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Advice on paying PCP finance off early ..

  • 06-03-2019 10:24am
    #1
    TheWaterboy
    Registered Users, Registered Users 2 Posts: 379 ✭✭


    So I currently have a VW Golf on 0% PCP finance .. My 3 years are up in August 2020.

    I am hoping to change the car this year - Circumstances are changed and I need to purchase a 4X4 SUV. I will probably go PCP again as it suits me and the cost of credit is cheaper than traditional bank / credit union loan

    So just looking for some advice:

    1) As far as I'm aware I can just pay off what is owed on the car - I could do that and then sell / trade in the car .. Go buy a new one then as a cash buyer.

    OR

    2) Go back to the VW garage and just trade in with outstanding PCP and buy a new VW

    Just not sure which is more attractive to the garage as far as getting best price. My father collected his new car last month and was buying straight as a cash buyer but they could sell it with bigger discount if he took out 1 year finance with VW bank!!


Comments

  • #2
    bazz26
    Registered Users, Registered Users 2 Posts: 51,363 ✭✭✭✭bazz26


    You don't have to go back to the same garage or same brand dealer to trade the car for another PCP deal. Any dealer can get you a settlement figure and then price the trade in value of your Golf, the difference is the equity you have against another PCP deal.

    Selling a car privately especially a high value car is pretty difficult these days and it would really need to be aggressively priced compared to what it would cost to import the same car from the UK. You also have buyers who just don't want to deal with the outstanding finance aspect of it no matter how much you explain that they can pay the finance off directly.


  • #3
    Lantus
    Registered Users, Registered Users 2 Posts: 3,027 ✭✭✭Lantus


    Or go to any garage and trade the car in for what you want. Garage settles finance and any equity is your deposit. Can be advantageous.


  • #4
    U_Fig
    Registered Users, Registered Users 2 Posts: 893 ✭✭✭U_Fig


    There might be a penalty and I would nearly be 100% sure you will have to pay the full interest amount of the PCP (assuming it's not 0%) if settling early. This should be laid out in the contract.


  • #5
    DirkVoodoo
    Registered Users, Registered Users 2 Posts: 11,505 ✭✭✭✭DirkVoodoo


    Contact VW Bank (assuming that is who the agreement was made with if a VW dealer) and get the settlement figure. It will be valid up until a certain date, normally just before the next payment goes out.

    It will include any penalties that might apply, but as it's 0% interest it should just be GFV + number of monthly repayments.

    I had to cancel mine a couple of months before it was due to end just there and it was a lot less painful than I thought it was going to be. 10 min phonecall.

    I had a 0% agreement with them too.


  • #6
    Lantus
    Registered Users, Registered Users 2 Posts: 3,027 ✭✭✭Lantus


    The penalty for interest on a vw loan I have is capped at 2 months.


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  • #7
    JoeA3
    Registered Users, Registered Users 2 Posts: 7,470 ✭✭✭JoeA3


    U_Fig wrote: »
    There might be a penalty and I would nearly be 100% sure you will have to pay the full interest amount of the PCP (assuming it's not 0%) if settling early. This should be laid out in the contract.

    No, in any PCP agreement I've had, paying off early means a saving on total interest that would have been payable. Obviously if the rate is 0%, then its irrelevant.


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