Are the wheels about to fall of car finance?

Are the wheels about to fall of car finance?

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Discussion

ashleyman

6,963 posts

98 months

Saturday 8th July 2017
quotequote all
Little bit of a thread hijack but seems like a good place to post.

Because of this Golf Event (£1500 Deposit Contribution) happening I went and had a chat with someone at a local VW dealer this morning about potentially swapping my Golf 7R for a 7.5R.

I knew for sure I wasn't in any negative equity but had expected to break even on my finance with the car being worth what I owe, this is what I was told in January/February time when looking to get one of the last pre-facelift models. To my surprise they said I have £600 of positive equity. Intersting.

Just to be sure they weren't pulling a fast one and just saying it to get me to swap I then took the car to a different VW dealer to see what they'd offer. Told them if I was looking to change it would be a factory order so they did the calculations based on it being 4 months from now. Settlement would be £21k, PX would be £22,500.

My question is, is this equity likely to increase, in which case I should stay put so I've got more towards my next car, or is it likely to stay the same or perhaps even turn to negative equity in the future. I understand none of us have crystal balls but would like your opinions!

nyxster

1,452 posts

170 months

Saturday 8th July 2017
quotequote all
ashleyman said:
Little bit of a thread hijack but seems like a good place to post.

Because of this Golf Event (£1500 Deposit Contribution) happening I went and had a chat with someone at a local VW dealer this morning about potentially swapping my Golf 7R for a 7.5R.

I knew for sure I wasn't in any negative equity but had expected to break even on my finance with the car being worth what I owe, this is what I was told in January/February time when looking to get one of the last pre-facelift models. To my surprise they said I have £600 of positive equity. Intersting.

Just to be sure they weren't pulling a fast one and just saying it to get me to swap I then took the car to a different VW dealer to see what they'd offer. Told them if I was looking to change it would be a factory order so they did the calculations based on it being 4 months from now. Settlement would be £21k, PX would be £22,500.

My question is, is this equity likely to increase, in which case I should stay put so I've got more towards my next car, or is it likely to stay the same or perhaps even turn to negative equity in the future. I understand none of us have crystal balls but would like your opinions!
yes it will increase. basically the interest is 'front loaded' based on the declining balance being higher at the start of the agreement than towards the end so as you make more payments the proportion of capital paid vs interest is higher.

Carl_Manchester

12,103 posts

261 months

Saturday 8th July 2017
quotequote all
ashleyman said:
Little bit of a thread hijack but seems like a good place to post.

My question is, is this equity likely to increase, in which case I should stay put so I've got more towards my next car, or is it likely to stay the same or perhaps even turn to negative equity in the future. I understand none of us have crystal balls but would like your opinions!
I have to wait a while to order my 7.5R (January) for May 2018 delivery however what I would say is that they 'could be' up to 11,000 Golf R's looking to be flipped over nationally between now and then. That is a very large number of Golf R's to move in a short space of time.

ashleyman

6,963 posts

98 months

Saturday 8th July 2017
quotequote all
Carl_Manchester said:
ashleyman said:
Little bit of a thread hijack but seems like a good place to post.

My question is, is this equity likely to increase, in which case I should stay put so I've got more towards my next car, or is it likely to stay the same or perhaps even turn to negative equity in the future. I understand none of us have crystal balls but would like your opinions!
I have to wait a while to order my 7.5R (January) for May 2018 delivery however what I would say is that they 'could be' up to 11,000 Golf R's looking to be flipped over nationally between now and then. That is a very large number of Golf R's to move in a short space of time.
This worries me. I don't want to wait to get into a spot where I'm in negative equity and with this special event and the finance contribution the cost to change is minimal. So annoying! I could have my 7.5R in October '17 if I order this week.

mk2driver

167 posts

115 months

Saturday 8th July 2017
quotequote all
ashleyman said:
Carl_Manchester said:
ashleyman said:
Little bit of a thread hijack but seems like a good place to post.

My question is, is this equity likely to increase, in which case I should stay put so I've got more towards my next car, or is it likely to stay the same or perhaps even turn to negative equity in the future. I understand none of us have crystal balls but would like your opinions!
I have to wait a while to order my 7.5R (January) for May 2018 delivery however what I would say is that they 'could be' up to 11,000 Golf R's looking to be flipped over nationally between now and then. That is a very large number of Golf R's to move in a short space of time.
This worries me. I don't want to wait to get into a spot where I'm in negative equity and with this special event and the finance contribution the cost to change is minimal. So annoying! I could have my 7.5R in October '17 if I order this week.
If you are happy with the deal the way it is now then go for it.

If you wait things could get better or they could get worse - the way I approach these sorts of situations is make the decision based on the facts at the time.

djc206

12,245 posts

124 months

Saturday 8th July 2017
quotequote all
You could just sell the car, bank the equity and lease one on one of the very good deals going?

liner33

10,642 posts

201 months

Sunday 9th July 2017
quotequote all
djc206 said:
You could just sell the car, bank the equity and lease one on one of the very good deals going?
You cant sell something you dont own !

ashleyman

6,963 posts

98 months

Sunday 9th July 2017
quotequote all
djc206 said:
You could just sell the car, bank the equity and lease one on one of the very good deals going?
Could do. When I got my current one PCP was the cheapest at the time. Then 3 months later the leases started. frown

I'll need to look into how it works though as although the car is in my name it is on a PCP and therefore VWFS also have an interest in it.

daemon

35,724 posts

196 months

Sunday 9th July 2017
quotequote all
liner33 said:
djc206 said:
You could just sell the car, bank the equity and lease one on one of the very good deals going?
You cant sell something you dont own !
You can. Easily.

(a) sell the car privately, have the buyer clear the finance directly with the finance company, and pay you the difference. Happens all the time.
(b) sell it to a WBAC type site or similar, they will clear the finance and pay you the difference.
(c) sell it to a dealer, they will clear the finance and pay you the difference.

Mandat

3,880 posts

237 months

Sunday 9th July 2017
quotequote all
liner33 said:
You cant sell something you dont own !
Of course you can sell a car that's on PCP.

liner33

10,642 posts

201 months

Sunday 9th July 2017
quotequote all
Mandat said:
Of course you can sell a car that's on PCP.
You dont have clear title to it , its not your car to sell , you can ask permission from the finance company but you might not get it

carlpea

381 posts

138 months

Sunday 9th July 2017
quotequote all
liner33 said:
Mandat said:
Of course you can sell a car that's on PCP.
You dont have clear title to it , its not your car to sell , you can ask permission from the finance company but you might not get it
As long as the full amount is paid off I'm sure the finance company wouldn't care less.

HedgeyGedgey

1,281 posts

93 months

Sunday 9th July 2017
quotequote all
liner33 said:
You dont have clear title to it , its not your car to sell , you can ask permission from the finance company but you might not get it
I'd say this, the v5 isn't proof of ownership it's just the registered keeper. The legal owner of the car is the finance company
You'd have to pay the remaining balance of the PCP deal, then buy the car from them afterwards. Sounds expensive to me

Edited by HedgeyGedgey on Sunday 9th July 12:17

daemon

35,724 posts

196 months

Sunday 9th July 2017
quotequote all
liner33 said:
Mandat said:
Of course you can sell a car that's on PCP.
You dont have clear title to it , its not your car to sell , you can ask permission from the finance company but you might not get it
If you ring in advance and ask for a settlement figure, which you'd have to do anyway, then tell them you plan on clearing the finance soon, they really wont give a monkeys as to who clears it.

Its a common practice, they wont tell you no.

gizlaroc

17,251 posts

223 months

Sunday 9th July 2017
quotequote all
liner33 said:
You dont have clear title to it , its not your car to sell , you can ask permission from the finance company but you might not get it
The only rule is if you sell it you have to settle the finance.

Stop and think, how many owners clear the finance before selling it on?
I reckon less than 1%.

Maybe this is the reason many get shafted come trade in? They presume they have to hand it back or find £20,000??


Always start to negotiate your new car with plenty of time left, at least 3 months I find works best.
Worse case is you have days and have to take the GFV or a crap PX as they know you have no other option.





I much prefer buying a car privately which has finance on it, far safer.


Edited by gizlaroc on Sunday 9th July 14:34

liner33

10,642 posts

201 months

Sunday 9th July 2017
quotequote all
gizlaroc said:
Stop and think, how many owners clear the finance before selling it on?
I reckon less than 1%.

Maybe this is the reason many get shafted come trade in? They presume they have to hand it back or find £20,000??



Edited by gizlaroc on Sunday 9th July 14:34
Most trade it against another new car so no they dont settle the finance any shortfall is added to the new finance deal

It is illegal to sell a car with outstanding finance on it so you cant just "sell" it and pocket the difference , you have to contact the finance provider for a settlement figure , this may or may not be less than the car is worth

NickCQ

5,392 posts

95 months

Sunday 9th July 2017
quotequote all
liner33 said:
Most trade it against another new car so no they dont settle the finance any shortfall is added to the new finance deal
Is this right? I thought the idea with PCP at least was that the finance company is 'on risk' for the shortfall, so from the consumer perspective this deficit ceases to exists when the term expires. That's why they use the terminology 'optional final payment' - you always have the option to hand the car back and pay relevant excess mileage and condition charges with no liability for the value vs the outstanding finance.

CharlesdeGaulle

26,091 posts

179 months

Sunday 9th July 2017
quotequote all
gizlaroc said:
I much prefer buying a car privately which has finance on it, far safer.
I may be in a minority, but outstadning finance on a car from a private seller would put me right off. It would have to be a very special car for me to consider that sort of purchase, and certainly not a sodding Golf.

Venturist

3,472 posts

194 months

Sunday 9th July 2017
quotequote all
[redacted]

daemon

35,724 posts

196 months

Sunday 9th July 2017
quotequote all
liner33 said:
gizlaroc said:
Stop and think, how many owners clear the finance before selling it on?
I reckon less than 1%.

Maybe this is the reason many get shafted come trade in? They presume they have to hand it back or find £20,000??



Edited by gizlaroc on Sunday 9th July 14:34
Most trade it against another new car so no they dont settle the finance any shortfall is added to the new finance deal

It is illegal to sell a car with outstanding finance on it so you cant just "sell" it and pocket the difference , you have to contact the finance provider for a settlement figure , this may or may not be less than the car is worth
I really dont know why you're labouring this point. Noone is suggesting selling the car and pocketing the money. You can wholly and legally sell the car, have the buyer pay the finance company and keep any balance.

Its done all the time. Its standard practice.