PCP - keep going 'til the end or VT now?

[fronty]

Hey all,

I've had my Q7 since Oct 2017 on a 3 year PCP, I'm now at the stage where I've reached 50% and can VT for no fee (barring any excess mileage and remedial work required).

But I just need some help running through this.

If I want to keep the car then obviously I have to keep paying the monthlies and the balloon payment of £30.5K due in October this year. £30.5K actually seems quite reasonable when I look up 3 year Q7's on Autotrader with a similar spec. But I don't really want to have to find 30K and would rather get a cheap runaround for a bit (so I can use the cash I'd save to pay for a decent holiday!).

I've already decided I DO NOT want to roll onto a new contract, so already that means I'll walk away at the end of this deal. So is it really worth me continuing to pay the monthly fee for another 9 months - it feels to me that all I will be doing is building up some equity to roll forward into a new deal, and I will lose that equity if I walk away in October.

So it seems like the sensible thing to do is to VT now and save myself 9 months of payments.

What's the general consensus with PCP? This is my first contract so not sure what people usually do.

[Andymcdonald]

Do you like the car? If not and you can VT. do it?

If you like the car and you can afford the pay the 9 months and hand it back as I understand it you’d get a cheque for any delta owed to you. This is certainly what happened to my wife on her gold some time ago.

I’d speak to VW and ask what happens with any residual monies following the natural conclusion of the agreement and take it from there.

Good luck


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[fronty]

as I understand it you’d get a cheque for any delta owed to you. This is certainly what happened to my wife on her gold some time ago.

Oh really? I thought you forfeited any equity if you walked away at the end of the contract - I'll have to find out because I don't want to be leaving any cash on the table.

[ragebe]

PCP finance explained: Where to get the best deals – MSE

And have a read of the forum comments on that site. Relevant to all PCP cars.

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[Andymcdonald]

Oh really? I thought you forfeited any equity if you walked away at the end of the contract - I'll have to find out because I don't want to be leaving any cash on the table.

For clarification. My wife ran the agreement to the end and received a few grand back following the agreement conclusion and I guess it being sold to the dealer network?

As I say I would ask that before making a call.


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[fronty]

Hmmm, this from the MSE PCP page:

"Usually at the end of a PCP deal, the car will be worth slightly more than the balloon payment. And if this is the case, your dealer will usually ask if you want to use that 'equity' as a deposit on a new PCP deal on a brand new car. For example, if the car’s actual value at the end of the deal in the example above was £9,000 and the balloon payment is £8,000, you’d have the difference of £1,000 that you could use as a deposit to roll into another deal.

Usually people go for another PCP, but you don’t have to. Sadly, you can't take the extra as cash - unless you buy the car and then sell privately (or get agreement from the finance company to sell it & then pay off the finance)!

You don’t have to worry about the car being worth less than the balloon payment - that is if it's lost more value than was expected at the start of the deal. If that happens, the sensible course is just to hand the car back - the finance company takes the hit."

[Nemo78]

Fronty I’m going to keep an eye on this as we will be entering a PCP very soon (first time) so some real valid questions in my head that you’ve asked

[fronty]

Ok I just called them, ran through various scenarios, if I hand the car back and walk away I do not get any equity refunded, the only way to get it is to buy the car off them and then try and sell it for more than the balloon payment. But trying to sell a big diesel like this privately for £35K sounds like a nightmare. If I p/x it then I probably won't get my money back. He said I can sell it now if I wanted, but would have to pay a settlement figure of £36,146 on sale, they would then release the charge on the vehicle, but in order to make this worthwhile I'd have to try and sell it for 40K'ish, that is a tall ask. It all sounds like a lot of hassle and a risk. So at the moment it does feel like a VT would be my best option.

[fronty]

It has been a bloody awesome car though, I mean just look at it, an absolute beast! I'll be sorry to see it go but I have other priorities vying for my cash right now...

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[andyhud007]

It has been a bloody awesome car though, I mean just look at it, an absolute beast! I'll be sorry to see it go but I have other priorities vying for my cash right now...

20190706_150918.jpg

Mate its lovely!!!

I was in the same dilemma a few months ago. I had a PCP and was due up in April 2020, however I decided to just buy the car outright and pay the outstanding balance. I did it early instead of waiting till April as I saved myself a bit on the interest on the payments I would have been making till April 2020. But this was my conscious decision to keep the car. I've spent a lot on it, I love it, and if I wanted the same spec in a new car I wouldn't want to pay that price tag.

No idea if I've done the right thing, but its too late now. I've done it.

A