I think you have to be very, very, very stupid to hand a car back at the end of a PCP deal. Does anyone EVER do that?! Makes no sense since, as was said above, the balloon is always a lot less than what the car is worth, so it is always geared to allow you to have money as a deposit on the next car. .

I don't think you can EVER generalise like this. EVERYONE has different circumstances to contend with and just because you're in the fortunate position of being able to lay your mitts on eight grand does not mean others can.

It will also depend upon the use of the vehicle and how advantageous it is to roll it over into a newer one for business and tax reasons.

Nope - out of order there, Matey with the Monster, especially calling people "Stupid". Tsk Tsk - take a smacked wrist!

I don't think you can EVER generalise like this. EVERYONE has different circumstances to contend with and just because you're in the fortunate position of being able to lay your mitts on eight grand does not mean others can.

It will also depend upon the use of the vehicle and how advantageous it is to roll it over into a newer one for business and tax reasons.

Nope - out of order there, Matey with the Monster, especially calling people "Stupid". Tsk Tsk - take a smacked wrist!

 

No, I stand by what I said.  Apologies if it came across as arrogant or something.  Even if you don't have the eight grand and don't want to keep the car, you sell the car privately or to a dealer before the balloon comes up and then clear the PCP or let the dealer do so...  It is not rocket science and any second hand dealer will know how to do this.  This way you do not lose the equity in the car. So no I still can't see how anyone can remotely think it is a good idea to just hand a PCP car back.  

I suppose it could happen due to Bereavement?

I've just disposed of a friend of my father's car for his widow.

2001 vauxhall zafira with 46000 miles on it,went for £370.

(more than half a tank of petrol as well.)

No, I stand by what I said.  Apologies if it came across as arrogant or something.  Even if you don't have the eight grand and don't want to keep the car, you sell the car privately or to a dealer before the balloon comes up and then clear the PCP or let the dealer do so...  It is not rocket science and any second hand dealer will know how to do this.  This way you do not lose the equity in the car. So no I still can't see how anyone can remotely think it is a good idea to just hand a PCP car back.  

Nah nah nah - you're at it again, making sweeping generalisations!!

From a PERSONAL viewpoint the very thought of attempting a private sale (probably of a hi mileage car, too) fills me with fear and loathing. I would rather stick a cactus down my pants than try a private sale.

That's a "no!" then!!

Nah nah nah - you're at it again, making sweeping generalisations!!

From a PERSONAL viewpoint the very thought of attempting a private sale (probably of a hi mileage car, too) fills me with fear and loathing. I would rather stick a cactus down my pants than try a private sale.

That's a "no!" then!!

 

I agree George...  it can be seen as painting with a very wide brush indeed. But really any second hand dealer in the country will take a car with outstanding finance on it and pay that off and give you the change... You don't have to sell it privately. But if you really want to kiss thousands of pounds away, you can always just hand it back of course. 

Have to agree 100% with Johann on this one.

I traded in a Ford Ka in 2000 and it was worth no more than the PCP GMFV figure. The trade in cleared the finance but there was no equity. PCP is great for Yeti because of the strong residuals, some other manufacturers have been a little cynical in the past with getting those monthly payments down and leaving an optimistic GMFV.

I love a good debate, as long as it doesn't get personal and have found many an answer on this forum.

My personal circumstances mean that I like to change my vehicle about every 3 yrs normally using the value of any p/x and borrowing the remainder normally with a personal loan. Consequently, after looking at 3yr old Yeti's with average mileage in the spec I required, I found that I would have to spend around 16k. After noticing the 0% at the dealers, I found that I was able to use the value of my current car, a Octavia VRS, as the maximum deposit, make affordable monthly payments and then after 3 yrs, unless there is another 0% offer that is affordable at that time, purchase the car and keep it for another 3 yrs. This way I have the privilege of owning a brand new car( something I have never been able to afford before ) and then purchasing it, thus buying a vehicle that I know the full history of.

At the end of the day this is a deal that suits me and more importantly, my finances.

 But really any second hand dealer in the country will take a car with outstanding finance on it and pay that off and give you the change... You don't have to sell it privately. But if you really want to kiss thousands of pounds away, you can always just hand it back of course. 

And of course, it all depends upon the original deal that was struck, and the original balloon that was decided upon at the outset.

 

Over the years we have financed many of our practice vehicles by this sort of scheme, and depending upon circumstances - milage, financial climate, ease of selling cars, cash-flow - we could set the monthly repayments to suit our needs, and the dealers needs too.  If cars were being sticky and difficult to sell, the deal we were able to negotiate was more favourable.

 

Eventually the final payment was a factor of many many things, and it is because of that imprecision I feel that one cannot ever generalise and denounce at a stroke anyone whose circumstances do not match your own, Johann, or yours, Truthie with your experience in the motor trade, which is far greater than mine can ever be.

 

Oddly, actually, Johann and Truthseeker, we are actually all on the same page vis-a-vis the concept of dealing with the final balloon, and I would agree absolutely that if your balloon is set at, frankly, an artificially low (equals 'safe') figure, since depreciation is an imprecise art at best, your options would definitely point towards getting a private sale in order to maximise your 'gains'.  For that to be done one would need to be motivated to endure the hassle (personal opinion, note) and one would need to have a situation where the residual was set way below the eventual potential value of the car - again, NOT a universal position to be in.

Another misconception is that some people think they are tying themselves to a brand with a pcp. Not so. At the end of the Skoda pcp, you can go to any dealer selling any make of car (Ford or BMW etc) and roll the equity into any deal.

Now whether I would get offered more for my Blackline at a Skoda dealer after 3 years rather than another brand dealer is the bigger question..........?

Oh, and just to echo a point raised earlier.....

At the end of my pcp, I'll owe £8500. Where would I be able to buy a car like my Blackline, in the condition it will be in (loved) with the mileage (about 30k) and also knowing the full history for that figure?

Nowhere!

Or, you could take out a personal loan to pay off the PCP, then you are free to keep or sell privately. I do agree that not everyone is in a financial position to stump up a large sum at the end of the agreement, but the payments should be less on a new loan to cover the balloon figure, than those on the original agreement.

 

As an example, I recently agreed a bank loan to repay a PCP final payment, as I had already pre sold the car for a much greater sum than the final figure. I then immediately repaid the loan with no penalty fees and without even making a single payment. The reason being that Banks etc, have to give a cooling off period (10 days with my bank). Job done!