[Closed] Another PCP question

I think you can challenge it if thier valuation is below some arbitrary market valuation, it’s lengthy and costly though.

I had to go through something similar when I owned an M3 Conv that met with an incident involving a forklift, Beemer offered something like £3k below market valuation despite the car being 16weeks old and 3k on the clock.

It was a long time ago, things may have changed but IIRC I had to get an independent valuation from my insurance company and it cost me £250 for two hours walking around with a pen and pad..

can I just check I understand the question?

if you wanted to keep your current car you need to pay £9987 for it.

But you are thinking about effectively trading it in for a different car, and you want to ensure that you get a fair valuation for it as a trade in, and you consider a fair valuation to be £11000-£12500?

If I have understood correctly then its just the same as buying any car when trading in an old one, if you dont like the overall deal go somewhere else and try and get a better one.

you dont have to go to  the dealer you bought this one from, you can go anywhere, with a dealer for any marque, new or secondhand.

Essentially you need to view it like this, you have a car that still has finance owing on it (£9987), when you trade it for a new one, the dealer you are buying from will (hopefully - if they think its worth more than £9987) clear the finance and put any extra against the new car.

The difference is that you have a time deadline within which you either need to:-

1. give the car back

or

2. Pay off the remaining finance (either yourself to buy more time to shop around or keep the car, or from another dealer as part of a trade in).

If it really is worth £11000-£12500 , then you shouldnt just hand it back as you would be losing money, you should at the very least pay off the finance, then sell the car for £12500.

if the car is actually worth less than £9987 then just give it back without paying off the finance.

the £9987 is not BMW's valuation of the car, it is just what you owe in out standing finance on the car. Their valuation will vary depending on what you want to trade it in against, and it will vary from dealer to dealer just like trading in any second hand car.

The final payment isn’t their valuation is it? It’s just the figure required to buy the car and clear the finance. You don’t have to use the same dealer to buy another car - any dealer will be happy to offer you a trade-in to clear the balloon payment - they’ll take the car off your hands, clear the finance and any profit can be used to put a deposit down on a new car. Any dealer will be able to find out what the balloon payment is btw - it won’t be a secret so you just have to negotiate the best trade-in that you can.

negotiate the best trade-in that you can

Which is where I thought it was going - its up to me to negotiate an increase on the trade in value, or money of a new vehicle.  I appreciate it doesn't have to be the same dealer.  I guess at that point in time it helps to have evidence of similar cars going for sale.

This PCP thing is a trap though, you really have plumped up ones ego once on the new car ladder, and have to drop it to get of the PCP and revert to second hand like normal people 😀

So, my PCP is ending and I’ve had the letter.  My car that has a final payment of £9,987 seems to be valued at around £11000 – £12500 depending on where you look.

Where are you getting the value of £11,000-£12,500 from?

A lengthy search through various websites including autotrader, for cars on offer that match the spec, age and milage of mine.  I appreciate those aren't the "sold" prices.

A What Car valuation put it at £10,464 trade-in at "Good" condition although I'd argue its better than that, but is a little low spec - no Sat nav which became standard a year later.

You need to look at the ‘trade value’ on the likes of Parker’s and What Car. Not the private or dealer sale values. The trade value is what you’ll likely get if you part ex it. Probably the best bet for a value is WeBuyAnyCar. If the WBAC amount is more than the finance settlement amount, settle the finance and sell it to WBAC for the easiest life.

If you want to maximise your return, settle the finance and sell it privately and in no rush.

its up to me to negotiate an increase on the trade in value, or money of a new vehicle.  I appreciate it doesn’t have to be the same dealer.  I guess at that point in time it helps to have evidence of similar cars going for sale.

So you are asking how best to negotiate when buying a car?

Its not clear from your posts as to whether you are confused about what the £9986 figure is. Its not a trade in value, its the amount of money you need to pay if you want to own the car, usually it ends up being quite close to the real trade in value of the car, and your whatcar trade in price alludes to that, but the only real way to get a real trade in price is to find a car you want and start negotiating, I suspect a dealer would offer you below the what car figure, but it really depends on how much margin he has to play with on the car you are buying.

trade in price is misleading anyway, the only number that matters is the cost to change. a dealer selling an overpriced car can (and will) offer you a high trade in price for your car.

The only way to negotiate when buying a car is to go to various dealers and play them off against each other, its a time consuming and tedious game, but its the only way to get a decent deal.

Agree with the first part of bensales post, don't look at cars for sale as a guide to what you'll get part ex. From what I have experienced over the years with cars around £10k is that you'll get offered £9k px, could sell it yourself for £10k and would expect to pay £11k at a garage. By the sound of it you are mixing up what you would have to pay at a dealer for your car with what they will give you. Saying that I'd imagine the dealer will have some tasty offers, including a decent trade in to tempt you in to a new motor.

Where I don't agree is using WBAC for either valuation or to sell. They offer rock bottom prices and do not represent the true value of the car.

Oh, and what julians said.

Forget about the car as such, you owe the finance company £9,987.  The company you bought the car off have said they will give you £9,987 at minimum to pay the finance off, but to do that the car is then there’s.

If they are feeling very generous they may give you a bit more.

In essence you have leased a car nothing more.

PCP are there to try and tie you in with that dealer.  Let’s say your car was only now worth £5k on the open market, you signed a contract where the company said they would have to give you

Bloody stupid forum formatting again !

£9,987.  The place where you bought the car have to give you £9,987 any other dealer can give you whatever they think the car is worth

shop around and see who is cheapest at getting you in a new car.

I cant believe you took out a PCP without understanding it though !

So the balloon payment is called a “guaranteed future value” or GFV.  It’s marketing spiel basically.  It’s what you owe if you want to buy the car.  It’s also what’s needed to be settled as part of a part exchange deal.  You are not locked into new cars, if you want to switch to used it’s simple, the garage will call the finance company for a full and final settlement and take it from there.

In terms of trade in valuation, I’m happy to help you if you want a completely impartial valuation.  I suspect though if you have used autotrader or Parker’s you will be WAY off the valuation, especially if your car does not have certain options such as sat nav.  Drop me a PM if you want some assistance or guidance, 18 years in the trade including selling pcp’s, running dealership sales and now working for the worlds largest auction company! Happy to help a Singletrack user so you are informed when doing into the dealership.

Just echoing  as others have said,

You took out a PCP so should of known that your final payment was going to be the £9k. This gives you the option to

a)hand car back and walk away withput paying £9k

b)buy the car at £9k (rather than the £12k its worth)

c) trade the car in against any other car anywhere, where you are hoping  the dealer will give you more than the £9k you owe.

If you are trading it in dont fixate on trade in value, look at cost to change. I have just done all this, my pcp due was 12k, got 18k as trade in allowance (or 6k deposit against new car). Others offered 15k, one even 19k but then they offered different discounts against the new car. If car is 25k you may get, say a 2k discount off new car price and 10k trade in price, 12k total. Other garage may give you only 9k trade in but 3.5k discount which is actually the better deal dispite the apparent lower trade in value. Others offer cheaper finance too so you need to consider this cost too. Mine gave me minimal discount but zero % finance which was a better saving than the discount they previously offered me.  The dealer i had the car with originally could not match this deal dispite offering the best trade in allowance, so i changed dealer.

<div class="bbp-reply-author">FunkyDunc
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Bloody stupid forum formatting again !

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£9,987.  The place where you bought the car have to give you £9,987 any other dealer can give you whatever they think the car is worth

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Its not the dealer who give the guarantee, it’s the finance house. The supplying dealer doesn’t have to take it back or value it at that (although they nearly always will).

Kryton: from experience, I’d expect a trade in value on that kind of price car to be about £1,500 less than what you’re seeing them for sale at a dealer - all things being equal.

Thanks

I do know what I'm doing, I'm just wondering the best way to negotiate/prove any equity, should there be some.