End of first PCP advice

[T_Smith]

Hi all,
First time poster and hardly the brightest when it comes to maths so bear with me. I'd really appreciate some advice with regards to the end of my first PCP in July.

I currently pay £255 a month, my settlement figure is £10,800, the residual figure is £9200 and my car is currently valued by the dealership at £13,800.
From my initial inquiries I don't think I will get a deal as cheap as my last one. I have no issues with the car and wouldn't be opposed to keeping it. I'd really like to get people's opinions who are experienced with PCP deals on what would be the best thing to do next.

Thanks in advance!

[liner33]

What is the car worth trade in IE a price from wbac?

[T_Smith]

liner33 said:

What is the car worth trade in IE a price from wbac?

wbac £14,225 but dealership valued it at £13,800

[InitialDave]

If you like the car, it seems like running out the PCP to July and paying off the balance is a good choice?

[Ian Geary]

Never leased a car before, but it's an interesting scenario

So, pay 6 more months at £255 = £1,530 (ignoring for now the rabbit hole of ending it early)

At this point you can decide to pay a further £10,800 to own a car that's worth (at least) £13,800. Ie £3k equity, subject to market changes in the next 6 months.

Presumably you could borrow this £10,800 from a bank. You could immediately sell the car, repay the loan and make about £3k profit. But of course you still presumably want a car, and that £3k isn't going to buy you much right now.

To keep the car, you'd just don't sell it, and repay the loan and interest over a sensible perioid - ie one to match how long you plan to keep the car. Say 4 years, the repayments wouldn't be far off what you're paying now. However, maintenance bills will start to appear. Your £3k equity would also be eroded over time, as the car gets older and is used more, but you'd still end up with some value owned by you.


Staying with the dealer: they might offer to recycle some of that £3k equity in a new lease? But as you've said it's unlikely to be as good a deal, but would get you in a new car without maintenance worries.


I guess it depends to some extent what your priorities are and whether your circumstances are likely to change?


Hth

[Deep Thought]

T_Smith said:

Hi all,
First time poster and hardly the brightest when it comes to maths so bear with me. I'd really appreciate some advice with regards to the end of my first PCP in July.

I currently pay £255 a month, my settlement figure is £10,800, the residual figure is £9200 and my car is currently valued by the dealership at £13,800.
From my initial inquiries I don't think I will get a deal as cheap as my last one. I have no issues with the car and wouldn't be opposed to keeping it. I'd really like to get people's opinions who are experienced with PCP deals on what would be the best thing to do next.

Thanks in advance!

The deals on new cars are pretty naff and you could wait months and months to get a car.

Personally.... i'd take out a cheap loan and keep the car you have.

You could do that sooner rather than later, no need to wait until the end of the term (particularly if the APR is higher on the PCP than you can get a cheap loan for)

[Deep Thought]

Ian Geary said:

Never leased a car before, but it's an interesting scenario

So, pay 6 more months at £255 = £1,530 (ignoring for now the rabbit hole of ending it early)

At this point you can decide to pay a further £10,800 to own a car that's worth (at least) £13,800. Ie £3k equity, subject to market changes in the next 6 months.

Presumably you could borrow this £10,800 from a bank. You could immediately sell the car, repay the loan and make about £3k profit. But of course you still presumably want a car, and that £3k isn't going to buy you much right now.

To keep the car, you'd just don't sell it, and repay the loan and interest over a sensible perioid - ie one to match how long you plan to keep the car. Say 4 years, the repayments wouldn't be far off what you're paying now. However, maintenance bills will start to appear. Your £3k equity would also be eroded over time, as the car gets older and is used more, but you'd still end up with some value owned by you.


Staying with the dealer: they might offer to recycle some of that £3k equity in a new lease? But as you've said it's unlikely to be as good a deal, but would get you in a new car without maintenance worries.


I guess it depends to some extent what your priorities are and whether your circumstances are likely to change?


Hth

You dont need to take out a loan to do that. Any of the buyer sites / his local dealers would clear the finance and pay him the difference.

Its also possible to sell the car privately and have the buyer pay the finance off directly to the finance company and pay him the difference.

[InitialDave]

Ian Geary said:

Never leased a car before, but it's an interesting scenario

So, pay 6 more months at £255 = £1,530 (ignoring for now the rabbit hole of ending it early)

At this point you can decide to pay a further £10,800 to own a car that's worth (at least) £13,800. Ie £3k equity, subject to market changes in the next 6 months.

The £10,800 is a settlement figure, so to pay it off now.

£9,200 would be the payment at end of term.

So very little in it.

[Darumvej]

I was in the same position last year with my wifes car, payments were similiar. I could not find a 3 year old car the same as we had for less than £15k.
She was happy with the car, so paid the final payment £9700.

[andburg]

I've just gone through this on my civic.

Final payment 2500
WBAC 4200
Dealer PX 4750

I listed it via motorway.co.uk and got £6149 collected. (dealer cleared finance and sent me the remainder)

from listing to collection and money in my account was 5 days and other than having to use their app to take photos was no hassle

Edited by andburg on Tuesday 18th January 09:19

[covmutley]

You are in the good position of having good equity due to a freaky used market.

Isnt the question what you would do if you dont extend/buy it?

New cars are in short supply/delayed and new prices/monthlies has shot up. People on her will rightly say that the prices only follow inflation, but it does seem that most of the rise has been in the last couple of years.

If the car, id be getting a cheap tesco/sainsburys loan and just buy it.

[The_Doc]

Settlement figure on my Up Gti £4996
Used value on Autotrader £15,000 to £16,000 for identical car/millage.
WBAC offered £14,995

So I paid the £5k, because I love it! Now: no direct debit

If I'd needed the £10k in hand, I could have a cashed in the asset appreciation.

[Far Cough]

T_Smith said:

Hi all,
First time poster and hardly the brightest when it comes to maths so bear with me. I'd really appreciate some advice with regards to the end of my first PCP in July.

I currently pay £255 a month, my settlement figure is £10,800, the residual figure is £9200 and my car is currently valued by the dealership at £13,800.
From my initial inquiries I don't think I will get a deal as cheap as my last one. I have no issues with the car and wouldn't be opposed to keeping it. I'd really like to get people's opinions who are experienced with PCP deals on what would be the best thing to do next.

Thanks in advance!

Have you rung the finance company and asked if they will re finance it allowing you to just continue as you are now if you like the car that much ? Its another option to consider.

[The_Doc]

They usually offer about 2-3% above unsecured loan rates for refinance.
It's car buying, you either lose, lose or you lose.

[liner33]

The_Doc said:

Settlement figure on my Up Gti £4996
Used value on Autotrader £15,000 to £16,000 for identical car/millage.
WBAC offered £14,995

So I paid the £5k, because I love it! Now: no direct debit

If I'd needed the £10k in hand, I could have a cashed in the asset appreciation.

For a 2018 car ?

[T_Smith]

Thanks to everyone who took the time read and reply to my question, it was really helpful! I'm now pretty certain I will take a personal loan at 2.8% and buy the car from the finance company.

[Mark V GTD]

The_Doc said:

Settlement figure on my Up Gti £4996

Wow, great offers - do you mind me asking how old the car is?

[The_Doc]

2018 car, they were £13,500 new

[loskie]

The_Doc said:

Settlement figure on my Up Gti £4996
Used value on Autotrader £15,000 to £16,000 for identical car/millage.
WBAC offered £14,995

So I paid the £5k, because I love it! Now: no direct debit

If I'd needed the £10k in hand, I could have a cashed in the asset appreciation.

Jeeesus that's good.

Wind me back to Jan 2020. I looked at lease, I looked at PCP. Leased a Q5 for £2500 plus £405 month (18000m year).

Because it was better value than PCP to the tune of £2300 or so.

HOW WRONG WAS I!

My mileage at nearly two years is 16000 of the 36000 and the car is worth the same as a new one would have cost me with discount.

If only I had a crystal ball!

Your Up story is seriously inpressive

Edited by loskie on Tuesday 18th January 18:19

[Mark V GTD]

Thanks Doc. I’m paying £15,800 for a factory order Gti with options to arrive (hopefully) in April. I am getting it basically to run for a few months while I wait for another car to come later on in the year. I was hoping to get my money back when I sell it at three months old but as they are over £18k new now maybe I will make a bit of cash for my trouble!