Anybody Actually Got Any PCP Equity?

[AllanDJ]

I know that the Octavia is a car that has depreciated badly but I did kind of hope that as my PCP deal got closer to the end of the 3.5 year term early next year that there might actually be a tiny bit of equity in it. Out of interest I asked the question today at a local dealership what my car would be worth if I traded it in later on this year against the deposit on a PCH deal on a new Superb Estate. Answer, in negative equity around a £1000 and this won't improve much as I pay the last 9 payments, with the prediction that the car will never have any equity in it at all as the dealers would depreciate the car by roughly the same amount per month as I am currently paying for it. The car has only done 23,000 miles to date and is in excellent condition but when you look online you can buy virtually brand new examples of the same model on a 65 plate with around 10,000 miles on them for about £8000 less than list price, i.e. around £15,000 from Motorpoint. 

 

I have mentioned elsewhere on this forum that when I bought this car from Henry's in Glasgow that the salesman was adamant that there would be up to £2000 equity in the car at the end of the PCP deal which convinced me to to take that option rather than PCH which would have been cheaper.

 

Obvious lesson never, ever trust a salesman here, followed by never buy a new Octavia at anything like UK RRP prices, the nearly new cars on offer are a far better option. It seems surprising how inexpensive these cars are brand new in Australia, compared to European prices, considering the distance the cars have to be transported from the factory. I think someone on here mentioned something like £12,500 for a 1.4 Tsi Estate car? It kind of looks like European versions of the Octavia are somewhat overpriced from the start, something which severe oversupply on the secondhand market has wiped out completely any equity there might have been at the end of these PCP deals

 

I'm only left with two options with this car, buy it at end of PCP and run it for years to get my money out of it or hand back a mint, low mileage car to Skoda and get nothing at all for it. Which isn't to say that the car isn't worth more than what the dealers would offer for it but they will want to resell the car for roughly the amount I could buy it at end of deal, which is roughly £9300, selling the car privately might be a struggle given the large numbers of these cars which will hit the second hand market from this autumn onwards.

[SC03OTT]

No idea but I suspect no. Only two years into a three and half year deal though. No plans to change until right at the end of the PCP but even then I won't stress over it. It's the risk you take when using PCP.

[Dodgy]

It's just long term car rental, I just accept that a few hundred quid a month is the cost of having access to a car that I don't have to do any work on.

 

Once you accept this mindset, the world becomes a better place

[SimonD316]

You could look at a VT but that would leave you with no equity, but may allow you to hand back earlier.

 

Quite a few people on here have mentioned that Skoda do loyalty offers for existing customers. A quick google suggests this changes like the finance deals, but late last year was an extra £1000 on the Octavia. It may be worth asking about this?

[Neily03]

My vRS is now just over 2.5 years old and i've already got 17k excess miles on it( should be 45k in November but it's already on 55k......long story) and just done a deal with my local dealer to just take and clear the finance which considering the mileage situation on it I'm very happy.  The new one should be here in a week or so.

 

So surely if you're within the mileage you state at the start of the agreement you should have some equity??

Edited 30 June, 2016 by Neily03

[MorrisOx]

It's just long term car rental, I just accept that a few hundred quid a month is the cost of having access to a car that I don't have to do any work on.

 

Once you accept this mindset, the world becomes a better place

Second that, but it all depends on the individual deal in the end. I'm operating on the basis that if I'll probably have to find another deposit in a couple of years when my PCP expires, which is something I can plan for. If I'm ahead of the game, fine, but I donlt think it wuld be by much. I'm guessing that any deficit depends on whether I'm rolling over into a new PCP or walking away.

[glosrich]

I'm seriously considering PCH for my next car, its cheaper, low deposit, just hand it back at the end and chose another one, or buy something used if you cant afford it at that point.

 

I doubt I'll have much equity at the end of my PCP, despite low mileage and the car is well kept. My £2k deposit long gone.....

 

The dealer I bought from might offer me £500-£1000 I suppose depending what I want to buy, but that will be with the new car at list price no doubt.

[Neily03]

I'm seriously considering PCH for my next car,

 

Exactly what I've done.  Not even had to put down a deposit, other than £500 for the dealer to order the car which I get back on the day I collect it.

[threadbear]

I have a Polo on PCP that I have become dienchanted with due to reliability issues early on in ownership and made all the worse having traded in a perfect good Fabia estate which was quite a significant deposit.

 

I have spoken to a Skoda dealer who says that my Polo will be out of negative equity by September. Fortunately because of the low repayments I have been able to save some money which will go towards another nearly new car which I will purchase on a good old fashioned bank loan with the aim of paying off in 3 years then keeping the car for a few more after that.  

[silver1011]

It's just long term car rental, I just accept that a few hundred quid a month is the cost of having access to a car that I don't have to do any work on.

 

Once you accept this mindset, the world becomes a better place

 

+1.

 

PCH is the future.

 

£2,500 deposit, £100 per month, 23 months, 8,000 miles per year for a 150PS manual Scout.

 

Total over the 2 years is £4,800, less than a brand new one would depreciate (even after potential aggressive discounts).

[spacenase]

Someone on another thread said that if there is equity left in your car at the end of the term, you've been paying too much for it and the finance company leave you to get your own money back. Arguably if the GFV is higher than the actual worth of the car, you're a winner because overall you've paid less than it's worth (especially on 0% finance).

 

I think if you are financing a car, get some PCP figures and some PCH figures and go for the cheaper one then save up your next deposit independently.

[themanwithnoaim]

Car deals aren't the place to earn money,investments are

Nuff said?

[themanwithnoaim]

The only advantage a PCP has over a PCH is the VT option, which due to supermarket car park ****s mine will be doing.

[AllanDJ]

"£2,500 deposit, £100 per month, 23 months, 8,000 miles per year for a 150PS manual Scout."

 

Some deal I put down something similar in cash as a deposit on the Octavia but my deal costs me nearly three times as much as yours per month! Definitely ripped off by the garage, I think my Octavia will be handed back to Skoda as soon as I can terminate the agreement which is about September/ October. One very expensive car rental, plus I had to put two new tyres on it the other week too as the original Dunlop Sport tyres which had been on the front (and then rear since service last year) were completely worn out at just under 23000 miles, not very good lifespan for a tyre really and I'm not a particularly fast or sporty driver either, the 1.6TD doesn't exactly encourage sporty driving on the whole!

[SkodaVRS1963]

A Ford Cap valuation on mine reckons £11,700 to £12,500.

 

So say £12,000; £24,350 from new and I've made 30 x £200 in payments plus a £5,200 deposit.

 

Payments in therefore = £11,200, outstanding balance = £13,150. 

 

So I reckon I'm about £1,100 in negative equity.

[JKW]

I had thought the latest deal offer (£2k plus £500) would be ideal for me at this point (34 months into 42 month PCP ) to order a new one - Wrong !! With no equity now ( mileage double what it should be), I've elected to VT and order a new Octy SEL on a PCH. It has all the benefits of normal "ownership" without the hassles of part ex, haggling or future values. In addition, a much lower down payment(£824) and 35 monthly repayments just £2 more than my existing deal make it a no brainier decision for me. I've increased my mileage limit to 10k pa and because I really do look after my cars I should be able to take on another PCH deal in 3 years time without any financial penalties.

PCH really does seem the way to go !

JKW

[k3vkr]

I struggling to understand why anyone would think there would be equity in a brand new car after 3.5 years of ownership....?

That's a mental thought to have imo

I got my Vrs. From Henry's in Glasgow too and had a top notch experience with them

[SurreyJohn]

I think PCP might be one of those schemes that gets avoided in future, do it once, chance you will get burnt (or realise second time round that you have no deposit). Realise you may as well done PCH knowing it would go back with nil balance.

The interesting thing is what happens to the second hand market when all these cars hit it. Supply and demand suggests values will fall.

I have just ordered on a 2 year PCH and cost including deposit and VAT (total over 2 years) is about 22% of new list price, In other words I could do four of these and would be less than loss in value of a car kept for 8 years. Probably more like 10-12 years cost of owned car on the basis the older car would need spare parts, breakdown cover, major services, which I won't be paying. My payments over 2 years are under £4.5k on a £21k car

The PCH price makes no sence vs the list price of buying. But whilst the ratio is like that, PCH is only sensible plan.

Edited 2 July, 2016 by SurreyJohn

[the mad monk]

it only makes sense if you keep doing it, if the cars you get are keepers then just buying is the better option in the long run

its rumored that these pcp types are the next ppi, start of the deal 'yes youll have equity in it sir' end of deal 'no sorry theres no money left in it sir'

as said, keep doing it then its worth it, one off job isnt, horses for courses

[SkodaVRS1963]

I struggling to understand why anyone would think there would be equity in a brand new car after 3.5 years of ownership....?

That's a mental thought to have imo

I got my Vrs. From Henry's in Glasgow too and had a top notch experience with them

 

Mine's 2.5 years old with quite a hefty upfront payment - I'm disappointed that I'm not at least level because after the third free service later this month I'd have handed it back and walked away.

 

Nothing too much wrong with the car to be honest but the fuel economy has been a real let-down.

[AllanDJ]

"I struggling to understand why anyone would think there would be equity in a brand new car after 3.5 years of ownership....?

That's a mental thought to have imo

I got my Vrs. From Henry's in Glasgow too and had a top notch experience with them"

 

If you read what I wrote originally at start of this thread, I too bought my car from Henry's in Glasgow too, at first the experience seemed all good, but looking backwards now, there are some very serious issues there with regard to mis-selling by the salesman that I dealt with as he was absolutely adamant that at the end of the 3.5 year deal that there would be circa £2000 equity in that car over and above the GMFV. If you add in the fact that he told me that the 0% finance deal was going to end in a day or so ( this is at end of September 2013) and that if I wanted a car under that deal, that there were none available in the UK but literally one car just manufactured at the factory. Of course that 0% deal ran and ran for virtually years and he probably knew that it would be extended. He also knew that I needed a car quickly as my previous car had been written off. I took the deal because I needed a car and had not ever had a new car before but that deal was 3.5 years 0% against full RRP as he would not reduce the price at all, even with no trade in to muddy the waters. So after paying a deposit upfront plus nearly three years of fairly high payments, I think that I am entitled to feel a bit hard done by to find that even Skoda dealers are not interested in a mint, low mileage example of one of their cars unless I pay them some extra money to take it off my hands right now or hand them it back for no trade in advantage by voluntarily terminating the PCP agreement as soon as I can!

 

It seems that Skoda have made a complete hash of their financial calculations with these PCP deals as it is very much in their interest that there should be at least some extra residual value left at the end of the agreement to allow customers some deposit if they choose to buy another Skoda again. And after this fiasco I think Skoda will lose quite a few customers and deservedly so, unless they get a move on and start offering people coming off these deals some sort of extra discount from Skoda UK over and above anything they can squeeze off the individual dealers.

[SkodaVRS1963]

WTF?

 

Either Skoda's final values for PCP punters are "having a laugh" or this seller is doing the same.

[cherry evo]

Car deals aren't the place to earn money,investments are

Nuff said?

 

Bet many used car dealers would beg to differ!

[Smudger64]

Currently got a mk3 oct like a lot of people listened to the salesman about having equity so traded in my yeti and out of curiosity and basing it on mileage I've already done and the mileage in the yeti it seems had I have not traded my yeti Would have been £3000 positive equity and it would have been over 3 yrs old now.

[Matt Pez]

If the op wants to keep it, £9300 for a low mileage O3 is a decent price bearing in mind you know the history of the car. I recently traded my O3 at 33 months old for £8.5k with 72.5k miles on the clock, it's found its way to NI and is currently on sale for £11k!! I didn't have a PCP as it was a discounted cash purchase but I still lost £12k in less than 3 yrs, will be interesting to see how much the BMW loses in the same period, bearing in mind it had already lost £19k over 21 months before I bought it!