I'm already thinking ahead to the trade in and I haven't even got the car yet..!

brad9753

brad9753

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I have not got the car yet but I am still thinking about 3 years down the line when I come to get a new one and the finances behind it.
I don't remember the name of the figure but I understand that this figure combined with the cars worth come the change over (and what they pay me for it) will give me some money left over to put towards my next deposit hopefully. The dealer said it will be about £2000. Is this realistic or was he having me on, to get me to sign? (I am getting a SportBack Sport, Xenon Light package, Comfort Pack, Electric Folding mirrors- although I am told that these extras that people add; add next to nothing to the value in 3 years time?)
He also said I could expect a call at the 2 and a half year point, to enquire if I wanted to change over cars early. Would this mean that the money I could get for the next deposit would be more (seeing as the car would still be less than 3 years old and worth more)? Would trading in early be at all advantageous?

So what are peoples experiences? And any hints and tips to get the most for yourself? I intend for example to say I am strongly considering selling it privately myself, pay off the remainder finance and use the left over to go towards my next deposit (hopefully it would be more this way) and see what happens.

The reason I ask basically is because in 3 years I hope to join the real world and have a Mortgage and bills to pay. This makes my disposable income hard to calculate for 3 years time at the moment so I want to start to put aside £££ per month now in preparation. But no idea how much I will need really to match a similar deposit amount I have this time (£6000).
 
This is the first time Ive used PCP too, so I'm in a similar position to yourself. The figure you're referring to is the 'balloon payment' or 'final settlement figure'. I consulted around a few dealers and friends and yes, the idea is you should be left with a 'float' of a few thousand deposit to put towards another new car in 3 years time. Time will tell.

I took the very pragmatic approach that if the deal isn't good enough in 3 years time I will either hand the car back or settle the balloon payment and keep it. There are LOTS of pros and cons to PCP, and a lot depends on how long you intend to keep the car. The only optional extras that tend to affect the 2nd hand value is Sat Nav and sometimes leather, but there's no guarantee what you'll gain from them in 3 years time.
 
Brad. The good thing is you're already considering your finances for future so you're clearly switched on. Sounds like you're referring to whats known as the balloon payment, which is also the guaranteed minimum future value of the car. At the end of the agreed period, this is the minimum of what your car will be worth and also what you still owe, you tend to find what the dealer will give you is £2-£3 K above that, theoretically giving you a deposit of that amount for your next car. Of course, the book value of the car should be far more than what you are offered so i believe you can try to sell privately or even another garage, i'm sure i read that on another thread. I know of people who come out a year early but i'm not quite sure how the numbers work in that case, the car is for sure worth more but you also have to consider that you are coming out 12 payments early. I'm not qualified to give advice but i'm just sharing what i think I've picked up over the last few months. I have no problem with anyone correcting any of this if its wrong.
 
mjcourtney said:
This is the first time Ive used PCP too, so I'm in a similar position to yourself. The figure you're referring to is the 'balloon payment' or 'final settlement figure'. I consulted around a few dealers and friends and yes, the idea is you should be left with a 'float' of a few thousand deposit to put towards another new car in 3 years time. Time will tell.

I took the very pragmatic approach that if the deal isn't good enough in 3 years time I will either hand the car back or settle the balloon payment and keep it. There are LOTS of pros and cons to PCP, and a lot depends on how long you intend to keep the car. The only optional extras that tend to affect the 2nd hand value is Sat Nav and sometimes leather, but there's no guarantee what you'll gain from them in 3 years time.
Click to expand...

It does depend on the option. Some don't add any value, some add a bit - but you'll never recoup the same as what you spend on options. Sat Nav helps, metallic paint helps apparently, some others will be worthless. I don't tend to worry about it too much (as you can probably tell!) - I'm buying my car to drive, not to sell!
 
Given that I doubt they will have included any of my options in the final payment, and I think at least some of them will be worth something, I'll probably end up with a car worth a fair amount more than the final payment. I might not though. Either way I'm intending to make the final payment and keep it, but I'll have to wait and see - it could have so much stuff go wrong with it that I'm not interested in keeping it at the end, you never know! Hopefully not...
 
Brad,
as per your original question,
So what are peoples experiences? And any hints and tips to get the most for yourself? I intend for example to say I am strongly considering selling it privately myself, pay off the remainder finance and use the left over to go towards my next deposit (hopefully it would be more this way) and see what happens.

I have sold my last 3 cars privately within the last 3-6 months of the pcp time period, this has given me a far greater deposit for my next vehicle but i have also got the "safety blanket" from the dealer of an agreed trade in price at changeover time if i failed to sell it - so best of both worlds.

that is the plus side of a PCP in that it gives you options at the end of your agreed term.

Eitherway enjoy your new car.
 
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It may be worth selling private then. How much about the amount the dealer would offer towards the next deposit do you tend to get?
Only thing is you have to allign with the buyer the selling date with your pick up date of the new car ordered....hassle.......
 
Yeh, I had that issue, but a bonus from work means I can now pick up the new car before I have to sell the old one :)
 
Another alternative is to sell via one of the car buying website. Makes it easy to synchronize with buying the new one.

Also you could use a credit card or two as a bridging loan.
 
brad9753 said:
It may be worth selling private then. How much about the amount the dealer would offer towards the next deposit do you tend to get?
Only thing is you have to allign with the buyer the selling date with your pick up date of the new car ordered....hassle.......
Click to expand...

Too many variables to give you a good idea, depends on model,condition, to some extent optional extras, mileage etc, but have always managed to sell car for more privately than trading back with the dealer. Obviously this is the easy option as you drive in with the old car and out with the new one on collection day, i am lucky that there are 2 other cars in our household so we share driving as necessary for a short period, can be a pain but the extra cash in your pocket more than makes up for it.
 
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