Returning a PCP car

mickdw · 07-01-2018 10:23PM

laserlad2010 wrote: »

Went through the letters again.

The letter asking for 11k and the car was from earlier this year as she had enquired about this previously.

The most recent figure is 19,000 to buy the car. It was 27,000 initially with credit costs.

She's a primary school teacher so can't just change jobs, or get public transport as the school isn't near a bus or train.

I think she just has to keep the car until the contract is up and then take out a loan for the GMFV.

Thanks all for your comments.

Ok so we are getting somewhere. 19k to buy it outright. A bit more than i expected. Given tha tshe would owe a further 5700 over the next 18 payments, that would suggest a very high gfv of over 13.5k on a car that costs 23 or 24k. Something not right here. Is it possible that there are payments missed. This would make more sense.
Anyway. The car is currently worth a very large chunk of the outstanding so its not a terrible position. She has a good job with guaranteed money so to be honest i wouldnt panic. Id stick with it, buy it out with loan at end and drive it for years after.

Stheno · 07-01-2018 10:24PM

laserlad2010 wrote: »

Went through the letters again.

The letter asking for 11k and the car was from earlier this year as she had enquired about this previously.

The most recent figure is 19,000 to buy the car. It was 27,000 initially with credit costs.

She's a primary school teacher so can't just change jobs, or get public transport as the school isn't near a bus or train.

I think she just has to keep the car until the contract is up and then take out a loan for the GMFV.

Thanks all for your comments.

how much over the mileage allowance has she gone?

27000 - (320×18+deposit of say 3000) = 18240 so close enough tbh

colm_mcm · 07-01-2018 10:25PM

rustynutz wrote: »

Her name is on the logbook, its hers to sell. The only problem she may have is the new owner may look for proof she has paid off remaining finance.
.

That's completely incorrect. As long as it's being rented it can't be sold. Selling it without first taking the option to buy the car outright would be fraud.
Of course there is the option of the new buyer paying off the finance as there is with a HP agreement, but the last part of the quote suggests to me that that wasn't what you were recommending?

Name on a logbook doesn't mean you own the car.

2Mad2BeMad · 07-01-2018 10:40PM

Hi OP

maybe you could help her out?
I mean if you are with this girl a long time and see a future with her maybe give her 100quid a month towards the cost, I'm sure that would help alot.

I know some people say helping her would probably make her feel like she could do it again, but if you help her out for the next 18 months
18 months times 100 is only 1800 quid over that period.

I am not sure of your circumstances or if you could afford it, but I mean 100 quid a month if you could afford it.

Similar with my gf, also it wasn't a new car, she only bought a car had it a few months and lost her job. I had to pretty much pay for it.
I never looked for it back.
But like I said, if you see a future with her and you are with her a long time and if you can afford too maybe giving her a few quid a month towards it would help alot.

I dunno your circumstances as I havn't read every post but best of luck to your gf
I can completely understand the idea of having a brand new shiny car thinking you can afford it, unfortunately it doesn't take very long for that shine to go away when the first few payments go through haha.

CIP4 · 07-01-2018 11:07PM

I wasn’t sure what a primary teacher earns googled pay scales and it says starting salary of ~35k if it’s right that’s not exactly a minimum wage job so even with the commuting costs failing to see how she is struggling think doing out a detailed budget for her would be good to see where the rest of the money is going outside of commuting and rent. To be fair to her I don’t think she was going mad buying a new mini with €320 repayments with permanent ok paying job if anything it makes a lot of sense.

Outside of that I would agree with what most are saying makes no sense to hand it back it’s a fair commute and now she has become use to a new car and the reliability and back up that comes with it would be very difficult to go back to a cheap car and the potential big repair bills that come with it.

As other said you could possibly help her out with with the repayments if you are in a better position financially to ease her stress shouldn’t be a big deal if it’s serious as if you get married it’s 50/50 anyway. If you are not serious probably best cut her lose now and that’s the end of the PCP problem for you :pac: I am joking of course

jimmycrackcorm · 08-01-2018 12:09AM

The cheapest option out is to invoke the half way rule. Which means bridging the gap between the amount of money she has paid so far (deposit plus payments) and the half way value.

However there is a very important requirement to fulfil if doing this that is you have to specifically say that you are handing back the car and paying the difference under the half way rule.

bazz26 · 08-01-2018 12:14AM

mickdw wrote: »

Ok so we are getting somewhere. 19k to buy it outright. A bit more than i expected. Given tha tshe would owe a further 5700 over the next 18 payments, that would suggest a very high gfv of over 13.5k on a car that costs 23 or 24k. Something not right here. Is it possible that there are payments missed. This would make more sense.
Anyway. The car is currently worth a very large chunk of the outstanding so its not a terrible position. She has a good job with guaranteed money so to be honest i wouldnt panic. Id stick with it, buy it out with loan at end and drive it for years after.

BMW stuck a pretty high GFV on their PCP deals, something like 50% of the original value. I presume they did similar with the MINI.

thierry14 · 08-01-2018 12:19AM

Can she not move closer to work?

Wtf is a primary school teacher doing burning over 300e a month in a modern diesel

Imagined she was in sales or something with that driving

Primary school teaching

Madness

Whats her commute

Athlone to Dublin? Or something silly?

campingcarist · 08-01-2018 12:30AM

Danbo! wrote: »

My point was that even though the salesman knew I was only using the pcp for convenience, he still put on the big show of “brand new car for flip all, you’d be stupid not to” etc.. I could imagine many people who cannot afford the car to be blinded by the low deposit and the heavy focus the salesman puts on repeating “only €xxx per month”

I seem to remember much the same when many thousands of people overstretched themselves with a mortgage. Nobody's perfect.

dresden8 · 08-01-2018 12:35AM

PCP is a bubble. You heard it here first.

mickdw · 08-01-2018 12:56AM

bazz26 wrote: »

BMW stuck a pretty high GFV on their PCP deals, something like 50% of the original value. I presume they did similar with the MINI.

Yep but this mini was 23 or 24k id assume. That should be at maximum 12k gfv. It looks more like 13.5 to 14k in this case.

gflood · 08-01-2018 12:58AM

laserlad2010 wrote: »

Folks all responses appreciated, try to stick to the questions at hand rather than slagging her off please.

Yeah, look, I can't argue with the line "tough cookies, she should have realised what she was getting into" because that's exactly what's gone on. However, I'm just trying to help her fix the situation.

Her repayments are 320 a month, and with tolls and petrol her car costs approach 700 a month.

I have gone through the paperwork and that's what they want if she returns the car now, which is bizarre but that's the official written response they've given. It possibly includes the mileage charge.

Look, at the end of the day, she can make the repayments but then she struggles for the rest of the month. I feel it's probably a combination of the overall car costs rather than the actual PCP repayments.

My query really is how else can someone get out of a PCP rather than the halfway clause. Has anyone sold the car separately and then given the financiers a cheque?

Im sorry but its already been said. You dont own the car in a PCP agreement, you are renting it ... and renting it for quite a lot of money over the term.
PCP is a fooking ticking time bomb, how many others were duped (easily) into getting them. The ads for PCP should be considered illegal and fraud. They don't at all explain the consequences of the whole situation.

I was looking at PCP on a new BMW (drive an E92 at the moment) and I told them to fook off with themselves). The blatant lying about the whole contract was laughable. I would have spent nearly 25 grand renting the car over several years with possibility of never owning it.

mickdw · 08-01-2018 01:55AM

Id agree that the dealer experience at bmw has been beyond terrible when ive been in there. They continually come up with figures many thousands beyond where they should be whether it be due to not allowing manufacturer contributions or applying wrong interest rates etc with a strong line of bullcrap added in and a failure to go to anywhere near their best deal on the day only to be calling after dropping a few hundred here and there. All this for cars in stock and trying to hide zero discount for straight sale etc within the pcp deal.
Mercedes on the other hand were very straight forward.... knocking off respectible sum for straight sale and also knocking down price for buying a car from stock. He applied the advertised finance rate and came up with a figure very close to what i expected.
I told bmw to f off too when looking at a pre reg 330e one day as salesguy says there is 11k off due to pre reg.
When looking at the figures it was priced at 1.5k more than a brand new one due to grants etc.
Thst car is still up on carzone still looking for more than new price and its on a 171 plate.

bazz26 · 08-01-2018 01:59AM

mickdw wrote: »

Yep but this mini was 23 or 24k id assume. That should be at maximum 12k gfv. It looks more like 13.5 to 14k in this case.

I wonder were there any extras added to it though or did the OP's girlfriend pay full retail?

VW 1 · 08-01-2018 08:05AM

laserlad2010 wrote: »

Went through the letters again.

The letter asking for 11k and the car was from earlier this year as she had enquired about this previously.

The most recent figure is 19,000 to buy the car. It was 27,000 initially with credit costs.

mickdw wrote: »

Yep but this mini was 23 or 24k id assume. That should be at maximum 12k gfv. It looks more like 13.5 to 14k in this case.

bazz26 wrote: »

I wonder were there any extras added to it though or did the OP's girlfriend pay full retail?

From the OP.

Jobs OXO · 08-01-2018 08:24AM

VW 1 wrote: »

From the OP.

But what does "with credit costs" mean?

08-01-2018 09:49AM

Just putting something out there, I am hearing that PCP is a massive timebomb. What happens if she defaults and makes it difficult for them to repossess, how long will it take to get a court order ? maybe that doesn't make sense, but from what I am hearing that is the next big thing ..

Toyotafanboi · 08-01-2018 10:06AM

Have you got a source for that?

givyjoe · 08-01-2018 10:08AM

gflood wrote: »

Im sorry but its already been said. You dont own the car in a PCP agreement, you are renting it ... and renting it for quite a lot of money over the term.
PCP is a fooking ticking time bomb, how many others were duped (easily) into getting them. The ads for PCP should be considered illegal and fraud. They don't at all explain the consequences of the whole situation.

I was looking at PCP on a new BMW (drive an E92 at the moment) and I told them to fook off with themselves). The blatant lying about the whole contract was laughable. I would have spent nearly 25 grand renting the car over several years with possibility of never owning it.

The first thing they need to do is ban the use of the term Guaranteed Minimum Future Value! It's misleading..when it should be really called 'the massive fcuking lump sum you pay if you want to keep the car' / aka 'Balloon Payment'.

Cee-Jay-Cee · 08-01-2018 11:46AM

First of all the dealer doesn’t want the car back, they appear to be simply giving her the balloon figure which isn’t due for another 18 months in order to get out of the deal now. They’re probably hoping that she either continues with the PCP deal or pays the €11k and haves the car back.

Like others have said, the main problem is that your GF is traveling mental miles to a low paid job. Could she now get a similar low paid job closer to home and save herself the commuting bill? She could take an even lower paid job closer to home and still be better off!! Her job is the problem, the payments are low and €300 a month to have a near new car isn’t a huge amount of money.

I think she needs to start looking for a new job, without being presumptuous, it’s probably not a highly skilled job she’s in and I’m going to hazard a guess that she’s in retail or the beauty service industry. Surely she can get something similar closer to home to save on the commuting bill??

fits · 08-01-2018 11:50AM

Cee-Jay-Cee wrote: »

.

I think she needs to start looking for a new job, without being presumptuous, it’s probably not a highly skilled job she’s in and I’m going to hazard a guess that she’s in retail or the beauty service industry. Surely she can get something similar closer to home to save on the commuting bill??

Lol! Oh my. Or ya know... teaching...

givyjoe · 08-01-2018 11:52AM

Cee-Jay-Cee wrote: »

First of all the dealer doesn’t want the car back, they appear to be simply giving her the balloon figure which isn’t due for another 18 months in order to get out of the deal now. They’re probably hoping that she either continues with the PCP deal or pays the €11k and haves the car back.

Like others have said, the main problem is that your GF is traveling mental miles to a low paid job. Could she now get a similar low paid job closer to home and save herself the commuting bill? She could take an even lower paid job closer to home and still be better off!! Her job is the problem, the payments are low and €300 a month to have a near new car isn’t a huge amount of money.

I think she needs to start looking for a new job, without being presumptuous, it’s probably not a highly skilled job she’s in and I’m going to hazard a guess that she’s in retail or the beauty service industry. Surely she can get something similar closer to home to save on the commuting bill??

That's quite a lot of condescending and ignorance in one post.

frozenfrozen · 08-01-2018 11:53AM

Cee-Jay-Cee wrote: »

First of all the dealer doesn’t want the car back, they appear to be simply giving her the balloon figure which isn’t due for another 18 months in order to get out of the deal now. They’re probably hoping that she either continues with the PCP deal or pays the €11k and haves the car back.

Like others have said, the main problem is that your GF is traveling mental miles to a low paid job. Could she now get a similar low paid job closer to home and save herself the commuting bill? She could take an even lower paid job closer to home and still be better off!! Her job is the problem, the payments are low and €300 a month to have a near new car isn’t a huge amount of money.

I think she needs to start looking for a new job, without being presumptuous, it’s probably not a highly skilled job she’s in and I’m going to hazard a guess that she’s in retail or the beauty service industry. Surely she can get something similar closer to home to save on the commuting bill??

she's a primary school teacher on 35k

There must be something else going on with her budgeting but the thread has gone though that already

You're probably right though that they have just given her a 'go away' quote of 11k and handing the car back

Lantus · 08-01-2018 12:10PM

Just to provide some real options at this stage;

1/ keep paying monthly for next 18 months. The 5k figure. Hand back car after term. At this point the dealer may apply mileage penalties and you should obtain these to understand what your liability is in this regard. This is the best option as you get a car for the near future.

2/ arrange to pay off the 5k now and hand back the car early. You may not suffer mileage fees but you still need to pay the 5k and have no car. This doesn't make much sense.

Ultimately you need to pay the remainder of the 3 year term before you can pay back the car.

Larbre34 · 08-01-2018 12:23PM

There is no cheaper option than to persist with the contract. Leave the car parked up unless absolutely necessary, save on fuel at least get the average mileage down. Nobody will give her credit to fund a balloon payment, its unsecured money for nothing.

btkm8unsl0w5r4 · 08-01-2018 12:25PM

Larbre34 wrote: »

its unsecured money for nothing.

Thats what a personal loan is for, I think a teacher will get a personal loan no problem assuming she has a reasonable credit history. People are just pulling advice out of their hats at this stage.

Shadowthrone · 08-01-2018 12:34PM

Have you looked into voluntary termination? Not sure if it applies here like it does in the UK but I was able to use it to hand back my car without paying a penny through this. (although I know it does apply for HP in Ireland so I assume it does for pcp too)

I can't post links but google voluntary termination pcp.

It may not be applicable in your scenario but it is worth looking into.

Edit: However, under S. 63 of the Consumer Credit Act 1995, the 'Half Rule' clause allows you to terminate the agreement and return the vehicle owing nothing further, if more than half the repayments (including interest) have been made on the car.

Quick google brought that up so I'd advise looking into this it may be the best option. A lot of people don't know this is available to them as no lender ever tells you about it.

tabby aspreme · 08-01-2018 12:38PM

frozenfrozen wrote: »

she's a primary school teacher on 35k

If the teachers Union's get hold of this thread there will be hard bargaining in the next round of pay talks.
With headlines such as, "Young teacher cannot afford a Mini car"

frozenfrozen · 08-01-2018 12:44PM

tabby aspreme wrote: »

If the teachers Union's get hold of this thread there will be hard bargaining in the next round of pay talks.
With headlines such as, "Young teacher cannot afford a Mini car"

or else they'll start offering free financial advice services

ForestFire · 08-01-2018 12:53PM

givyjoe wrote: »

The first thing they need to do is ban the use of the term Guaranteed Minimum Future Value! It's misleading..when it should be really called 'the massive fcuking lump sum you pay if you want to keep the car' / aka 'Balloon Payment'.

Why is it so hard for people to understand that if you buy a car for €25 000 you will need to pay it all back???

It doesn't matter have big/small the deposit is....
how big/small the monthly repayments are....
how big small the ballon payment is.....

You have to pay back €25, 000 in total!!!

And if you are not on 0% PCP/finance then you have to pay back the cost of credit also. Normal you are told this up front too and can easily added to you 25K total.

No magic sales man talk should hide the fact that if you buy an expensive car that you are going to have to pay for it all.

Take you 25K + 3K COC (example) = 28K

Pay it back over 5 years (Reasonable amount of time)

28K /5/12 = 466 per month

If you do not have close to this, as disposable income, then you cannot afford the car.

(Fell free to take any savings off or spread the payments out over longer time but this should be your first rough estimate on "Can I afford this car")

Returning a PCP car

Comments