Negative equity - is this normal?
Discussion
I’m 7 months into a 48 month PCP on a 2020 Audi Q3.
It has about 7.5k miles on the clock.
I paid nil deposit, negligible equity from last deal as trade in, and there was nothing to pay in the first 3 months. Monthlies are £477,
Settlement figure - £31.5k
WBAC valuation - £24k
So I’m £7.5k in negative equity. Is this normal or something to do with Covid or something else?
It has about 7.5k miles on the clock.
I paid nil deposit, negligible equity from last deal as trade in, and there was nothing to pay in the first 3 months. Monthlies are £477,
Settlement figure - £31.5k
WBAC valuation - £24k
So I’m £7.5k in negative equity. Is this normal or something to do with Covid or something else?
I'm curious that you seem surprised by the negative equity you put basically nothing in as a deposit, you have added on 7.5k miles and made very few payments on the deal and the car lost a good few grand in value as soon as you drove it off the forecourt.
How did you imagine you would have positive equity in the car at this stage?
How did you imagine you would have positive equity in the car at this stage?
Yeah sounds normal to me, especially if you paid zero deposit.
Our Mini was 24k new so £2k deposit and £300pm on a 4 year PCP. I’m at month 35 and settlement is £14300 but WBAC is £11.5k so nowhere near.
I can VT it once I get to £13400 which is 50% of the cost plus interest so that’s a better option as I don’t see myself ever being in positive equity to a point it’s worth me buying the car.
Under average miles too, 25k total for the three years.
Our Mini was 24k new so £2k deposit and £300pm on a 4 year PCP. I’m at month 35 and settlement is £14300 but WBAC is £11.5k so nowhere near.
I can VT it once I get to £13400 which is 50% of the cost plus interest so that’s a better option as I don’t see myself ever being in positive equity to a point it’s worth me buying the car.
Under average miles too, 25k total for the three years.
t, what have I got myself into? An expensive mistake...
AudiMan9000 said:
So in July 2020 I got a new Audi Q3 on PCP. Nil cash deposit. First 3 months free. £477 pcm x 45. 15k miles pa.
Only made two payments so far. 7k miles on clock.
The 15k figure used to be justified as I drove a lot in my old job. As of January, I’ve changed career and am likely to be WFH permanently. Annual mileage could be as low as 5k. Car likely to sit on the drive all week unused, save for a few short journeys when lockdown lifts (luckily I got the petrol model).
Now considering having 3rd baby (already have two kids aged 1 and 2). Wife has a Mini Countryman; PCP runs out in May 2022 and costs £250 pcm.
Wife has suggested we now only need one car, a bigger car (think Q7) to accommodate a 3rd kid.
Any thoughts/advice?
Only made two payments so far. 7k miles on clock.
The 15k figure used to be justified as I drove a lot in my old job. As of January, I’ve changed career and am likely to be WFH permanently. Annual mileage could be as low as 5k. Car likely to sit on the drive all week unused, save for a few short journeys when lockdown lifts (luckily I got the petrol model).
Now considering having 3rd baby (already have two kids aged 1 and 2). Wife has a Mini Countryman; PCP runs out in May 2022 and costs £250 pcm.
Wife has suggested we now only need one car, a bigger car (think Q7) to accommodate a 3rd kid.
Any thoughts/advice?
No regret or desire to get rid early. Just curiosity. It seem a huge amount of negative equity to be in. But you’re right, I paid no deposit, only paid 3 x £477 in 7 months of ownership, and drove it 7.5k. I’m doing much less than the 15k miles pa my deal is based on. So hopefully my unnecessarily larger monthly payments will clear off the negative equity faster than commensurate payments otherwise would have.
AudiMan9000 said:
I’m 7 months into a 48 month PCP on a 2020 Audi Q3.
It has about 7.5k miles on the clock.
I paid nil deposit, negligible equity from last deal as trade in, and there was nothing to pay in the first 3 months. Monthlies are £477,
Settlement figure - £31.5k
WBAC valuation - £24k
So I’m £7.5k in negative equity. Is this normal or something to do with Covid or something else?
Entirely normal given your deposit, term and price of vehicle. It has about 7.5k miles on the clock.
I paid nil deposit, negligible equity from last deal as trade in, and there was nothing to pay in the first 3 months. Monthlies are £477,
Settlement figure - £31.5k
WBAC valuation - £24k
So I’m £7.5k in negative equity. Is this normal or something to do with Covid or something else?
RUSTILLDOWN said:
An expensive mistake...
My thoughts are wow, just wow. Two babys 1 and 2 and you want another and you are paying £727 per month on cars. AudiMan9000 said:
So in July 2020 I got a new Audi Q3 on PCP. Nil cash deposit. First 3 months free. £477 pcm x 45. 15k miles pa.
Only made two payments so far. 7k miles on clock.
The 15k figure used to be justified as I drove a lot in my old job. As of January, I’ve changed career and am likely to be WFH permanently. Annual mileage could be as low as 5k. Car likely to sit on the drive all week unused, save for a few short journeys when lockdown lifts (luckily I got the petrol model).
Now considering having 3rd baby (already have two kids aged 1 and 2). Wife has a Mini Countryman; PCP runs out in May 2022 and costs £250 pcm.
Wife has suggested we now only need one car, a bigger car (think Q7) to accommodate a 3rd kid.
Any thoughts/advice?
Only made two payments so far. 7k miles on clock.
The 15k figure used to be justified as I drove a lot in my old job. As of January, I’ve changed career and am likely to be WFH permanently. Annual mileage could be as low as 5k. Car likely to sit on the drive all week unused, save for a few short journeys when lockdown lifts (luckily I got the petrol model).
Now considering having 3rd baby (already have two kids aged 1 and 2). Wife has a Mini Countryman; PCP runs out in May 2022 and costs £250 pcm.
Wife has suggested we now only need one car, a bigger car (think Q7) to accommodate a 3rd kid.
Any thoughts/advice?
And that's before any running costs. Wow.
RUSTILLDOWN said:
An expensive mistake...
3rd baby is way off. Wife now likely to want to keep her own car. Lockdown being relaxed soon, so don’t really see it as an expensive mistake anymore.AudiMan9000 said:
So in July 2020 I got a new Audi Q3 on PCP. Nil cash deposit. First 3 months free. £477 pcm x 45. 15k miles pa.
Only made two payments so far. 7k miles on clock.
The 15k figure used to be justified as I drove a lot in my old job. As of January, I’ve changed career and am likely to be WFH permanently. Annual mileage could be as low as 5k. Car likely to sit on the drive all week unused, save for a few short journeys when lockdown lifts (luckily I got the petrol model).
Now considering having 3rd baby (already have two kids aged 1 and 2). Wife has a Mini Countryman; PCP runs out in May 2022 and costs £250 pcm.
Wife has suggested we now only need one car, a bigger car (think Q7) to accommodate a 3rd kid.
Any thoughts/advice?
Only made two payments so far. 7k miles on clock.
The 15k figure used to be justified as I drove a lot in my old job. As of January, I’ve changed career and am likely to be WFH permanently. Annual mileage could be as low as 5k. Car likely to sit on the drive all week unused, save for a few short journeys when lockdown lifts (luckily I got the petrol model).
Now considering having 3rd baby (already have two kids aged 1 and 2). Wife has a Mini Countryman; PCP runs out in May 2022 and costs £250 pcm.
Wife has suggested we now only need one car, a bigger car (think Q7) to accommodate a 3rd kid.
Any thoughts/advice?
The first couple of years are the worst for being in negative equity but on a PCP with no deposit and a ballon, don’t be surprised if you are in negative equity for most of the term.
This is the reason I won’t be going for another PCP/Lease, my mileage is now well under 5k a year with part working from home so it’s not a cost effective way of having a car.
This is the reason I won’t be going for another PCP/Lease, my mileage is now well under 5k a year with part working from home so it’s not a cost effective way of having a car.
AudiMan9000 said:
No regret or desire to get rid early. Just curiosity. It seem a huge amount of negative equity to be in. But you’re right, I paid no deposit, only paid 3 x £477 in 7 months of ownership, and drove it 7.5k. I’m doing much less than the 15k miles pa my deal is based on. So hopefully my unnecessarily larger monthly payments will clear off the negative equity faster than commensurate payments otherwise would have.
Out of interest where did you think you’d be 7 months into a deal and having paid less than £1500? Genuinely interestedGassing Station | Car Buying | Top of Page | What's New | My Stuff