Negative Equity - Experiences on dealing with this
Discussion
Hi All
Need some advice here. I’m thinking of ending my pcp deal 1.5 years earlier than intended (I’ve had car since new and 2.5 yrs in ) - It’s a 4 year term. . Long story short is that I really and have always disliked the car (it’s a Nissan Xtrail e.power) and bought it for the space . When I’ve taken pcp loans out before, I used to do it through BMW FS and always took out 3 or 4 yr terms and simply handed the car back and upgraded . However a few years back I decided to go for a Xtrail as an equivalent X3 with a similar spec was £58k whereas this way cheaper at £43k.
However I’m £4k in negative equity. I’ve never been in this situation before. If I go for another brand new car I.e Volvo or bmw , would dealerships be kind enough to wipe out the negative equity or will they add it to my agreement. What is the best way to tackle this? Let me know from experiences.
Regards
BH
Need some advice here. I’m thinking of ending my pcp deal 1.5 years earlier than intended (I’ve had car since new and 2.5 yrs in ) - It’s a 4 year term. . Long story short is that I really and have always disliked the car (it’s a Nissan Xtrail e.power) and bought it for the space . When I’ve taken pcp loans out before, I used to do it through BMW FS and always took out 3 or 4 yr terms and simply handed the car back and upgraded . However a few years back I decided to go for a Xtrail as an equivalent X3 with a similar spec was £58k whereas this way cheaper at £43k.
However I’m £4k in negative equity. I’ve never been in this situation before. If I go for another brand new car I.e Volvo or bmw , would dealerships be kind enough to wipe out the negative equity or will they add it to my agreement. What is the best way to tackle this? Let me know from experiences.
Regards
BH
How do you know you're in NE? Have you punted the cars around the trade to find out or is that just the part ex price? No garage will be "kind enough to pay that for you" what they will do is structure a deal that means you continue to pay it with interest on top, rolled into the new deal.
My advice is to get off the PCP merry-go-round.
Wills2 said:
How do you know you're in NE? Have you punted the cars around the trade to find out or is that just the part ex price? No garage will be "kind enough to pay that for you" what they will do is structure a deal that means you continue to pay it with interest on top, rolled into the new deal.
My advice is to get off the PCP merry-go-round.
This. My advice is to get off the PCP merry-go-round.
Rolling the negative equity into a new deal simply makes the whole situation worse. Then you’ll be lumped with the old negative equity, the new depreciation and then you’ll have to do it again and again.
Easier to fork out 4k now than 8k or more in two years.
My advice right now would be to find the 4k now stay put and hope it catches up by the end of the term / hand it back.
If you've paid over 50% of the PCP figure you can VT it - Voluntary Termination. I did this with my SQ5 last year. Soon as you are over the magic 50% you can hand it back and my SQ5 was £4k in negative equity at the time. This was despite me buying it saying I would do 20k miles a year and apparently the high mileage (which was exactly where the agreement allowed it to be when returned, so no excess mileage) was the reason for it! Just call up and ask where you are up to and they will say which month you are eligible to VT it. It might not be yet but I returned mine bang on year 3 out of a 4 year PCP. It didn't affect my credit score either. I did enquire about trading in for a newer Audi at the time and even then the main dealer salesperson advised me to VT it otherwise I would be worse off. Hope this helps.
Edited by AddyT. on Sunday 3rd May 20:47
James_33 said:
Usually 50% of value of the car when the agreement was taken out isn't it in which case he's nowhere near that figure yet?
Stand to be corrected
We must have posted at pretty much the same time! Stand to be corrected
It depends on how much deposit the OP put down and what the monthly payments are. VT's tend to come in to play around year 3 out of 4 on a PCP. Not everyone of course but seems to be generally the way after speaking with others about them. AddyT. said:
We must have posted at pretty much the same time! It depends on how much deposit the OP put down and what the monthly payments are. VT's tend to come in to play around year 3 out of 4 on a PCP. Not everyone of course but seems to be generally the way after speaking with others about them.
It's dependent what the Optional Final Payment (GFV) is. That's usually a bit less than half the total amount payable so you reach the point where you've paid half of the total amount payable pretty close to the end of term - likely around 42 months for a 48mth agreement. It depends on how much deposit the OP put down and what the monthly payments are. VT's tend to come in to play around year 3 out of 4 on a PCP. Not everyone of course but seems to be generally the way after speaking with others about them. OP is talking about £40-£60Kcars - £4K isn't a massive deal, if he hates the car.
bmwhaz said:
Hi All
Need some advice here. I m thinking of ending my pcp deal 1.5 years earlier than intended (I ve had car since new and 2.5 yrs in ) - It s a 4 year term. . Long story short is that I really and have always disliked the car (it s a Nissan Xtrail e.power) and bought it for the space . When I ve taken pcp loans out before, I used to do it through BMW FS and always took out 3 or 4 yr terms and simply handed the car back and upgraded . However a few years back I decided to go for a Xtrail as an equivalent X3 with a similar spec was £58k whereas this way cheaper at £43k.
However I m £4k in negative equity. I ve never been in this situation before. If I go for another brand new car I.e Volvo or bmw , would dealerships be kind enough to wipe out the negative equity or will they add it to my agreement. What is the best way to tackle this? Let me know from experiences.
Regards
BH
You say that you've had previous PCP's where you've handed the cars back, which means that you've either broken even or had negative equity on those previous cars, as it would be unusual to give away positive equity by unnecessarily handing the cars back.Need some advice here. I m thinking of ending my pcp deal 1.5 years earlier than intended (I ve had car since new and 2.5 yrs in ) - It s a 4 year term. . Long story short is that I really and have always disliked the car (it s a Nissan Xtrail e.power) and bought it for the space . When I ve taken pcp loans out before, I used to do it through BMW FS and always took out 3 or 4 yr terms and simply handed the car back and upgraded . However a few years back I decided to go for a Xtrail as an equivalent X3 with a similar spec was £58k whereas this way cheaper at £43k.
However I m £4k in negative equity. I ve never been in this situation before. If I go for another brand new car I.e Volvo or bmw , would dealerships be kind enough to wipe out the negative equity or will they add it to my agreement. What is the best way to tackle this? Let me know from experiences.
Regards
BH
PCP deals are fine if you run them to term, but when you decide you don't like it mid term it's always going to cost you (generally) and that's fine as you have to pay to play, however if the 4k is money you don't have then think long and hard about rolling it over because you really will be locked in to the next one, "chasing your losses" could turn 4k into 10k neg really easily.
Ghs said:
Have you tried different dealers ? When I p/xd my
Last pcp vechicle I had some dealers saying I was in negative equity, others saying theyd clear the pcp , and the dealer I finally brought from cleared the pcp & gave me a few thousand to put down as the deposit on the next vechicle .
I don’t think the OP has tried any dealers, but you like you say, there’s a range of options that any dealer can offer. The precise details will vary a bit from dealer to dealer.Last pcp vechicle I had some dealers saying I was in negative equity, others saying theyd clear the pcp , and the dealer I finally brought from cleared the pcp & gave me a few thousand to put down as the deposit on the next vechicle .
Any car sales person will likely wet themselves to have someone in front of them who needs a lot of finance. It’s important the OP keeps his wits about him and looks at the overall cost of the deal.
Sheepshanks said:
I don t think the OP has tried any dealers, but you like you say, there s a range of options that any dealer can offer. The precise details will vary a bit from dealer to dealer.
Any car sales person will likely wet themselves to have someone in front of them who needs a lot of finance. It s important the OP keeps his wits about him and looks at the overall cost of the deal.
Definitely. Any car sales person will likely wet themselves to have someone in front of them who needs a lot of finance. It s important the OP keeps his wits about him and looks at the overall cost of the deal.
Getting to VT with neutral cost to exit should be the first aim.
Irrespective of any negotiation ability adding any negative equity to the new deal makes zero sense.
£4k would wipe out any discount obtainable whether by finance contribution or whatever.
Irrespective just ensure you pick the right car for you going forward as don’t want to repeat the current issue !
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