PCP - Options

[mcwharam]

I coming up to 22 months of owning the A6 from new. Things have changed quite a bit at home, wife and son have cars and daughter graduating Uni in the summer will be buying her own car. All I am using the car for at the moment is as a taxi, the odd trip away and the weekly shopping trip a mile down the road. It makes no sense both me and the wife having our own cars with twice the costs.

As such I am torn what to do with the car - does anyone know if after I have made over half of the total value of the car (new price) whether I can just hand it back as per HP agreements?

Secondly if I do decide to keep the car the 3 years and want to hand it back - do I have to return it to the supplying garage (Leeds to Crawley is a fair drive).

The third option and the one I am leaning towards (I think), is to pay off the outstanding amount and sell privately (less than 10k milage and the car is immaculate) or trade the car and the wife's car in and buy an A3/A4 to share.

Your thoughts appreciated.

Martin

 

[DrEskimo]

When you say PCH, do you mean Personal Contract Hire..?

This typically means leasing, where you pay an upfront amount, then a set amount each month over the term and just hand the car back. You have no choice of owning the car at any point.

Or do you mean PCP, where you put down money upfront, pay a set amount per month, and have a final ‘balloon’ payment at the end. You have the choice of handing the car back at the end, paying off the final payment and keeping the car, or trading the car in for a new deal.

Or finally is it a HP? Where you paid an upfront amount, pay a monthly amount, and then the car is yours once you have made the final payment?

All three will work quite differently when it comes to your options to settle early!

 

[mcwharam]

Sorry - yes it is PCP - through Audi finance. My balloon payment at the end of the 3 years is £15k, having put down the a substantial amount upfront my monthly payment is very low. I am approximately 5,000 miles under my allowed mileage.

Sorry for for the confusion caused

Martin

 

[DrEskimo]

Sorry - yes it is PCP - through Audi finance. My balloon payment at the end of the 3 years is £15k, having put down the a substantial amount upfront my monthly payment is very low. I am approximately 5,000 miles under my allowed mileage.

Sorry for for the confusion caused

Martin

No problem

Just wanted to make sure so I don’t give you wrong advice!

First thing to do is work out what your settlement is on the remaining finance, and what the rough trade in value is.

You can calculate the settlement by using an online calculator, but quickest way is just to ring Audi Finance with your reference number. It’s an automated service and takes only a few minutes.

Getting an accurate trade in value is little bit more tricky....sticking your reg into WeBuyAnyCar will give you a rough estimate. Then you could try something like Tootle.com (I used them and sold my 2yr old S5 through them for a good price) that advertises your car to dealers and they give you their best price.

If the trade in value is the same or more than the finance owed, then you get some money back, or if it’s less then you need to pay whatever additional money owed, called negative equity. Dont get too focused on the difference here though; work out the total amount you would have paid for the car and decide if that’s reasonable or not for the period you’ve owned it. Just becuase you have positive equity doesn’t mean you paid less than someone with negative equity. You just structured the loan differently.

It will all depend on the discount you got, the upfront payment you did, the length of the PCP and the GFV that was set.

Of course if you want to minimise your lost, you could look at private sale, but that gets a bit tricky in terms of settling the finance. Most don’t want the hassle and so you would need to settle it in full before advertising it, which requires funds and has risk if you don’t sell it...!

 

[mcwharam]

Dr Eskimo - thanks for taking the time to type out the above - really appreciate it.

Tootle is not something I have come across - so will have a look at that. I had planned on keeping the car for a long time, so the funds are there for the balloon payment - but with the wife's car coming up for replacing it just seems sensible to put the money into that instead of the A6 just sitting in the garage most of the week.

Thanks again for the reply - will have a look at the figures.

Martin

 

[Lee1977]

Martin,

You have said the wife’s is coming up for replacement could you not get rid of that and keep the A6?

Regards,
Lee

 

[mcwharam]

Lee - wife doesn't like to drive the A6 says its too big and hasn't got a proper handbrake and is petrified of damaging any part of the car (which I can appreciate). She will also be the main user of the new car. Her present car is an 8 year old 1.2 Corsa with 30K miles.

The new car will be an Audi - but will be a lot smaller than present as we no longer need that much space, I can count on the fingers on both hands the number of times the back seats have both been used.

Martin

 

[B5NUT]

Talk to your dealer about trading in your current A6 for something smaller like the A3.

 

[mcwharam]

Talk to your dealer about trading in your current A6 for something smaller like the A3.

Definitely an option, just got a settlement figure from Audi - which puts me in a strong position to shop around. To outright buy the car now and look at a competitive trade in the car has depreciated £5,500 in just shy of 2 years. Be interesting to see the figures the dealerships offer and also Tootle as mentioned above.

Martin

 

[Bristle Hound]

@mcwharam - Thread title changed to avoid confusion

 

[Shinsplintz 101]

Morning Martin,

With a PCP you have the option to Voluntarily Terminate (VT) without penalties once 50% of the finance is paid off - which since they front load interest is generally about 2/3rd the way through the finance period. As you're 22 months into a 36 month contract then your just about on the VT threshold, if you haven't crossed it already. Audi finance will be able to confirm this.

From what's been written above you have already decided to get rid of the A6 to be replaced by a smaller Audi. In that case you should get the strongest deal by PXing at a dealership as you have the leverage of a new sale - don't be shy about playing them off against each other either ( I had 3 Audi dealers trying to outbid each other for my business).

From the way you describe your personal financial situation above I think you'd be better off looking at a HP deal as you'd pay less interest on the loan amount.

Also approach your bank for a personal car finance quote. Halifax do them - it broke the dealers heart when I showed him the numbers. But Audi matched it & I saved thousands on my pcp deal.

All the best, Morgan

 

[mcwharam]

Thanks Morgan - some good advice there.

I had thought the A6 would be the car that I kept until I was unable to drive. I have a chronic neck condition which ultimately will leave me unable to drive after the next big operation, so the next car will be one that the wife loves rather than me. She is also sold on an Audi , so will seek a deal like this one now - the dealer/ finance contributions made this car exceptional value. So will probably do the same again and pay off the amount financed pretty quickly. I suspect in 6 or 7 years time she will have had enough of work, which will be when we up sticks and a warmer climate will be our destination (helps with the pain).

Thanks again for everyone's advice - been really helpful in answering all my questions. Mid April having 2 weeks touring Scotland so definitely keeping until the end of that.

Although not relevant to me - does anyone know if at the the end of the PCP if the car has to go back to the supplying garage.

Regards

Martin

 

[B5NUT]

If you end the PCP and don't trade the car in or pay off the balloon payment, then Audi finance come and collect the car, they will most likely use oen of the car Auction companies like BCA.

 

[Shinsplintz 101]

No - you can chop the car in at any dealer. The finance company will just want their money & won't care where you get it from.

 

[mcwharam]

Thanks again Martin

 

[Lee1977]

Martin - My wife was the same when I had a range rover sport but weirdly she thinks the A6 is fine!!, sounds like the A3 will be a good compromise, best of luck with whatever you choose to do.

Regards,
Lee

 

[mcwharam]

Well - finally got my act together and sorted out the next car. My A6 is now 26 months old and I have enjoyed every single one of the 12250 miles that I have been in it. Without a doubt the best car that I have ever owned.

Put a deposit on a pre registered Audi A3 1.5 TFSI cylinder on demand, Black edition in Mythos black. It comes with the Tech Pack, Comfort and Sound pack, Park Assist and the rear view camera. Additionally it has the Leather / Alacantra seats.

Enjoyed my time here - sure that I will still be catching up with your exploits, especially when the new A6 models start to filter through.

Martin