retalivity wrote: » Isnt one of the options at the end of a pcp contract to just hand the keys back, instead of a final balloon payment? Im in a pcp agreement, 3 yrs up end of march. Options available to me are 1) final lump sum payment 2) structure final payment over 2 yrs 3) use gfmv (or better) as a deposit towards a 181 and a new pcp contract. Or 4) hand back the keys and walk away with no car. So sticking it out for another 18mths would mean handing it back for nothing instead of handing it back for an 11k penalty now? Is that an option here?
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”
munchkin_utd wrote: » givyjoe , from what i gather, with BMW the minimum guaranteed final value is guaranteed and once the car is in good condition and not over mileage you can throw the keys back with only an admin fee.https://www.bmw.ie/en/topics/owners/for-owners/bmw-financial-services/financing-your-bmw/bmw-select--pcp--finance.html I've heard a lot of bad press about PCPs but honestly I dont get the problem. You pay a deposit (or not as the case may be) , pay an amount per month, and throw back the car at the end of the period.Wheres the scam ?
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. Same as selling your own house (rather than your neighbours) with an outstanding mortgage on it, people do it every day of the week.
frozenfrozen wrote: » 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
ForestFire wrote: » Call the Guard's, someone sold a Car they did not own as were only renting:eek::D Only joking, but good to see confirmation that at least this is a possible solution from exiting a PCP early. Did you need to get any prior agreement from Car dealer/ Finance company? Was there any penalties for paying back early?
Dakota Dan wrote: » If she sells the car with finance owed doesn't that mean that the new owner is liable to pay the outstanding finance?
Pelvis wrote: » Her salary is high enough, the problem is her commute is essentially doubling her costs.
Dakota Dan wrote: » THey paid off the balance first, did you miss that part?
awec wrote: » Disagree. Spending 25% of your gross annual salary on a car for three years, before you put a badge in the windscreen or a drop of fuel in the tank is crazy.
ForestFire wrote: » Posters said selling was not possible to sell a car on finance, period. ..
mickdw wrote: » Where you getting 25 of salary from. The car is realiatically costing 3840 per year in repayments and abput 1k per year into deposit assuming 3k deposit and zero equity at end. In normal circumstances, even with increased mileage you should have a car worth the gfv at the end. So about 5k per year. I think that is steep for a mini but not a crazy amount of money to keep a new easy to run warrantied car.
Guy:Incognito wrote: » You're not selling a car that's on finance, you're selling a car you've just bought for cash. Try to keep up......
awec wrote: » The car she bought is worth 27k. No matter what way you do it, when you buy a 27k car you're going to pay 27k for it. PCP has an element of kicking the can down the road a bit with the fancy salesman talk that makes it seem like the car costs less because a lot of the cost is loaded at the end of the term. It is pretty straightforward. Take the value of the car, divide it by the number of months you want to pay it back. Can you afford to pay this amount? If not, you can't afford the car. Ignoring the balloon payment at the end is just bad practice. Guaranteed Future Value must be one of the most misleading terms in the retail business.
mickdw wrote: » The mistake you are making is that she is not attempting to pay for the car over 3 years. If you want to work the true figures for the entire car, you should divide by 6 years and add alittle more interest because the vast majority on pcp who buy the car at the end will refinance the final payment, ok so 27k. Add anofher 3k interest to refinance the final payment thats now a 30k car paid for in full over 6 years. Again 5k per year. To buy a new car outright over 3 years from a small deposit position day one is going to be too expensive for 90 percent of car buyers. Before pcp many would have been taking 5 year hp. The pcp is similar just lets people cash out at three year stage because thats what suits dealers best in terms of sales. So pcp and walking away at year 3 should cost cifca 5k per year to use the car. Pcp with buying outright will cost circa 5k per year for 6 years with ownership at end.
awec wrote: » 6 years is far too long to be paying off a depreciating asset like a car. If you get to balloon payment time, having paid for the car for three years and you realise you have to refinance for another 3 years this must surely set off alarm bells? Stretching out the loan term as long as possible does not mean it magically becomes affordable.
mickdw wrote: » That is the reality of it. It is not true to say that she was trying to pay off a 27k car in 3 years. She should have been aware that this is the reality she was facing. Certainly in my own situation, were i to go pcp route, I would be uncomfortable with having that 3 year deadline wherr i would have to act. I much rather take out finance over whatever term and then hold the car for whatever length suits best financially. Pcp works brilliantly for the dealers as most people when faced with financing the baloon or financing a new car will go for the new car.
mickdw wrote: » That is the reality of it. It is not true to say that she was trying to pay off a 27k car in 3 years. She should have been aware that this is the reality she was facing. Certainly in my own situation, were i to go pcp route, I would be uncomfortable with having that 3 year deadline wherr i would have to act. I much rather take out finance over whatever term and then hold the car for whatever length suits best financially.Pcp works brilliantly for the dealers as most people when faced with financing the baloon or financing a new car will go for the new car.
mickdw wrote: » That is the reality of it. It is not true to say that she was trying to pay off a 27k car in 3 years.She should have been aware that this is the reality she was facing.Certainly in my own situation, were i to go pcp route, I would be uncomfortable with having that 3 year deadline wherr i would have to act. I much rather take out finance over whatever term and then hold the car for whatever length suits best financially. Pcp works brilliantly for the dealers as most people when faced with financing the baloon or financing a new car will go for the new car.
Kailee Muscular Shrapnel wrote: » The advice of sucking it up and refinancing the baloon at the end makes sense. Just make sure the car is serviced properly. Agree with asking for a raise in work. On a general note, this is going to happen a lot. PCP really only suits people who do small milage and like new cars. You are also using your equity or deposit to make the repayment smaller rather than as a asset for the next car. Seems to me a lot of people who want or need a new car do big milage. There is a PCP bubble and its going to pop soon.....bring on the cheap second hand cars.
ShadowHearth wrote: » I actually dont agree that pcp only for people who do low millage. I already did 15k km in half year on mine. The issue is not millage, issue is common sense and lack of planning. Pcp was cheapest way to finance a car for me due to 0% apr and very good trade in. Here comes planning and common sense: I am putting away 50eu each week to separate account that will cover the balloon in the end if I decide to buy it out. If not, I will still have 8k+ to toy around with idea of taking out another car. No surprises. Ops gf did not planned or though about the future. Never did maths or had some savings for worst case scenario to cover payments for at least some amount of time. I will agree with people here that it sounds mad to give car back and 11k on top of it. It does not sound right. Best solution right now is to suck it up and pay it off until 3 year term is finished and work the issue from there. If ops gf smart, she will already start putting away money for when time comes.
ShadowHearth wrote: » I am putting away 50eu each week to separate account that will cover the balloon in the end if I decide to buy it out. If not, I will still have 8k+ to toy around with idea of taking out another car. No surprises.
MarkN wrote: » Just out of curiosity, would you not have saved money per month just doing HP then, seeing as you're also putting away 200 quid a month for what is basically another car repayment?
ShadowHearth wrote: » Hp was 5.9% on top of car cost. So why would I pay bank a few grand for nothing? In this case I am paying zero to bank and if I want to I can pay off car in 3 years, not 5. At the same time in 3 years I can take a loan for 4k eu and pay the rest with small loan, keeping another 4k in my bank account as savings for rainy day. 8% apr on 4k is a lot less then 6% on 21k+++.
happywithlife wrote: » I emboldened the bit about the gf shouldn't have been allowed to take out the contract. That grates on my nerves as she wasn't forced to. It's typical attitude of a certain generation where they want everything and want it now. There is such a thing as personal responsibility. I am not lucky. I have been in tough s****y financial circumstances . My husband was in a similar situation but with a HP agreement he decided on a whim to hand back the car without realising he was liable for a minimum payment. He - we as a couple- had to pay without having the use of a car which is why I urged the op to look at making cutbacks to try and hold onto the car
emeldc wrote: » Did you fess up that you were doing 30k km's p/a. And if so did it have a bearing on your monthly repayment or your balloon payment.
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