PCP Deals and Equity

[Matt17121991]

Not sure whether anybody would have finished up the contract on a PCP deal on their Rapid yet as they have only been about 2/3 years now, but worth an ask.

 

Has anyone ever ended up with much positive equity after these kind of deals? Or does it mostly work in the favour of the dealers...

 

I know its probably going to depend on a lot of factors - mileage, contract term etc.so it will vary a lot! But just interested to know.  

[camelspyyder]

Auto express initially gave the car a retained value figure after 3 years of 40%

 

The PCP's I was offered at Skoda and SEAT last month seemed to have a GFV of somewhat less than that, which would mean yes, as long as it was inside the mileage and immaculate, there would be a little equity left in it.  I think it's clear that is done on purpose to hook you into another PCP.

[Matt17121991]

Auto express initially gave the car a retained value figure after 3 years of 40%

 

The PCP's I was offered at Skoda and SEAT last month seemed to have a GFV of somewhat less than that, which would mean yes, as long as it was inside the mileage and immaculate, there would be a little equity left in it.  I think it's clear that is done on purpose to hook you into another PCP.

 

 

I wont be doing another PCP with Skoda that's for sure! Especially with the model range at the moment and what other competitors can offer engine wise for same size car! Not to mention the aftersales....

[RapidPaul]

Auto express initially gave the car a retained value figure after 3 years of 40%

 

The PCP's I was offered at Skoda and SEAT last month seemed to have a GFV of somewhat less than that, which would mean yes, as long as it was inside the mileage and immaculate, there would be a little equity left in it.  I think it's clear that is done on purpose to hook you into another PCP.

 

I guess most buyers will overestimate their mileage when negotiating a PCP too, so as not to get caught out with excess mileage charges (even though they are usually quite low). That would give the impression of equity at the end of the deal.

 

In reality, if you end up with a significant amount of equity at the end of a deal, it's because you've either:

1) done amazingly well and beaten the system; 

2) effectively overpaid on the monthly payment versus actual depreciation; or

3) both of the above.

Given that car finance companies rarely go out of business, it's not hard to tell which of the two scenarios is more likely!

[skoda1982]

I have pcps of 1 to 2 years and always get a 5000 mile pcp so cheaper payments even though i do 10000 miles in a year. The mileage excess is only charged if you give the car back at the end and walk away. Normally at the end of the pcp you have enough equity to put a deposit for another new one.

[Stormchaser]

Mines 0% and zero deposit over 42 months at an eye watering £242 pm with 20K miles per year. The car was a rip off price of £14780 :(

But I'm surrendering at 50% which is next July thank god.

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[skoda1982]

Mine is 0% 42 month £278 pm £16800.                 negative equity added off last car

[camelspyyder]

How much????   Jesus!!!

 

Everyone on here says "Banks don't do 0%." "Dealer financing is better" etc etc.

 

Well - even with 3 years interest at 4% my payback total is only £14000 over 36 payments.

 

and @Stormchaser - Why the 20k miles agreement? shouldn't that have been nearer 5k miles a year.

 

Even before it went wrong you weren't exactly clocking up the miles on it?

[Matt17121991]

I thought £226 was too much on a Rapid Sport each month.....

[Matt17121991]

Mines 0% and zero deposit over 42 months at an eye watering £242 pm with 20K miles per year. The car was a rip off price of £14780 :(

But I'm surrendering at 50% which is next July thank god.

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Surrendering? Just giving the car back half way through, I wouldn't mind doing this... by doing this does it harm your credit score?

Edited 15 July, 2015 by Matt17121991

[Stormchaser]

No it doesn't that's why I'm doing it. If you look on VWFS website anyone can do it.

It comes under the "Not for you" title. It will be the best thing I will do to get out of this.

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[Matt17121991]

No it doesn't that's why I'm doing it. If you look on VWFS website anyone can do it.

It comes under the "Not for you" title. It will be the best thing I will do to get out of this.

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That's good to know! Although I cant see where it says this on VWFS website.

[Stormchaser]

I'll get a screenshot later.

EDIT:

They've all updated there websites and has a different layout with all the old things removed. Typical.

It's in the contact that it can be returned(subject to the Fair Wear & Tear guide). It's also within your rights to return it under the Sale of Goods too. I studied this in depth when I was rejecting it.

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[camelspyyder]

Are you not rejecting it now because the fault has re-occurred?

[mu7]

On the ending PCP early point, it's just a hire purchase agreement. You have specific rights under statute (so it doesn't matter what the contract says, unless it improves your position.) The important bits are...

 

99 Right to terminate hire-purchase etc. agreements.

 

(1)At any time before the final payment by the debtor under a regulated hire-purchase or regulated conditional sale agreement falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement.

 

100 Liability of debtor on termination of hire-purchase etc. agreement.

 

(1)Where a regulated hire-purchase or regulated conditional sale agreement is terminated under section 99 the debtor shall be liable, unless the agreement provides for a smaller payment, or does not provide for any payment, to pay to the creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination.

 

(4)If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.

 

 

http://www.legislation.gov.uk/ukpga/1974/39/section/99

http://www.legislation.gov.uk/ukpga/1974/39/section/100

 

An entry on your credit record should just show "settled", the same as if you bought the car outright with an early repayment. The final payment counts towards the 50%, so it's not enough just to hit say 18 out of 36 months.

[bluecar1]

if you walk away at 50% through does it affect VWFS's score for you in the future? i.e. will it count against you if you want another VAG stable car on PCP?

 

may not affect your credit score but will a maker be put against you on VWFS's system?

[Stormchaser]

Are you not rejecting it now because the fault has re-occurred?

I don't think I can go through all that again over the next umpteen months. I'm just going to throw it back at the halfway mark.

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[mu7]

How much????   Jesus!!!

 

Everyone on here says "Banks don't do 0%." "Dealer financing is better" etc etc.

 

Well - even with 3 years interest at 4% my payback total is only £14000 over 36 payments.

 

and @Stormchaser - Why the 20k miles agreement? shouldn't that have been nearer 5k miles a year.

 

Even before it went wrong you weren't exactly clocking up the miles on it?

 

 

I don't think I can go through all that again over the next umpteen months. I'm just going to throw it back at the halfway mark.

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The banks also won't let you dump a dodgy car on them and walk away

 

Silver lining.

[camelspyyder]

The banks also won't let you dump a dodgy car on them and walk away

 

Silver lining.

 

True -  you have to sell it to a mug instead 

 

And just once in my life - the mug was a car dealer

Edited 15 July, 2015 by camelspyyder

[picnmix]

Interesting thread this. Everyone should know about this.  It's interesting that the finance industry lobbied hard to get this removed from the recent revisions to the consumer credit act but fortunately it survived by the skin of its teeth.  It's a great consumer protection if one has been sold a lemon, been ripped off with the deal or are in financial difficulty. The statue is hard work to read but this web page breaks it down very well : http://www.legalbeagles.info/forums/showthread.php?34548-Voluntary-Termination-of-a-Hire-purchase-or-conditional-loan-under-the-CCA-1974

[Stormchaser]

The banks also won't let you dump a dodgy car on them and walk away

Silver lining.

It's got nothing to do with the bank. It's a VWFS car and they own it. Yes it's dodgy but I was sold a lemon and therefore I have the right to return it. It needs to be in the dealers hands before I start that agro again.

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[mu7]

It's got nothing to do with the bank. It's a VWFS car and they own it. Yes it's dodgy but I was sold a lemon and therefore I have the right to return it. It needs to be in the dealers hands before I start that agro again.

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That's my point, you'd be in a worse position, not having the option to walk away, had you used alternative finance.

[Stormchaser]

I nearly did. It could've been a whole lot worse. I'm gathering evidence so I'll wait for its first service in September then go down that road again.

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[Matt17121991]

No it doesn't that's why I'm doing it. If you look on VWFS website anyone can do it.

It comes under the "Not for you" title. It will be the best thing I will do to get out of this.

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Can you do this half way through the finance deal? Like mine is 42 months, so after 21 months payments? Or is it 50% of the total finance outstanding?

[Stormchaser]

Its 21 months. Half of your contract you signed for. I can't wait for the day to come.

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Edit:

I've just been speaking to Skoda Finance and its 50% of the total amount. He told me I'm 20 months away from being able to surrender it :(

I still owe £12350!

It's nowhere near worth that.

My contract is 42 months.