Yet another PCP Query… I think I've been lied to by a car salesman :)

TCE home 2021 Forums Car finance Yet another PCP Query… I think I've been lied to by a car salesman :)

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    • #150484

      I’ll try and keep this to the facts, and just want people’s opinion really.

      – Got a car worth £25k on PCP over 4 years. Including interest, total payments are £28k
      – Paid £4500 in deposit
      – After 4 years the balloon payment is £8950

      Spoke to the garage where I got it, and the salesman says there is no equity left. So, he’s telling me that after paying a £4.5k deposit, and paying it off over 4 years, I have completely broken even?

      With my limited knowledge of finance and PCP, my quick calculations say:
      – The car is worth approx. on £14-16k (and that’s being conservative really).
      – If I paid the balloon payment and sold the car myself, I would have plenty of money for a down-payment for another car. Potentially 4-6k.

      I was led to believe, by said salesman, that when I took out the PCP I would expect some equity to be left, which could then be used as a deposit for my next car.
      Speaking to the same salesman (and without him even checking) said “oh no, you just hand it back to us and start a new agreement”.

      Please could people let me know where my maths/finance skills have gone awry?
      Can I go to any other dealer and ask if they will part exchange, even while the PCP is still ongoing?
      Can BMW really stop you paying for the balloon payment with a 0% credit card?? This sounds VERY VERY dodgy to me.


    • #150996
      Stuart Masson

      Hi Lard. Clearly there is some variance between your opinion of your car’s value and the dealer’s.

      If you bought a £28K four years ago, it almost certainly won’t be worth £14-16K now. £8,950 sounds about right, give or take.

      Get a valuation from somewhere like We Buy Any Car (or similar), as that will give you a realistic indication of your car’s market value.

      You can part-exchange your car with any dealership from any brand. The dealer where you are buying your next car will handle the settlement of your current finance agreement as part of the whole deal.

      I don’t think a finance company can tell you how you can pay off your balloon. If you want to put it on your credit card, that should be fine. At best, they can charge you any credit card fees they incur.

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