[nickcuprar]

Can you use a car in negative equity on HP for a px on a pcp? I.e. Add it to the vehicle?

I'm guessing not but can't be sure

[NotGotABimmer23]

Originally Posted by nickcuprar

Can you use a car in negative equity on HP for a px on a pcp? I.e. Add it to the vehicle?

I'm guessing not but can't be sure

I don't see why not. Can certainly do it from a pcp, not sure why hp would be any different.

[KCH1984]

If buying new, the dealer will likely use up some of the contribution / discount available to clear off the negative equity and you'd start a new PCP deal afresh.

If buying used, you'd like see the negative equity financed separately in the form of a top-up loan that would run alongside your PCP deal.

I've used both options in the past - but as others will tell you, negotiate figures on your new deal first before building in the negative so you can see exactly the effect it's having.

[Sasquartch]

It will depend on the circumstances. Depending on how much you've paid you might be able to VT

However, if not, you're simply starting off with even more negative equity.

Youll probably have to put a reasonable sum in to get things back on track.

Unless you keep for the term of the loan you are always likely to be in neg-eq before the end.

[nickcuprar]

Thanks all,

The situation we are in with Mrs car

Car loan currently £6900 personal loan not Hp (Just realised)
Current Car valued at £4850
Negative equity £2050
Current repayment £255pcm and 20 months into a 48 month repayment.


Option 1 - do nothing keep car and carry on untill End of term.

Option 2 - take the hit now, look to buy a used car around 5k add on the negative equity,

Option 3 - wait untill in equity then look to swap about 10 months time.

Reason for change is current car is a gas guzzler scirocco, high tax. MOT tax and service all due at Christmas. Est (£550)

Looking to swap into a 1.0 Eco boost fiesta. We have spoken to Ford who can do a pcp with the negative equity and gets payments down to around £240 but over another 48 months which I'm not keen on.

So that's a £20pcm month saving plus MOT a years tax and service at Christmas.

Do we just keep to the term or trade in and take the hit??

Also the other factor is my current company car F31 we will buy buying in 3 years time. So will be selling the current car or the Ford in 36 months.......


Any advice is appreciated I'm leaning to number 1 at the moment

[Sasquartch]

Originally Posted by nickcuprar

Reason for change is current car is a gas guzzler scirocco, high tax. MOT tax and service all due at Christmas. Est (£550)

But any new car you get will need servicing even if low tax.

Sounds like you're going to be much better off keeping the Scirocco (and enjoying it far more than a Fiesta) and waiting until the loan ends

Its rarely a good idea to take a car on a 4 year term, it might get the payments down but everyone I know has wanted to get out early. Which PCP or any loan really isn't designed to do, as the repayment curve and depreciation curve go in opposite directions

[KCH1984]

Is the £4,850 your trade-in price with Ford?

If you don't need to sell urgently, which it doesn't sound like you do, then I'd potentially look to test the private market - if you've got a personal loan I'm assuming this isn't secured against the car, so you should be ok from a HPI check perspective.

Scirocco likely to be a fairly desirable car, and it's at the right price point not to worry a cash buyer.

[Nobby Clark]

Originally Posted by Sasquartch

Its rarely a good idea to take a car on a 4 year term, it might get the payments down but everyone I know has wanted to get out early.

why?

[dbramley]

If I'm reading it right you are happy to lose over £2000 to save paying £500 to service, Mot etc.

Why not pay the tax monthly and that would save paying out in one go. Put you car in for MOT as early as possible and all being well should only cost £40 test price.

Is there an option to refinance current loan to get a lower APR or are you already on a good deal?

[HighlandPete]

Originally Posted by nickcuprar

Thanks all,

Car loan currently £6900 personal loan not Hp (Just realised)
Current Car valued at £4850
Negative equity £2050
Current repayment £255pcm and 20 months into a 48 month repayment.

I'm assuming the £6900 is the settlement figure, to pay off the loan?

Depreciation should level off over the next period, making more sense to keep the car and enjoy, IMO. Losing £2000 into 'massaged figures' is a lot of extra fuel.

[MrChumley]

Option 3 seems sensible to me. Why borrow more money to buy negative equity?

[Sasquartch]

Originally Posted by Nobby Clark

why?

Of course this is a generalisation and everyone is different

But 4 years is a long time for some people and many simply want to change earlier, either because circumstances have changed or they simply want something different. Also with most cars having a 3 year warranty there's extra expense or risk in the fourth year which might encourage an early change. And most salesman know all this and will encourage you to 'come in for a chat'

This is from a dealership business manager so I'm assuming he knows what he's talking about

[GEP77]

Also remember that tax on a new car is now a flat £140 a year, barring exceptions that won't apply in the case of a fiesta.

When you say gas guzzler, how many miles do you actually do? A fiesta ecoboost will be in the mid to upper 40s for most people. Using myself as an example, I've just gone from a 335d to a 440i and based on current usage it would take me somewhere in the region of 100,000 miles to spend an extra £2000 on fuel.

As for servicing, you'd have to do this on any car you buy. If cost is an issue find a good independent to look after it.

[nickcuprar]

Originally Posted by dbramley

If I'm reading it right you are happy to lose over £2000 to save paying £500 to service, Mot etc.

Why not pay the tax monthly and that would save paying out in one go. Put you car in for MOT as early as possible and all being well should only cost £40 test price.

Is there an option to refinance current loan to get a lower APR or are you already on a good deal?

The tax on the eco boost would be free and the saving in insurance and fuel along with servicing MoT etc. It's about the same over the term but I agree it's not that sensible!

[nickcuprar]

Originally Posted by MrChumley

Option 3 seems sensible to me. Why borrow more money to buy negative equity?

This is the conclusion we have now arrived at.

I think we are going to pay the car off over the next 27 months.

[nickcuprar]

Thanks for all your advice.

We currently sit at £2k negative equity. In 27 months the loan can be paid off and the value of the car at 10 years old with around 120k miles with FSH and hopefully still in great condition for age will be around 3-4 k

That's a swing of 5k minus running cost saving which we would lose on increased APR on the deal/higher negative eq

After sleeping on it this is the only option that makes sense.

Thanks for making me see sense and not get drawn into typical car dealer sales shite

[nickcuprar]

Originally Posted by Nobby Clark

why?

To be fair,

A lot of friends my age (26) do longer terms to get payments down. 4 years at my age is a lifetime really,

Work changes, people get or want mortgages, have kids. Get Married. 4 years if your settled at 40 is fine.

OHs brother just got a corsa on HP over 5 years and he's my age. I winced!