Car Finance - Advice!

[kezzmcc]

Hi guys,

I recently got a Mercedes Benz A180 5dr Sport 66 reg (2016/2017) 13,500 miles on finance (PCP) for 4 years.

My payments are £291 a month and just got a settlement figure from the finance company for £16,300.

My first payment is due to come out next week but partner has had to come out of week for a few weeks due to personal reasons where she will be on SSP.

Ive had a look at autotrader etc and the settlement figure is pretty much what the car is going for, if not a little bit more.

I was wondering, I’m based in North West, England - is there anyway I could downgrade the car to something cheaper for myself? I got the car from Arnold Clark (some people love some loath, no arguing/comment about it please.)

If the value of the car is looking like the same as settlement then is it not possible I could finance with another company whereby they take over the finance as it should be paid off?

Any advice would help.

Thanks,

Edited by kezzmcc on Thursday 5th April 08:52

[cuprabob]

What you have to remember is the prices "they are going for" are retail prices and a dealer will more than likely offer a trade price which will likely be a couple of grand less. You can get an idea of the trade price by putting the details into WBAC or Evan Halshaw.

[kezzmcc]

Hi,

Just used WBAC and they valued at £14,100.

Thanks.

[Integroo]

kezzmcc said:

Hi,

Just used WBAC and they valued at £14,100.

Thanks.

You might get 500 quid more in a trade in. You're not going to get 16300 though.

[IanCress]

If your partner is only out of work for a few weeks, then surely you're only losing 1 months worth of payments. Do you not have a spare £300 to tide you over?

Selling this car after 1 month of ownership is going to cost you way more than £300.

[kezzmcc]

Hi,

I’m more than likely going to keep the car but was
Curious as to what options there could be further down the road.

Thanks

[JordanM200]

How much deposit did you stick down when buying it?

[kezzmcc]

Hi Jordan,

I put £100 down cash and part ex my old car which was valued at £1700.

Thanks!

[JordanM200]

£14k sounds a bit of a piss take if I'm being honest, considering you must have bought the car for circa £18k last month! Have you done an Autotrader online valuation, will give you a ballpark trade figure and private figure.

[kezzmcc]

Based on autotrader ‘good condition’ which it is they say £15,500.

Looking at age,condition and mileage, cheapest on autotrader is 17k

[Monkeylegend]

kezzmcc said:

Hi,

Curious as to what options there could be further down the road.

Thanks

Were these not explained to you before you signed on the dotted line?

[kezzmcc]

Not really, only option that we’re mentioned were that coming into last year or so you could look into getting a new one, I do put blame on myself for not asking too many questions.

[JordanM200]

The options are you can trade it in at any point, providing the settlement is cleared. You have the settlement figure, so it's just a case of seeing what you can get for the car really.

[Wooda80]

From what has been written it appears that you paid around £18000 for the car ( £16300 settlement + £100 cash + £1700 px ), and you are now looking at a potential trade in of between £16300 ( your figures ) or £14100 ( WBAC figure ) .

Either way that's a big drop to take for a month's motoring.

If the car is going to be permanently surplus to requirements or if you are now uncomfortable with the monthly payment then you should take the drop now as it is unlikely to get much smaller in the near future. It seems like this might involve you having to pay off a small amount of negative equity.

If it's only a temporary situation or if you now think that you might prefer a different car in the future then you want to consider keeping the car for a few months and seeing how things pan out.

Bear in mind if you do change the car you will either end up realising the loss or rolling it into the deal on the new car which only really kicks the problem further into the future. Fine to do that providing you realised that you havent solved the problem, just delayed it.

Good luck with whatever you decide to do!

[JordanM200]

Wooda80 said:

you should take the drop now as it is unlikely to get much smaller in the near future.

Exactly this! I think it's presumed that the first month will be loads of neg equity, yet a year later won't be so bad, yet this isn't the case. In time, yes the settlement will drop, but the value of the car (especially being nearly new) will drop even more.

In my experience, selling now or a years time, the neg quity won't be much different, if at all.

[scotnoob]

Negative equity tends to get a worse in the first year, then very slightly better a year after than. 3rd and 4th years it should improve even more.

I checked a month after I bought the car and was 3k down. After a year I am more like 4-4.5k down!

[alorotom]

How long ago did you sign for it?? Are you still in the cooling period??

Sounds more like buyers remorse tbh as a few weeks on SSP shouldn’t be an issue

[kezzmcc]

Hi,

A month ago today it was bought, I’ve read through my contract and there isn’t any ‘cooling period’ I can see.

I don’t have remorse as it’s a lovely car, just a bit on the expensive side and it was more for long term what could my options be, thanks for all your comments anyway guys!

[cuprabob]

kezzmcc said:

Hi,
A month ago today it was bought, I’ve read through my contract and there isn’t any ‘cooling period’ I can see.

I believe the statutory cooling off period is 14 days on finance agreements.

[RRLover]

cuprabob said:

I believe the statutory cooling off period is 14 days on finance agreements.

However you still own the car & must be able to fund the balance to the finance company.