Leaving PCP

Snakeweasel · 20-04-2017 02:03PM #1

Has anyone here ever taken the option of just walking away from the dealer they bought their car from at the end of their PCP?

In my case, I have an A4 which I have another year of PCP on. Any way I look at it, I will be tied in to another 3 years of car finance minimum either through getting a new car on PCP or financing the balloon payment. Would I be crazy to pay the penalty for going over my mileage and just walking away, and get a small loan for a second hand car elsewhere? I really dont want to be paying big monthly repayments for the rest of my life

AvonEnniskerry · 20-04-2017 02:13PM

Would you consider buying out the car instead?

jimmycrackcorm · 20-04-2017 02:17PM

No it wouldn't be crazy to walk away. It's basically about the maths and affordability.

A good option though is to change after the first pcp to a cheaper car and save extra money to buy the balloon outright. E.g. after 6 years you've gone through two new cars and are in a position to pay off the balloon and own a three year old car with your own history. Otherwise you're basically likely to be in a similar position if you take out a loan to buy an unknown car the second time over the same period or longer.

Snakeweasel · 20-04-2017 02:41PM

jimmycrackcorm wrote: »

No it wouldn't be crazy to walk away. It's basically about the maths and affordability.

A good option though is to change after the first pcp to a cheaper car and save extra money to buy the balloon outright. E.g. after 6 years you've gone through two new cars and are in a position to pay off the balloon and own a three year old car with your own history. Otherwise you're basically likely to be in a similar position if you take out a loan to buy an unknown car the second time over the same period or longer.

Do you mean move to something like a Golf? (I was told by sales rep when I bought I could get anything in the Volkswagen family)

As in I would be paying back probably half of what I am now as well as having a smaller balloon payment at the end of the 3 years?

AvonEnniskerry · 20-04-2017 02:45PM

Snakeweasel wrote:

Do you mean move to something like a Golf? (I was told by sales rep when I bought I could get anything in the Volkswagen family)

That's not correct. You can approach any garage with your PCP in order to renew. So any car is possible. Not just vw

Snakeweasel · 20-04-2017 03:00PM

AvonEnniskerry wrote: »

That's not correct. You can approach any garage with your PCP in order to renew. So any car is possible. Not just vw

Really? as in the Skoda dealership down the road from them? I thought the way it worked was that the Audi/VW dealer I bought from owned the car unless I paid the balloon?

jimmycrackcorm · 20-04-2017 03:44PM

Snakeweasel wrote:

Really? as in the Skoda dealership down the road from them? I thought the way it worked was that the Audi/VW dealer I bought from owned the car unless I paid the balloon?

No you can go to any dealer. You'll find also that another dealer for another marque may well give you a better tradein price. They then pay off the balloon and you can use whatever equity is remaining towards another different make.

You're not obliged to take another PCP either, so you could for example. put together a credit union loan with the trade in equity to buy something.

Snakeweasel · 20-04-2017 04:11PM

jimmycrackcorm wrote: »

No you can go to any dealer. You'll find also that another dealer for another marque may well give you a better tradein price. They then pay off the balloon and you can use whatever equity is remaining towards another different make.

You're not obliged to take another PCP either, so you could for example. put together a credit union loan with the trade in equity to buy something.

Ah here, I know how dim I look considering it was such a big purchase, but I didnt think you could use it as a trade in unless it was through PCP?? Since day one I left the dealers feeling as if my only 3 options were;
1. Take a new car on PCP, with the existing one as deposit
2. Buy car outright at the end of 3 years
3. Hand back the keys at the end of the 3 years and walk away with nothing.

So I could trade in my current car along with a small loan and buy a car outright?

AvonEnniskerry · 20-04-2017 05:47PM

Snakeweasel wrote:

So I could trade in my current car along with a small loan and buy a car outright?

When you go to change cars you still owe your gmfv which is your lump sum. When you go to a garage... any garage to change the car they will offer you a trade in value for your vehicle. It might be 20000 Whilst the gmfv is only 15000. If you decide to go ahead they will pay off the outstanding 15000 to the garage you purchased the car from and that'll leave you with 5000 to put towards a car of your choice from your chosen garage. You can then add to that 5000 with a small loan to purchase a car out right.

JoeA3 · 20-04-2017 06:03PM

As everyone else says, PCP is just a term loan. In your case from "VW Bank". You are free to do whatever you like, all you need to ensure is that the loan is cleared off in the agreed time. The bank won't care about anything else!

James Bond Junior · 20-04-2017 06:13PM

I can only imagine these kind of threads are going to get very popular in the near future.

aerofoiled · 20-04-2017 06:39PM

No offense OP, but these PCP threads remind me of that 'I don't know what a tracker mortgage is' ad.
Did people learn nothing or does a shiny piece of metal remove all rational thought???

MarkN · 20-04-2017 07:12PM

aerofoiled wrote: »

No offense OP, but these PCP threads remind me of that 'I don't know what a tracker mortgage is' ad.
Did people learn nothing or does a shiny piece of metal remove all rational thought???

I'd also blame at least 50% at the dealers door who clearly took advantage of someone just to make a sale. It very evidently wasn't explained properly.

bidiots · 20-04-2017 10:38PM

MarkN wrote: »

I'd also blame at least 50% at the dealers door who clearly took advantage of someone just to make a sale. It very evidently wasn't explained properly.

Nope, don't agree with that...... reminds me of everyone blaming the banks for lending them half a million to buy a shoebox in Dublin. Don't understand the agreement? Don't take out agreement. Bit of personal responsibility and all that

Zurbaran · 20-04-2017 11:00PM

bidiots wrote: »

Nope, don't agree with that...... reminds me of everyone blaming the banks for lending them half a million to buy a shoebox in Dublin. Don't understand the agreement? Don't take out agreement. Bit of personal responsibility and all that

So it's alright for salesmen to act in an unethical manor just cause the customer doesn't know the ins and out of PCP's?

jelutong · 20-04-2017 11:01PM

Add "The Goverment made us buy diesel cars" to the list.

Zurbaran · 20-04-2017 11:01PM

Same goes for banks as well.

Donal55 · 20-04-2017 11:05PM

aerofoiled wrote: »

No offense OP, but these PCP threads remind me of that 'I don't know what a tracker mortgage is' ad.
Did people learn nothing or does a shiny piece of metal remove all rational thought???

Haha.
In hindsight it actually appears that the banks themselves didn't know 'what a tracker mortgage is'.
I love it.

Audioslaven · 20-04-2017 11:21PM

Zurbaran wrote: »

So it's alright for salesmen to act in an unethical manor just cause the customer doesn't know the ins and out of PCP's?

Since when did a salesman care about acting in an ethical manner or a car dealership at that, bang in the banks as well.... they only care about the sale and their commission.. their loan sales etc. It is the responsibility of the customer to know what he/she is getting into. The customer as you state needs to stop acting like a naive fool.

Audioslaven · 20-04-2017 11:22PM

Donal55 wrote: »

Haha.
In hindsight it actually appears that the banks themselves didn't know 'what a tracker mortgage is'.
I love it.

Brilliant!!!

mickdw · 20-04-2017 11:37PM

As said, you can do whatever you wish.
I'd contact Audi dealer for a settlement figure on existing deal. Vw bank will send you an official letter after this request indicating what is owed on your car.
Walk into toyota dealer for example. Get a trade in value from them, produce your settlement letter and straight away you have you equity to go forward. It's as simple as that. You can then pcp a new car, buy outright a new car of any description or buy outright a used car.
Handing back the keys and also paying a penalty due to mileage would be criminal really when your car is most likely worth far in excess of the amount owed even with the excess miles on it.

Zurbaran · 20-04-2017 11:45PM

Audioslaven wrote: »

Since when did a salesman care about acting in an ethical manner or a car dealership at that, bang in the banks as well.... they only care about the sale and their commission.. their loan sales etc. It is the responsibility of the customer to know what he/she is getting into. The customer as you state needs to stop acting like a naive fool.

Accepting that the sales man is out for commission so anything goes is unacceptable.

You seem to know about these products like many of us do but if you were to be sold for example a mortgage/pension or a myriad of other financial products, should it be up to you to know you are being duped? Or maybe you did some research but still got made a fool of because the guy selling it knew more than you. Is that fair enough as well?

Tigger · 20-04-2017 11:45PM

Zurbaran wrote: »

So it's alright for salesmen to act in an unethical manor just cause the customer doesn't know the ins and out of PCP's?

I was part of a group secretly sent round vw group garages to gauge how pcp was being sold in late 2014 , basically for 15 cars
I found that it was explained very well and that my wife who accompanied me kept saying that we could have a 151 diesel car instead of the big engined high tax older cars I insist in buying.
New cars are very enticing they make non car people think you have a good car

jimmycrackcorm · 20-04-2017 11:56PM

Snakeweasel wrote: »

3. Hand back the keys at the end of the 3 years and walk away with nothing.

In most cases this would be a bad option where the trade-in value is worth more than the GMV. You'd be better off using any equity even as a trade-in on a cheap older second hand car than giving that money to the dealer for nothing.

Zurbaran · 20-04-2017 11:58PM

Tigger wrote: »

I was part of a group secretly sent round vw group garages to gauge how pcp was being sold in late 2014 , basically for 15 cars
I found that it was explained very well and that my wife who accompanied me kept saying that we could have a 151 diesel car instead of the big engined high tax older cars I insist in buying.
New cars are very enticing they make non car people think you have a good car

I'm sure most are fine. It doesn't excuse the bad ones though.

I'd be interested to know how you would approach these dealers. Would you be a knowledgeable buyer or go in as someone who knows very little about cars, financial products or both? Also why was it just VW garages and who were you working for?

Audioslaven · 21-04-2017 12:06AM

Zurbaran wrote: »

Accepting that the sales man is out for commission so anything goes is unacceptable.

You seem to know about these products like many of us do but if you were to be sold for example a mortgage/pension or a myriad of other financial products, should it be up to you to know you are being duped? Or maybe you did some research but still got made a fool of because the guy selling it knew more than you. Is that fair enough as well?

Stop digging!!. It is the responsibility of the purchaser to know the terms of the offer and the implications of the offer. Playing the dumb card just does not cut it.

GB FAN GALWAY 30 · 21-04-2017 12:08AM

I've had a fear about the impending PCP bubble that's about to burst around the country. From a garage point of view the maths are also disastrous. In the initial deal the offered a guaranteed minimum future value. The problem now is that take a VW XY that they said would be worth €17,000 minimum after three years can now be bought in from the UK for maybe €13,000. That's quite a gulf to cover and it's being replicated across car brands. Also form a personal finance point of view I really think the next recession isn't far away!

Zurbaran · 21-04-2017 12:13AM

Audioslaven wrote: »

Stop digging!!. It is the responsibility of the purchaser to know the terms of the offer and the implications of the offer. Playing the dumb card just does not cut it.

Digging? Sure it's grand. Lambs to the slaughter.

mickdw · 21-04-2017 12:43AM

GB FAN GALWAY 30 wrote: »

I've had a fear about the impending PCP bubble that's about to burst around the country. From a garage point of view the maths are also disastrous. In the initial deal the offered a guaranteed minimum future value. The problem now is that take a VW XY that they said would be worth €17,000 minimum after three years can now be bought in from the UK for maybe €13,000. That's quite a gulf to cover and it's being replicated across car brands. Also form a personal finance point of view I really think the next recession isn't far away!

I don't agree that it's as bad as that at all. The gfv is set well below expected market value. A car with gfv of 17k would have retailed at 40k new approx.
There are not many 40k cars that can be landed here vrt paid at 3 years old for 13k.
I think there is more than enough room left in the figures to protect the finance companies from a disaster however, the customer will get screwed as actual value approaches gfv meaning no deposit to go forward.

milhous · 21-04-2017 01:04AM

I like the pcp option, it works well for me, it was explained very clearly by VW at the beginning ( I had it well researched before I went in tbf). I see it as a long term lease with the option of buying. 0% finance.

If Leasing (pch?) was available here for private use I'd prob use that instead tbf, as I have no intention of buying it at the end.

Current Passat has a gfv of 13.5k which will be the balloon payment at the end if I choose to keep it, but my model with the current miles are listed at between 23-25k at the minute, say 3k for the garage out of that for the hassle and another 8months depreciation and I should still have some equity there towards new yoke.

Marcusm · 21-04-2017 03:32AM

Zurbaran wrote: »

So it's alright for salesmen to act in an unethical manor just cause the customer doesn't know the ins and out of PCP's?

I suspect the salesmen are no less ignorant than the customers.

Leaving PCP

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