Settling PCP, need advice

dnme

Dear all,

I'm in a bit of a dilemma at the moment and thought I might run this one past any folks here who might be in the trade or who may be able to offer any advice.

Without going into detail, I currently have a new car on pcp. All is going great and I love the car. The pcp has 7 months to run before I have to decide whether to buy, hand back to trade up. However it has now transpired that the monthly repayment is affecting my ability to get a mortgage. So I rang the underwriter and asked them for a settlement figure which is just under 15k. I would consider buying out the pcp and then selling the car privately. Currently there is a bit of equity in it as it is worth around 20k.

However, buying out the pcp, will eat up most of my savings. I reckon I might struggle to sell something privately for that kind a money. I figure that people who are spending 20k will predominantly do so via finance and therefore go the dealer route rather than paying someone privately.

• Am I right in thinking it might be difficult to sell a car of that value privately ?
• Would you advise for or against buying it out now ?

Many thanks for any help.

bazz26

What type car is it?

Atlantic Dawn

Would hand back at end and buy something for €3k or so not make most sense? It could take months to sell something at €15k and if it's anything heavily promoted on PCP with scrappage at the moment there will be little or no market for it.

Don't think it matters a lot what car it is?


Either way, you're correct OP; you may well sell the car privately, but you definitely will struggle to do so. People don't like to spend that kinda cash in a private manner as there are too many horror stories out there and understandably, no one wants to buy a car that turns out it was stolen, or some other stuff.

If you are selling it at a good price you may get interest, but again, will be a while before you actually flog it.


The house buying process can be a lengthy one. Assuming you haven't already got your bags packed and are pleading with the bank over the house of your dreams, would it make more sense to take a few deep breaths, realise that ultimately you're not doing too bad, and see the next 7 months out, finishing the PCP in the process, and saving to counter-balance the cost of the final baloon payment to purchase the car outright.


I'd imagine this will leave you more financially stable than what sounds like the bit of a knee-jerk reaction you're having, to panic and get rid of the PCP and the car as soon as possible to try and claw back as much as you can.

bazz26

What car it is could determine how easy or hard it might be to sell it privately.

The_Honeybadger

It comes down to what is more important to you, the car or the mortgage. In 7 months you have three choices:

• Buy out the pcp, keep the car and start saving hard for your mortgage deposit
• Buy out the pcp and try to sell privately and hopefully come away with some change
• Hand back the car and buy a cheap used motor

Buying out the pcp and trying to sell privately to unlock your equity is not adviseable imo, there is a thread on here recently started by a guy who can't figure out why his mint 2011 a4 isn't getting any interest for €14k despite being significantly cheaper than the dealers. You may feel your car is worth €20k but getting it is another matter. Do you really want the hassle.

Atlantic Dawn

Atlantic Dawn wrote: »

Would hand back at end and buy something for €3k or so not make most sense?.

Handing back the car is the last resort option on pcp as it means you lose a lot of money. If the car is worth 20k and the op hands it back he gets nothing then buys a car for 3k he is down 8k.

Its very annoying the way banks are doing this as the day after you draw down your mortgage you could start a new pcp and there isn't a thing the bank could do about it.

The_Honeybadger

Emmett Tinkling Snorkel wrote: »

Handing back the car is the last resort option on pcp as it means you lose a lot of money. If the car is worth 20k and the op hands it back he gets nothing then buys a car for 3k he is down 8k.

Its very annoying the way banks are doing this as the day after you draw down your mortgage you could start a new pcp and there isn't a thing the bank could do about it.

Is the car worth 20k though? It may be in theory, hard to tell without details but getting a private buyer to hand over 20k without a warranty will not be easy.

As for the banks, the car is a major personal liability for the op and they are perfectly entitled to take it into consideration when assessing their mortgage application.

kdevitt

Why not advertise it for sale now, see if anyone bites at your required asking price. Plenty of people spend big money on private sales - they can generally still finance it, just not with secured finance.

If someone does go ahead, be clear its under finance, and you can have them make out part of the payment directly to the finance company you have the PCP with, with the balance going to you.

grogi

mickeyk wrote: »

Is the car worth 20k though? It may be in theory, hard to tell without details but getting a private buyer to hand over 20k without a warranty will not be easy.

It is a 2.5year car. Surely it has warranty...

Atlantic Dawn

grogi wrote: »

It is a 2.5year car. Surely it has warranty...

2 years is the legal minimum on a new car, plenty of manufacturers still only offer this.

grogi

Atlantic Dawn wrote: »

2 years is the legal minimum on a new car, plenty of manufacturers still only offer this.

Another ghost... There's no legal requirement for warranty... Warranty is a thing that the manufacturer/importer provide voluntarily. Well - kind of... Market pushes for it - without warranty nobody would buy... Statuary rights (fulfilled by the dealer) have nothing to do with warranty.

Anyway, who is offering less than 3 years these days?

Atlantic Dawn

grogi wrote: »

Another ghost... There's no legal requirement for warranty... Warranty is a thing that the manufacturer/importer provide voluntarily. Well - kind of... Market pushes for it - without warranty nobody would buy... Statuary rights (fulfilled by the dealer) have nothing to do with warranty.

Anyway, who is offering less than 3 years these days?

For a brand new car there is a legal requirement for a car sold to have a 2 year manufacturer warranty, that is EU law, look it up.

dnme

Some sound advice up there, I'm grateful for the contributions.

I'm in no great hurry at all and the reason for this post is just to get as much info into my head as I can. From talking to others, I reckon I'm gonna struggle to sell such a car privately. I think I will wait out the 7 months and probably suffer the walk away loss. I may well go back to a beloved 98 Corolla for a year or two to allow me a bit of scope. I had a chat with another bank today who would be willing to loan me more or less what I am after right now anyway so its another option.

For now I'm gonna sit tight. I'm genuinely in no great hurry.

grogi

Atlantic Dawn wrote: »

For a brand new car there is a legal requirement for a car sold to have a 2 year manufacturer warranty, that is EU law, look it up.

You mean 1999/44/EC? That's very common misconception, but there is not...

Effectively it is enforceable for 8 months from the date of delivery of goods, later becomes virtually irrelevant.

Atlantic Dawn

grogi wrote: »

You mean 1999/44/EC? That's very common misconception, but there is not...

Effectively it is enforceable for 8 months from the date of delivery of goods, later becomes virtually irrelevant.

Ok, find me 1 new car on sale in Ireland that does not have a warranty of 2 years or more.

grogi

Atlantic Dawn wrote: »

Ok, find me 1 new car on sale in Ireland that does not have a warranty of 2 years or more.

I've asked the same question before...

grogi wrote: »

Another ghost... There's no legal requirement for warranty... Warranty is a thing that the manufacturer/importer provide voluntarily. Well - kind of... Market pushes for it - without warranty nobody would buy... Statuary rights (fulfilled by the dealer) have nothing to do with warranty.

Anyway, who is offering less than 3 years these days?