Potential pitfalls with my plan?

Cyrus

We are 2 years into a 3 year PCP on a mid size SUV, value when new approx 55k. There may be the option of taking a new one (slightly facelifted) for no increase in monthly payments and no addition deposit.

I am half thinking of doing it as i need new tyres and if nothing else it will save me the grand or so that it would cost.

Ideally we will change this car in the next 18-24 months for a larger car, but theres no immediate need for that.

Whats the downside of me doing this (model should still be a current one when i goto change it)

Say i was trading against another car in 1 years time (probably second hand so not a PCP) presume i am likely to have more 'equity' in the three year old non facelift with just a balloon payment left to pay than 12 months into a new PCP arrangement on a facelift model.

At the moment it seems attractive but im not sure that it is.... :P

colm_mcm

Whatever way you dress it up, you’re still financing an asset which will depreciate sharply - moreso than what you have.
Now of course the new car will be worth more than the one you have now in 2 years time, but the reality of it is that you’re better off staying with what you have and paying off the balloon.
There’s no way that changing up two years is the cheaper option. It’s kicking the van down the road.

aFlabbyPanda

in january, we were about 3 months away from the end of a 3 year PCP (0%) deal and 'upgraded' from a fabia combi to a 191 octavia with no additional money paid. we just used the equity to go to the octavia and keep the payments the same.

We switched from diesel to petrol which in hindsight was a mistake. When we went back to see if we could trade back to diesel, because our new pcp deal was so new and the octavia had depreciated so fast from new it would have wiped out all the equity we had and would have cost us to switch to even a 182 or 191 similar car.

my advice would be to wait and you should have more equity in a years time and probably get a better deal. I would have preferred to wait.

carsfan2

How much deposit did you put in day one and how much equity/ new deposit will go into the new car? Is the gfv of the new car the same or more than your current car? Without figures it’s hard to know if you’re doing well or not.

Is the facelift car much nicer or better than what you have as if it’s much different you might find that waiting another year will be of little benefit to you equity wise even though in theory the car will have done most depreciating in the first year but uourcar will look even older and unattractive compared to the newest model.

Cyrus

carsfan2 wrote: »

How much deposit did you put in day one and how much equity/ new deposit will go into the new car? Is the gfv of the new car the same or more than your current car? Without figures it’s hard to know if you’re doing well or not.

Is the facelift car much nicer or better than what you have as if it’s much different you might find that waiting another year will be of little benefit to you equity wise even though in theory the car will have done most depreciating in the first year but uourcar will look even older and unattractive compared to the newest model.

Deposit was 20% but only because it was a rolling deposit from 3 cars ago (i have effectively maintained 10/11k equity through 3 Pcps). I understand i havent really and that some of it is related to discounts on the new cars.

The same amount would roll to the new car, prices are effectively the same. GFV will be the same aswell.

Facelift is nicer visually, but not vastly different (as with most facelifts!)

carsfan2

You have to assume the garage has done the sums on getting your car ready to retail again with Tyres etc. in giving you cost to change figures.
If you like the car and fancy a new one with new warranty etc go for it. It’s a personal choice, no right or wrong as far as I can see so if the sums work for you fair enough.
Have you looked at other makes or models though to be sure you’re getting the best trade in value for your own?

MarkN

Did something similar in July with the wife's car. A Qashqai not anything premium but I would know the sales guy and he randomly called one day, said he could roll a new PCP, give no deposit and bring the repayments down if we got in before the month end. Obviously the options in Feb 2020 (the 3 years would've been up then) were all the usuals but financing the balloon would've meant higher repayments and handing it back seemed a bit mad so we kicked it down the road. The obvious one is you're still paying more money over a longer term and borrowing a new amount so it's not for free but if it suits where you are currently then it might be worth it.

carsfan2

Are the garages now contacting people on pcp to offer this routinely?