Mazda PCP with 4-5 months left

[Steve]

Good morning. I took out a PCP on Mazda 6 Sport back in August 2014, which is due to expire with last payment in July 2017. The GFV of the vehicle is £3500 and the current settlement figure is £4100. I have also currently exceeded the mileage allowance by 11,000 miles so far at 14.9p/pm (+VAT) penalty for that. This puts me at a massive negative equity situation and the dealer has valued the car at £2500.

Is my best option to pay the settlement figure the month before the last payment is due to get that as low as possible? I figure I am not going to get out of the negative equity as the GFV will be under £2000 by the time I get to July.

Any advice would be appreciated.

Regards

Steve.

[Stuart Masson]

Hi Steve. The GFV (balloon) will not change, so it will still be £3,500 in July rather than <£2,000. You can settle the finance anytime between now and January without it affecting things very much. £4,100 now is probably going to be a bit less than £3,500 in July plus your next few monthly payments, but there is not likely to be much in it. The car's value is unlikely to change massively in that time either, since it's only a few months away. It's pointless giving it back to the finance company with your excess mileage as you will get a bill for about £2,000 anyway.

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