Audi finance PCP (UK) question

No the mileage is not checked annually mate.

At the end of your PCP agreement, you will have 3 options; pay the final payment and own the car outright, sell the car/trade the car in to any dealership or company (WeBuyAnyCar, etc.) or just hand the car back. It's only the third option of handing the car back where you will get charged any additional charges.

Obviously if you pay the final payment mileage is irrelevant. To a certain degree, its irrelevant if you sell/trade the car in, but keep in mind the amount will be dependent on its mileage. The predicted amount (your guaranteed future value (GFV)) is based on the mileage limit you set at the start, so if you do more or less than that, it will be higher/lower.

There is only really one instance where you would just hand the car back, and that's if the car is worth a good deal less than the final payment. This is arguably one big positive of PCP.

HTH

orcomma said:

Thanks DrEskimo... so even though they covenant they can charge if I go over my annual mileage in "any 12 month period" - it is not routinely enforced? And at the end, if I pay the final figure, they don't enforce either?

It sounds watertight in the agreement, but there's no detail on how they could enforce it without some sort of telematics (or a dealership service report being sent to them - and an excess mileage bill landing on my doormat a few days after)

Click to expand...

No mileage is not checked throughout the agreement on a yearly basis. I'm 18months into my 24month agreement and it's never been asked. Although I am much lower than my annual limit, so maybe if I was over and they saw it at the service, they might of said something...? Highly highly doubt it though!

It's not that they don't enforce it if you chose to pay the final payment, or sell/trade the car in for what its worth (which will be dependent on age and mileage), it's just that it no longer becomes applicable. You are 'paying' for it by paying a final payment that is higher than the car car my necessarily be worth. When you do finally sell it, you will obviously get less as the car has more mileage.

Similar to if you sell/trade it in. Your sale/trade in price will be less due to the higher mileage.

The only reason they ask for excess mileage charge if you hand it back, is because your finance has been on the basis of X miles. If you stipulated more at the beginning, you would of paid more over the term. It's just a way to reflect the true cost. Sometimes the excess mileage costs are cheaper than starting higher miles though. This is often discussed on lease deals, where you have to hand the car back at the end, so excess mileage charges always apply.

But again, its unlikely you will ever just hand the car back on a PCP. Audi's don't tend to be worth thousands less than the predicted value, typically its a little bit more. So its in your interest to sell it and pocket the 'equity'.

The only figure that matters is the mileage after your 3 or 4 year term. The only reason it's set annually is that that's the figure most people can reasonable accurately predict. It's then used to work out the overall number at the end of the term. The yearly mileage figure is of no relevance to the dealer at all.