finance PCP

[randomskodaperson2]

Hi, I needed to start another username as my original login has a few issues with the email .

 

My pcp is ending in April / May and part ex is 1500 less than balance :-(

 

Looks like it is easier to hand my car back to Skoda finance and walk away as I am over the half way stage in the agreement.

 

Have you been in a similar position ?

[tigermad]

6 hours ago, randomskodaperson2 said:

Hi, I needed to start another username as my original login has a few issues with the email .

 

My pcp is ending in April / May and part ex is 1500 less than balance :-(

 

Looks like it is easier to hand my car back to Skoda finance and walk away as I am over the half way stage in the agreement.

 

Have you been in a similar position ?

Edited. 

Edited 17 February, 2017 by tigermad

[AllanDJ]

From reading the posts on here, it would rather seem that none of the Octavia's purchased on the original PCP deals in the UK have any equity at all. My PCP would end in April and after much looking around last summer and reading a few posts on here, I came to the conclusion that handing the car back was really the only option as my car was effectively worthless. If you were planning to keep the car another 3 years or more then buying it might make sense but with the huge amount of depreciation on these cars to this point in time, I wouldn't think it a good idea to buy a car which at best is worth a £1000 less than your GFMV. There are just too many of these cars on the market or just about to hit the market. Skoda actually sent me a letter offering me a so called deal to buy the car over 2 years at well over £400 PCM with interest, if they'd had any sense they'd have actually offered a discount off of the GFMV to purchase as it is kind of unlikely that the cars returned to them will make anything like their GFMV once they start hitting the auctions in large numbers.

 

It is a shame as I have actually come to really like my Octavia but I started the VT process the other week and am waiting for a call from BCA to arrange collection of the car in a few weeks time.

 

If you look at the figures for more recent versions of these Octavia PCP deals the GFMV is thousands less than the original mark 3 car PCP deals, which should mean in theory that later PCP deals would maybe have some small equity in them but that would need to be balanced off by either highly monthly payments or bigger discounts from Skoda to encourage people to take out these deals.

 

[Beast]

Hi

 

yes i was in the same position and was going to VT but decided to try and  sell it privately which i did with 2 weeks. Paid off final balance and buyer got a good car /deal. Looked in to VT and it does seem fair straight forward 

 

 

[threadbear]

I have just voluntarily terminated the PCP on my Polo as the trade in was a grand less than my settlement fee. But I am finishing early. I am in the process of buying an Octavia but having issues now with lenders about advertised interest rates and actual interest rates on the agreement on a personal loan. All finance is a bloody scam. 

 

I know that Octavias are heavy depreciators but I am getting mine for a good price as it is a pre-reg and the intention is to keep for a long time.

Edited 17 February, 2017 by threadbear

[threadbear]

4 minutes ago, Beast said:

Hi

 

yes i was in the same position and was going to VT but decided to try and  sell it privately which i did with 2 weeks. Paid off final balance and buyer got a good car /deal. Looked in to VT and it does seem fair straight forward 

 

 

Vt'ed my Polo this week. Took 5 minutes on the phone and cost less than a tenner. But I have had the car two years. 

[randomskodaperson2]

Many thanks for the replies.

 

Skoda/ VW finance must be writing off huge amounts off their books when the cars go to auction. Makes you think why don't they offer us revised deals to refinance instead of sending to auction. I suppose there are many who simply go back to the dealer and don't know about the VT option

[Beast]

Hi

 

I had similar problem 3 years ago with advertised rates and actual rates and put me off using the supermarket "cheap" rates deals and this time went for 3.9% deal from my bank instead of the 3% which is been offered by others. If you read the terms eetc of these deals the % rate can be between 3 to 22 % dependant on certain factors.. I suspect a lot of the actual loans are taken out above the 3%. the problem is that if you apply and they do a credit check. Its then on your credit history for a small length of time  and makes it harder to get a alternative loan  

 

 

[gregmk1]

10 hours ago, randomskodaperson2 said:

My pcp is ending in April / May and part ex is 1500 less than balance :-(

 

Don't be sad, you should be happy

 

You've paid £1500 less than the car has depreciated over the term of your agreement!!

 

Imagine if your car had £1500 "equity" in it. The £1500 "equity" covers the amount you've over paid for the car in the first place!

 

PCP is getting too much unjustified bad press at the moment.

[randomskodaperson2]

Quote

very true ! :-)

 

 

[AllanDJ]

Don't think that "happy" is a word used by too many people who've had an Octavia on a PCP recently! 

 

If you look at the situation with cold, hard logic, these PCP deals have actually been in effect rather expensive PCH deals, where the "owners" paid rather more than they would have done for a PCH deal simply because that extra payment was supposed to be available to them as equity when they came to trade in their car. But lo and behold, equity was there none whatsoever, hence the reason my next car is PCH, may as well cut out all that extra expense right at the start and leave Skoda to worry about things like depreciation!

[Suuntobob]

I wonder if the value will go up when the new car tax comes in, in April

[glosrich]

As long as you had a good discount upfront and had it on 0% you cant expect to have any equity. 

Basically VWFS have let you have the car on a free payment scheme for the term.

Its only an issue if you must have a new car every 2/3/4 years. Its a very wasteful culture when these cars will easily do 10 years without major problems. 

Our society brainwashes us into chasing the latest thing all the time, overpriced Apple products are another example. 

Look at it this way. You've got a cheap used car that you know how its been treated, rather than buying the usual abused overpriced trash garages pass off as approved used cars!

[gregmk1]

42 minutes ago, AllanDJ said:

Don't think that "happy" is a word used by too many people who've had an Octavia on a PCP recently! 

 

If you look at the situation with cold, hard logic, these PCP deals have actually been in effect rather expensive PCH deals, where the "owners" paid rather more than they would have done for a PCH deal simply because that extra payment was supposed to be available to them as equity when they came to trade in their car. But lo and behold, equity was there none whatsoever, hence the reason my next car is PCH, may as well cut out all that extra expense right at the start and leave Skoda to worry about things like depreciation!

 

I agree that the recent PCH deals are very good but they were not around three years ago when the 0% PCP was the best available option.

 

The good thing about PCP is that you know the depreciation before you sign up!

 

Anyone who thinks that equity at the end of a PCP is a good thing is wrong.

 

In terms of PCP:

 

Equity = The amount you have over paid for the car!

Negative Equity = The amount you have under paid for the car!!

[tigermad]

9 minutes ago, gregmk1 said:

 

I agree that the recent PCH deals are very good but they were not around three years ago when the 0% PCP was the best available option.

 

The good thing about PCP is that you know the depreciation before you sign up!

 

Anyone who thinks that equity at the end of a PCP is a good thing is wrong.

 

In terms of PCP:

 

Equity = The amount you have over paid for the car!

Negative Equity = The amount you have under paid for the car!!

Are you saying it's always best to be in negative equity if you intend to do another pcp then. At the end I mean. So you go in with no deposit at all from previous car? The guaranteed value is probably not going to help towards a deposit. 

[gregmk1]

3 minutes ago, tigermad said:

Are you saying it's always best to be in negative equity if you intend to do another pcp then. At the end I mean. So you go in with no deposit at all from previous car? The guaranteed value is probably not going to help towards a deposit. 

 

What I am saying is that in comparison to buying the car outright a "negative equity" situation is better.

 

Having "equity" to put towards another car means that you have just over paid for the car.

 

With PCP you can never lose. You know all the numbers beforehand.

 

Example:

 

GMFV > Value of the car ---- You have over paid for the car but the "equity" is offset against a new deal. You are no better or worse off.

GMFV = Valve of the car ---- You have paid the correct price for the car. You are no better or worse off.

GMFV < Value of the car ---- You have under paid for the car. You are better off.

 

[tigermad]

1 minute ago, gregmk1 said:

 

What I am saying is that in comparison to buying the car outright a "negative equity" situation is better.

 

Having "equity" to put towards another car means that you have just over paid for the car.

 

With PCP you can never lose. You know all the numbers beforehand.

 

Example:

 

GMFV > Value of the car ---- You have over paid for the car but the "equity" is offset against a new deal. You are no better or worse off.

GMFV = Valve of the car ---- You have paid the correct price for the car. You are no better or worse off.

GMFV < Value of the car ---- You have under paid for the car. You are better off.

 

The gmfv always remains the same though even if you change your mileage allowance or deposit. The only thing that changes is the monthly payment amount on a pcp. Surely if the gmfv is greater then the car value you are better off since that can go towards the new pcp and lower monthlies. You said I am no better or worse off. 

[old newbie2]

1 hour ago, Suuntobob said:

I wonder if the value will go up when the new car tax comes in, in April

Why would you think that.

For new most cars there's going to be an annoying £500 for the 1st year, then £140 PA forever.

 

Our Golf's VED was £ 185, & will remain £185, so £555 for three years, if we bought a new car in April it would cost us £780 for three years.

 

Compared to depreciation &/or the price of a new car, the £225 difference is peanuts!

 

DC

[gregmk1]

59 minutes ago, tigermad said:

The gmfv always remains the same though even if you change your mileage allowance or deposit. The only thing that changes is the monthly payment amount on a pcp. Surely if the gmfv is greater then the car value you are better off since that can go towards the new pcp and lower monthlies. You said I am no better or worse off. 

 

Whether you have £1 or £5000 "equity" at the end of a PCP you are no better or worse off.

 

With PCP you are paying for the depreciation of the car.

 

If a nice salesman or women says to you "You can have this new shiny vRS for £10,000 over 3 years but it will depreciate by £13,000." Is this better or worse than it depreciating only £8,000?

[silver1011]

4 hours ago, gregmk1 said:

GMFV > Value of the car ---- You have over paid for the car but the "equity" is offset against a new deal. You are no better or worse off.

GMFV = Valve of the car ---- You have paid the correct price for the car. You are no better or worse off.

GMFV < Value of the car ---- You have under paid for the car. You are better off.

 

 

The issue is that the 'value of the car car' is in fact the part exchange price, not the true value of the car. What the dealer will offer you at the end of the PCP is likely to be long way from what the car could actually be bought or sold for.

[SkodaVRS1963]

8 hours ago, randomskodaperson2 said:

Many thanks for the replies.

 

Skoda/ VW finance must be writing off huge amounts off their books

 

Not at all.

 

In my case, car bought from new for £24350.

 

I VT'd at 50% so VW Finance got £12175.  They then, I assume, sold it onto a Skoda dealer for the other £12175 so they're not out of pocket.

 

The Skoda dealer attempted initially to sell it for £14500 with, unsurprisingly, no takers but dropped the sticker price by a grand and shifted it.......so they'll have made close to £1500.

 

Win-win for VW Finance and Skoda.

[randomskodaperson2]

Looks like Skoda finance are now charging excess mileage when using this option.

 

Told on first call no other charges - phoned today and been told excess will be charged. find it difficult to believe change in two phone calls due to memo sent to staff.

 

Would like to know if any other members have experienced this change or position from Skoda finance. Have lodged a complaint.

[Ciderspace]

How can they change what's written in ones original PCP contract?

[randomskodaperson2]

they say it is under the mileage section of the contract 11.4 . I have a thread on the superb section as thinking of pch on new Superb but don't thing it will happen now some how.

[tigermad]

I phoned Skoda twice recently to confirm what I needed to pay to VT my car and excess mileage was not mentioned. They confirmed what I needed to pay and have mae a note of the calls on my file. I have since ordered a new Skoda on another Pcp after I was given this information so if they try and charge me I will be having stern words with head office.