When we ordered our new Sokda the salesman said he would contact us when the car is out of negative equity with the view to getting us a new deal and new car.

 

Is this sales spiel or is there a calculation to work out negative equity on a PCP car?

 

Thanks

My understanding is it is to do with how much of the sales value of the car has been paid off compared to what the car is worth.

 

I'll use my figures as I know them.

Retail price of the car: £26,500

Guaranteed future value: ~£9,000 (after 41 months)

Deposit: £4000

Monthly payment: £330.

Approximate value of the car now £16,000 (as an example)

 

I'm 22 months in, so have paid in total £4000 + £300*22 = £10,600. As £26,500 - £10,600 = £15,900 I am £100 in positive equity assuming my car is worth £16,000.

 

If my car was worth £14,000, I'd still be in negative equity of £1,900.

 

I hope that is understandable!

Edited 22 January, 201610 yr by meb90

16k at 22 months may be a little optimistic.

Best way to find out where you are is get a valuation from We Buy Any Car or similar, and a settlement figure from VWFS.

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Thanks Matt & Andy, the dealer gave me a guaranteed future value of £11,400 after 42 months, seems to be a big price difference in resale values for cars up and down the country. When I was looking to be a used VRS I was tempted to drive to Crewe as the car they had was the same spec as a car I had seen down south but £1,400 cheaper and with a few less miles.

 

However a 0% new car worked out cheaper that getting a personal loan on a used car although I will not own the PCP car but intend to buy the car outright at the end of the term.

 

Roll on March when new car is mine!

 

Ooooh another question, am I right in thinking that when the new car is delivered to the main dealer I have the option of selecting from a list the number plate?

 

Can you tell I have never had a new car before

 

Thanks Chaps

Some dealers let you choose, some just allocate.

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Regarding the number plate, dealers tend to obtain them in batches, for each batch the prefix is usually same, and they will have a selection of letter endings so you can only pick what is left (as the batch gets smaller, get left with ones no-one else wants)

The alternative is to goto DVLA site (or independent reg site) and buy a particular combination of letters (eg your initials), probably cost you £150-200 This produces a certificate with your chosen reg, and you get dealer to use it.

There are some other options that can be set up by dealer before collection (there is a thread for this) where you choose things like all door unlocking or just drivers door on first click. If you don't request specific things, will just get the default that factory use as sales staff tend not to spend time asking you your preferences.

My 63 plate Octavia Elegance 150 TDI with 29.5k miles and generally immaculate is worth less than £13k and its not yet 2 years old.

£11.4k for a vRS after 42 months is ambitious....all the GFV helps with is a lower monthly cost....which to be fair if you plan on keeping the car to the end of term and handing back its no biggy really.

In short if you dont put down much of a deposit (i.e a few hundred quid) you'll find yourself in a few K's worth of neg equity which should soften, but supect not entirely correct itself towards the end of the term. 2 years in, I am circa £3.5k in neg equity....it was £4k not so long back so has improved a smidge.

16k at 22 months may be a little optimistic.

Best way to find out where you are is get a valuation from We Buy Any Car or similar, and a settlement figure from VWFS.

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Agreed it is probably optimistic, certainly top end of the market, but I was just using the value as an example. I've got no plans to swap mine in early so it doesn't worry me at the moment. I've got a feeling the car will be worth less than the GFV after 41 months, but that's not my issue

 

Just for fun, I might enquire what the settlement figure is!

Edited 22 January, 201610 yr by meb90

Its difficult to predict and budget for. I started the ball rolling looking at new cars based on a valuation of my current car at the beginning of december, at the time it was around £13k. When it come to trading it in this week it was down to £12.1k. Not impressed and a bit shocked but thats where Ive ended up!

With PCP or PCH I think you can hand the car back once you have paid 50% of the value back. Thus if you can find a better deal and have no equity in the car at this point you might as well swap.

With PCP or PCH I think you can hand the car back once you have paid 50% of the value back. Thus if you can find a better deal and have no equity in the car at this point you might as well swap.

Worth noting that this is 50% of total borrowed finance including the baloon and not 50% of the total committed monthly payments.

With low deposits (which is typically what PCP is all about) the halfway point does not usually arise until towards the end of the agreed term.

It is actually 50% of the total agreement, so the purchase price. Therefore your deposit counts towards the 50%.

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