Can you trade in a PCP car at anytime?

[Rallyaround]

I took out a small car on PCP a year ago. It’s only a 4 seater and due to me suddenly looking after my nephews as well as my boys I need a bigger car.
Question is can I trade in a PCP car after only one year?
I don’t want to go look at a car and seem like I don’t have a clue. I’ve never done finance a car on finance before this one so really not sure.

Yes. But the current balance that u owe on the car might be more that what it’s currently worth. So you’d need to pay that back or add it onto the finance of your next car (if you plan to PCP again).
You need to get a settlement figure from the finance company and take that with you when looking for the new car. The car dealership might offer to pay the full amount off.

Thanks for your reply. Is the final balance usually the payment total I e got left plus the balloon payment or minus the balloon payment? Thanks

Hiya.

Sometimes the settlement figure isn't the cheapest way of getting rid of the car. If you ring the finance company and ask to "voluntary terminate" your agreement they will give you a quote. A voluntary termination basically means once you've paid up to the half way mark of your finance you can just give the car back. Sometimes this is less than the remaining settlement. I would get quotes for both if I were you. Z

Did you get it from a dealer? Go back to them and explain the situation.

Was it a brand new car? Cars depreciate an awful lot in the first year so they may say you have to pay a significant amount to end the contract. They expect a certain amount of money over the life of the contract and need to ensure that money is made/no loss if you end early.

Say you purchased the car for 20k. In the first year it losses 5k and is now worth 15k, they need that 15k plus profit. If you have only paid 2k, there will be 3k (plus any costs, charges, profit) that they are expecting. As above, some places want half of outstanding rentals.

You need to know what the car is worth so they don't mug you off. Best way to do that is search "sell your car to Arnold Clark" enter the reg and mileage. Use that as your base figure when feeling with them.

Dealing with them! Don't feel them!

Sorry I don’t know about the balloon payment. I haven’t had a finance car myself. My friend was getting a new car and the garage themselves phoned the finance company for the figure to end the agreement. They were happy to pay this full amount for her car.

Ok thanks. I’ll phone the finance company Monday to see what they say. It was a brand new car but I was looking for something older but bigger to change it to.
I’ve had two previous cars which I paid in full so the finance thing with pcp really confuses me.

Let us know what they say Monday!

Yeah so I got rid of my brand new car earlier this year before lockdown. I just paid to get the payments half way and they took the car back. Otherwise you have to pay the settlement figure but then you keep the car and can sell it afterwards so it depends really what you want from it. The settlement figure does include the balloon payment.

If you aren't keeping the car and you just want out of the agreement I'd ask for a voluntary termination. It will be much cheaper and easier. They collect from your house and you don't have to do anything.

Voluntary termination after only a year is likely to be expensive. If you got the car from a main dealer using their finance company it's probably also worth talking to them to see what they advise as they will have come across this situation many times.

I'm sure something can be done but it's not likely to be cheap. It could be that you can either pay up to half the price of the car and give it back, or pay for the full price of the car and keep it, so it is yours to sell privately, or the dealer will facilitate the swap and make all the adjustments to what you are paying if they have a suitable used car you could buy.

Talk to the dealer as well as the finance company is what I meant to say.

My understanding is that you can't, I thought you had to wait until you had paid of a certain sum of the finance (I can't remember if it was 1/2 or 2/3) but that said we didn't trade in directly we wanted to sell and pay off the finance and didn't want a new car immediately, so maybe that's why we had to be at a certain stage of the finance.

I used to work in one of these finance companies. To voluntarily terminate and not be liable to make any more payment on a PCP agreement, you need to have paid the halves amount and I don’t think you’ll be near that amount yet as you’ve only had the car for one year.
When you call the finance company, ask for the halves amount and the amount you have left for reach that amount and if you can afford to pay it, then you can pay it and give them the car back.
Otherwise, ask for the settlement figure (the balloon payment plus everything you have left to pay less some interest rebate) which you can take to the new dealership. If they are willing to pay the settlement figure for your car then that will be cheaper for you as you’ll just give the dealer the car and they pay the rest of the finance for you. You can then enter a new arrangement for the new car you want.

We did just that.
Got one in November 2018 and then changed it for a different one Feb 2020.
Then Covid...

Did you call them?