16 March 2018 at 7:00 am #129859
I am currently coming to the end of my PCP deal on a Fiat 500, 5 months left, and am looking at my options for what to do at the end, or whether it is worth trading in early.
I am currently in negative equity, I have been told that this will likely be the case in 5 months still due to a high GFV on my car.
Due to circumstance changes over the years I have already gone over my mileage by 5500 and will likely do another 5000 miles before trading in, I have got some minor damage on my car (2 minor scratches and scuffed alloys mainly). I have come to the conclusion that if I had back my car I will face some heavy charges.
I don’t particularly have the funds to buy out my balloon payment.
To me, the option for me is likely to be to take out a new PCP (but be more aware of the extra charges this time!), but I read on your advice page that you would not advise adding negative equity to the PCP finance, I understand why this is but how would I avoid it ?
I have been looking at the new Renault Clio and currently the offers on that are very tempting, they have a high amount of dealer contribution which is offsetting the negative equity. I don’t know if Clio regularly has such offers on.
Is it an idea to change now, or do I risk waiting 5 months, paying off the last £700 of my finance, but risking value of car dropping further and not having such a good deal available? And how do I avoid adding in the negative equity?
Any help and recommendations would be very appreciated as I cannot work out which is the best route to limit any extra charges.
22 March 2018 at 10:05 am #130035
Hi Harriet. A finance deal with a large deposit contribution will help you to clear your negative equity now, but the reason they are offering large discounts is because the car is not selling sufficiently well at full price. That means that its final value is likely to be low, and you need to make sure you don’t end up in the same position next time around.
You can check out our opinion on the latest Renault Clio finance offers, and other manufacturer finance offers as well, on our finance hub.