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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To ask advice re PCP on a car?

15 replies

Puddingfordinner · 28/02/2020 14:30

Going to chat to the dealer at the weekend but wanted to pick some brains first.

We had a BMW on PCP a few years ago. Really liked it, lovely car, no problems. So we got another one on PCP when our agreement expired.

But I'm starting to realise that we got quite a crap deal this time around. Love the car but the monthly repayments are expensive and the APR is a lot higher than it was last time and much higher than the current deals BMW is offering. And I've just discovered it doesn't include servicing like our first one did.

We're only a year into the 4 year agreement and I'm thinking I want a cheaper option. We can't sell it can we? And if we give it back now, we'll have to pay the outstanding finance, won't we? Is that right? Does anyone know how I can effectively wipe the slate clean and get a better deal on a different car??

OP posts:
Trunkysaurus · 28/02/2020 15:38

Finance deals change from quarter to quarter, so the deals that were on a few years ago would have no relevance to what is on now.

A PCP is designed so the car's value at the end of the contract is approximately the same as the balloon payment, so until you've paid off half of the amount borrowed, you can't hand it back without penalty.

Did you buy a new car or a used one?

BammBamm · 28/02/2020 16:01

I doubt very much you will be able to do this, although I understand there may be a 'break clause'? half way through. You would have to check your agreement and/or speak to BMW financial services.
If you bought new, you will probably owe significantly more than the car is worth a year in.

Hingeandbracket · 28/02/2020 16:20

Probably worth talking to the dealer to see if they can assist you - they might be able to get you into a cheaper car. In theory you can't do a voluntary termination on a PCP unless you've paid 50% but if they are keen to shift something else and they can sell yours on, they might be able to help.

HopeYouStepOnALego · 28/02/2020 16:43

You can't sell it as it doesn't belong to you. You'd have to buy it off the dealer first to be able to do that. If you want to do a voluntary termination you normally have to had paid off at least 50% of the finance first. Be aware that VTs are marked on your credit file.

Speak to your dealer and see if you can trade in your existing car for another one on a new PCP agreement. In some cases, this may pay off your old finance agreement entirely. In others, it won't cover the remaining debt and you'll need to make up the difference, though it can sometimes be added to finance on your next car.

Most importantly, read the paperwork carefully next time as the payments and APR should be advised to you before you sign the agreement.

Original poster
Puddingfordinner · 28/02/2020 23:27

Thanks all. The car was used but only about 3 months old. I'm really annoyed that we didnt interrogate the deal more before we signed on the line...

OP posts:
MamaLela · 28/02/2020 23:39

Not sure about only a year in, but essentially you get the car valued and that will pay off the remaining balance. If it's not worth as much as the balance this early on, then it's unlikely to be doable unless they're feeling generous. If it's the same or not far off then you might be able to use the car trade in to pay it off. It's usually better done directly with BMW themselves as they will be able to sell one easier than another company.

I've done it after 2 years on a 3 year deal so couldn't say for definite based on your situation but that is how it's always been explained to me. APR does seem horrendous on PCP these days, I took out a 5 year loan on my last one as I was gobsmacked at how much it was!

mumysgirls · 28/02/2020 23:46

This was a few years ago now but DH did a PCP deal and hated the car. He sold the car to we buy any and then paid off the finance with the cash.

Original poster
Puddingfordinner · 28/02/2020 23:52

@HopeYouStepOnALego when you say VTs are marked on your credit file - I had no idea about that. Is the assumption that you terminated it because you couldn't pay it off and so that goes against you?

OP posts:
Soontobe60 · 28/02/2020 23:54

My last car was PCP. I got one in lease after that and had to pay the balance of 2 years worth of payments plus any damage that needed to be repaired. With every PCP and lease I’ve gone got a deal with no or low deposit. Had interest free PCP too. I wasn’t that fussed about the cars I got though.

Soontobe60 · 28/02/2020 23:56

And the VT isn’t on my credit file, I’ve just checked!

Trunkysaurus · 29/02/2020 03:51

New car PCPs get subsidised interest rates. Used cars dont as a rule.

Glittertwins · 29/02/2020 06:42

Our cars are via BMW financial services. You can't give it back unless you have made half the payments on the plan. If it was not brand new when you got it, there might also be negative equity too. We had DH's car for just over 3 years out of a 4 year deal and hadn't actually paid half the value - we had to pay an extra £500 to make that 50% value despite having the car for 75% of the term.

DinoGreen · 29/02/2020 07:35

I ended a PCP deal after only a year and didn’t take out a new one. The car was in “negative equity” though thankfully not by much, we just had to pay the difference.

Beagled · 29/02/2020 07:38

You can get a settlement figure for the car from the PCP company, go find a new car and see if their part ex offer will clear your finance. That’s what I did on my last one. As your only a year in it might not

SpiltMilk100 · 29/02/2020 08:09

Be aware that VTs are marked on your credit file

Mine isn't so that's not true.

It can be done OP but I very much doubt it would work out any cheaper for you, as you will most likely be in negative equity which will then get added to the new finance plan.

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