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The impact of high used car values on end-of-PCP options

  • 11-10-2021 12:31pm
    Registered Users Posts: 8 DelayedAgain

    I have a 3-year PCP ending in 4 months time and want to change car. My original intention was to use the final equity in the car to fund the deposit on rollover to a new PCP, but the current high value of used cars has made me reconsider as the equity is now likely to be much higher than I thought it would be. If I rollover into a new PCP on similar terms, I could lose some of that equity.

    I think my car is worth around €29K-€32K and my final payment is around €15K. That gives me an equity figure of circa €15K - notwithstanding that there's still a few months to run on the current PCP. I originally thought the equity would be around €8K.

    Therefore, given current high used values, is it clearly better to pay off the end-of-PCP lump sum and have the full value of the car to use as a trade-in (or sell) or are dealers willing/able to take higher equity into account for rollover PCPs for a newer car? Presumably, anyone with a PCP coming to an end in the next few months will have a similar decision.


  • Registered Users Posts: 1,747 ✭✭✭ Buddy Bubs

    You kind of have the full value to play with anyway, without clearing the finance if you trade it in the dealer clears it and gives you the equity, same as clearing it yourself. It's not a big admin task or anything to do it from the dealers.

    It's all just smoke and mirrors, it's all the one. If you are good at driving a deal you'll do well, if you're not you'll get walked on by someone who is. Depends of course what you can get a dealer to offer and what you can sell it for in the open market. And only way yo know is to try get prices yourself. 30k car very tough sell in the open market but it can be done.

    Higher used car prices are unfortunately being offset by higher new prices and higher prices of newer used cars, so no matter what you want to trade in against cost to change can be still much higher than expected.

    My car is worth more than I thought it would be at this stage but I can't find any value in changing at the moment I think its more expensive now than ever to change.

  • Registered Users Posts: 3,028 ✭✭✭ Lantus

    If the gmfv is 15k and the market value 30k then you equity is nearer 12k or abouts as the dealer has to factor in their profit on your car.

    You also have a beast of a wait on any new car due to supply issues, legacy chips etc. In theory you might do a little better but you will need a second car to cover any private sale and best of luck selling a 30k car off your driveway with 15k of outstanding finance on it. Possible but tricky.

  • Registered Users Posts: 8 DelayedAgain

    Thanks Buddy Bubs. Good to know that dealers can be flexible in terms of the outstanding finance, I had more or less assumed I would just clear it myself. The cost to change is a concern alright, given that I'm trying to take out as little finance as possible on the next one.

    Thanks Lantus - I should have factored in a bigger cut for the dealer, I was leaving it at less that €3K, so that's good to know as well. No second car either, so will work through a dealer.

  • Registered Users Posts: 1,492 ✭✭✭ joebloggs32

    You are almost overthinking it.

    Go into a few dealerships. Tell them your GMFV. Let them know you may just pay it off, but if you get the right offer you would be willing to upgrade. Let them put their best foot forward.

    If you are changing dealer, the new dealer will sort out payment of the GMFV.

  • Registered Users Posts: 8 DelayedAgain

    Thanks joebloggs32 - and you're right, that's what it boils down to at the end of the day.

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