit is a better option?
Northernsoul01 said:
Hi - apologies I'm new to this site and need some advice on my current 4 year PCP deal. I drive an Audi A5 coupe and are two years in. My job has changed and I'm exceeding the mileage by a huge amount - e.g. Pcp on 12k a year and I m doing 25k. Obviously that doesn't matter I guess unless I'm planning to hand it back. My worry is that I have so much negative equity in it that I will never get out of the situation, do I hang on for another year? Roll it over now? I'm unsure as my mileage isn't going to change. Sorry for the naive post but I just want advice - as I said new to this PCP world.
Ignore the "trap" comments. This is a simple change of circumstance that is easily rectified with various options=> Do nothing and dig yourself out of any shortfall at the end of it (probably the one i WOULDNT do)
=> Ring the finance company and negotiate the new monthly payment based on revised mileage.
=> Set aside the excess mileage charge for each month as you incur them, so you've no "big bill" at the end if you chose to hand it back
=> Estimate what the car will be worth on the open market with the excess miles and set aside that amount now from savings or a monthly amount
=> Pay off the residual payment at the end of term with savings / a cheap loan.
Its no biggie at all however you're right in looking at it now rather than later.
Northernsoul01 said:
At the end of four years I suspect I will have a car with 100k on it and whilst circumstances change I think i another two years I still will be doing 25k a year. I am not knowledgeable on diesel engines but I don't fancy paying for a car with 100k plus on it at the end of the PCP. It seems that paying excess mileage seems the best - I have estimated that to be £3.5k!!! That is why I wondered by swapping now with a higher mileage limit is a better option?
NO - DONT "swap it out for another car". You are probably in negative equity as is at this point in the agreement so you'll be carrying that over in some form and then piling miles on another car instead.Keep the car well serviced (i get my Passat serviced every 10K miles rather than the 18K or so long life service schedule) and keep it well maintained. A well looked after car with 100K miles on it is barely run in.
Edited by daemon on Tuesday 1st August 11:28
Prizam said:
You have fallen head first into the same trap that most PCP renters get in too.
No he hasnt and no its not. Its a simple matter to adjust - either formally via the finance company or just by simply setting aside a bit extra per month to cover either the excess mileages done that month (if you really plan on handing it back) OR to cover the estimated extra depreciation.Simples.
Prizam said:
both will cost you, no matter the amount of smoke and mirrors it is dressed up with.
PCP is not smoke and mirrors. Its hard to think how it could be any more transparent - deposit + monthly payments for fixed term / mileage, then options at the end. The O/P is quite right to be reviewing it now, now that his circumstances have changed.Northernsoul01 said:
Thanks for the reply - yes I have gone in head first and it has annoyed me (or rather annoyed with myself). I feel like I am in a situation I can't get out of (I appreciate there are worse things happening in the world). So presumably avoid swapping the car until the four years is up?
Avoide swapping at all! Keep it, buy it and then do galactic milage on it. its the only way to get the cost per mile down. When thinking about a new car, ask your self how much the new car is going to cost per month... then ask if your old car is costing that much per month.
I've got out of two PCP deals (both Audi) with equity back in both cases after 18 months on a 48 month deal. Once to swap to another PCP deal and once just to terminate the deal early. In the second situation, I used Tootle and an Audi main dealer offered me a very good price. I got back £3k of the initial £5k deposit that I put in. Granted I lost a few £k by doing this early, but still walked away with deposit for a far cheaper lease deal.
Prizam said:
Northernsoul01 said:
Thanks for the reply - yes I have gone in head first and it has annoyed me (or rather annoyed with myself). I feel like I am in a situation I can't get out of (I appreciate there are worse things happening in the world). So presumably avoid swapping the car until the four years is up?
Avoide swapping at all! Keep it, buy it and then do galactic milage on it. its the only way to get the cost per mile down. When thinking about a new car, ask your self how much the new car is going to cost per month... then ask if your old car is costing that much per month.
A mate of mine used to do 30,000 miles a year easily every year. He used to change every three years to keep up the years and it just to cost him a fortune. He bought himself a freshish Audi and just kept it. He keeps it ultra well serviced and maintained and i think he has something like 380,000 on it now. Costs him a bit every now and then but nothing like the depreciation he'd otherwise suffer on a new / newish car
I'm in a similar boat.
I've done 40,000 miles in 3 years with a year left on my M135i pcp.
I'll probably do 18,000 miles in the next year.
My plan is to get a cheap loan and buy myself out of the PCP deal, then I'll change whenever I feel like it, probably in the 12 months after that.
Might lose a couple of thousand on the actual value compared to the GFV but it'll be significantly cheaper than the excess mileage charges.
Thoughts from the Personal Finance guru's?
I've done 40,000 miles in 3 years with a year left on my M135i pcp.
I'll probably do 18,000 miles in the next year.
My plan is to get a cheap loan and buy myself out of the PCP deal, then I'll change whenever I feel like it, probably in the 12 months after that.
Might lose a couple of thousand on the actual value compared to the GFV but it'll be significantly cheaper than the excess mileage charges.
Thoughts from the Personal Finance guru's?
Tom_Spotley_When said:
I'm in a similar boat.
I've done 40,000 miles in 3 years with a year left on my M135i pcp.
I'll probably do 18,000 miles in the next year.
My plan is to get a cheap loan and buy myself out of the PCP deal, then I'll change whenever I feel like it, probably in the 12 months after that.
Might lose a couple of thousand on the actual value compared to the GFV but it'll be significantly cheaper than the excess mileage charges.
Thoughts from the Personal Finance guru's?
Yeah theres cheap loans out there, you know the car and you're happy to drive on at it.t I've done 40,000 miles in 3 years with a year left on my M135i pcp.
I'll probably do 18,000 miles in the next year.
My plan is to get a cheap loan and buy myself out of the PCP deal, then I'll change whenever I feel like it, probably in the 12 months after that.
Might lose a couple of thousand on the actual value compared to the GFV but it'll be significantly cheaper than the excess mileage charges.
Thoughts from the Personal Finance guru's?
Northernsoul01 said:
Hi - apologies I'm new to this site and need some advice on my current 4 year PCP deal. I drive an Audi A5 coupe and are two years in. My job has changed and I'm exceeding the mileage by a huge amount - e.g. Pcp on 12k a year and I m doing 25k. Obviously that doesn't matter I guess unless I'm planning to hand it back. My worry is that I have so much negative equity in it that I will never get out of the situation, do I hang on for another year? Roll it over now? I'm unsure as my mileage isn't going to change. Sorry for the naive post but I just want advice - as I said new to this PCP world.
If you are up for a fight google, voluntary termination, despite all the threats from finance companies none of them have taken a case to court ever.http://legalbeagles.info/forums/showthread.php?345... is a good starting point.
Edited by babatunde on Tuesday 1st August 15:30
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