I'm coming up to the end of 3 years pcp on my twinair 105 S so went into the dealer's to talk about updating.
We talked about what was available but when it got round to trade in talk they offered me £5000. The trouble is there will be £6250 left to pay in May when the 3yr deal ends. This is the 2nd twinair I've had and both have been on PCP. After the first one I had £2200 left in the car for a deposit. I specifically told the dealer that I wanted to carry over the deposit to the end of this contract but I'm at -£1200. So including the deposit lost I'm £3400 down. Has this happened to anyone else?
I was a bit shocked and when I questioned it they stuck with £5k. I checked we buy any car when I got home and even they were offering £5500. Also there is only 1 twinair 105 for less than £8k on auto trader.
I'm a bit dumb founded has anyone got any suggestions?
Cheers
Matt

Hi Matt,

Bit confused about all the figures to be honest, haha!

What is the balloon payment for your car? That will be your final payment if you decide to buy your car outright and is also its guaranteed minimum future value.

Is your car definitely on a 3yr deal or was the new one set up on a 4yr deal maybe? Unless I am missing something, I don't see how you would still have money to pay at the end due to its minimum guaranteed value. At worst you should have a zero balance to put towards your next car.

The guaranteed minimum value is based on mileage being within the pcp agreement and the vehicle condition being no worse than fair wear and tear for vehicle age.

Travellingmatt said:

We talked about what was available but when it got round to trade in talk they offered me £5000.

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Perhaps the surrealistic low depreciation bubble the 500 has lived in since launch has finally burst.

Travellingmatt said:

I'm a bit dumb founded has anyone got any suggestions?

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Trading your existing car in to this dealer isn't going to be a good option for you.

You can just hand the car back at the end of the pcp agreement and start again. You have no equity in the car and will need to find any deposit required for the next agreeement from your own funds, but if you have kept to all the terms of the agreement, you shouldn't have anything further to pay.

As said before, if it isn't in showroom used condition and within the agreed mileage, you'll have to pay a surcharge. If you do hand it back, the pcp provider's inspection standards are likely to be strictly applied. You should already have a copy of these, but if you don't, now would be a good time to request or download one.

If you can find someone prepared to pay more than £6250 for it, you could also sell the car privately at the end of the agreement. The person buying it pays the balloon payment to the finance company and the balance to you. I've bought a vehicle this way before and it can work well for both parties.

Another option is to pay the £6250 and keep the car; this is only worth doing if you think the car is worth that much to you and you want to keep it for at least a couple of years. Paying the final payment with borrowed money in the hope of selling the car privately for more shortly thereafter is usually a losing strategy.

You could always try another dealer - you may find one that's prepared to offer you more, but remember that you'll usually be able to negotiate a significant discount on your next car if you have no trade-in.

Your next job is probably to work out if you are likely to pay a surcharge if you return the car. You might find this checklist helpful. Pay particular attention to the notes which help you to understand the criteria they will be inspecting it against; their interpretation of "fair wear and tear" may be different to yours.

Cars which have been involved in an accident and repaired during the term of the pcp can be particularly troublesome and if your vehicle falls into this category, it might be worth paying for an independent professional assessment before returning the car.

Travellingmatt said:

Also there is only 1 twinair 105 for less than £8k on auto trader.

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That's the difference between buying and selling.

Anyone paying £8k+ for a 3yr old 105TA is going to lose at least £2k the moment they drive it away.

Sorry for the delay, and thanks for the replies!
jrkitching I think you are right about the depreciation bubble and thank you for the checklist.

I think I'm going to check another couple of dealers, if they can get closer to the settlement figure it may work out the best to go.

It's a shame as I've really loved the car (well both of the twinairs)

It pays to shop around. I was being offered (by a dealer and by a buy your car service) $7k for my trouble plagued VW, eventually got $16k in PX for a new Renault.

If you love the car then I'd say keep it and pay the balloon, another car, even a new one is always a bit of a gamble. Despite how they make the monthly payment look it's never cheap either.