Considering swapping MG4 for an MGS5 - Test Drive Thoughts.

[Loveclose]

I’m in a similar situation, with my loan amounts creeping up gradually over three or four PCP contracts, and now the residual value of my MG4 has nose dived!! I’m around 4.5k negative equity which I don’t see ever being resolved, which effectively puts 4.5k extra on any negotiated deal I make on a new purchase.

I can’t imagine a dealer wanting the car returned after three years with that amount of loss to sustain, so I’m hoping that deals will be significantly more negotiable at the end of the PCP deal than during……

That said, I really like the look of the S5 so I’m doing some ‘feasibility studies’……like you do…..

Every time I use the ‘feasibility study’ phrase at home, my wife of 40yrs rolls her eyes……

 

[Anon70]

now the residual value of my MG4

This is where someone selling a PCP agreement should be VERY clear on wording. It is not a residual value but it is a balloon payment or amount left on the finance agreement.

The future market value of a car can never be accurately predicted at the time of purchase.

The first car I bought on a PCP agreement was a Ford Ka (1st generation) at the end of the agreement the car was in negative equity so I just gave it back to the dealer and walked away so they could resolve the financial differences with Ford Finance.

 

[tsedge]

This is where someone selling a PCP agreement should be VERY clear on wording. It is not a residual value but it is a balloon payment or amount left on the finance agreement.

The future market value of a car can never be accurately predicted at the time of purchase.

The first car I bought on a PCP agreement was a Ford Ka (1st generation) at the end of the agreement the car was in negative equity so I just gave it back to the dealer and walked away so they could resolve the financial differences with Ford Finance.

I believe that the MG finance given by Santander isn't even a PCP agreement, it is essentially a loan with a large final payment, which has caused problems for people wanting to terminate early. It certainly wasn't made clear to me that this was the case (a new PCP scandal!?) - although I never have intended to terminate early, so it doesn't affect me.

Nothing stops people offering to buy their car back below the MGFV, but also the finance company may simply decide to put it through auction and not negotiate with their customers, even if they could get more by doing so.

 

[NickHeynes]

Don't forget that as long as you've paid off 50% or more of the total loan (inc the balloon)you can hand the car back ,subject to fair wear and tear. It might affect your credit rating a little.
This is something I'm considering , not because I don't like the car, just that there are better options available to me now than there were three yrs ago.

I've just checked and I'm around £2500 away from the 50% mark. So another 6mths should do it

 

[tsedge]

Don't forget that as long as you've paid off 50% or more of the total loan (inc the balloon)you can hand the car back ,subject to fair wear and tear. It might affect your credit rating a little.
This is something I'm considering , not because I don't like the car, just that there are better options available to me now than there were three yrs ago.

I've just checked and I'm around £2500 away from the 50% mark. So another 6mths should do it

It shouldn't affect your credit rating, but it will appear in your credit file, so future lenders may decline credit (of any type) if they see you have done this before.

 

[NickHeynes]

It shouldn't affect your credit rating, but it will appear in your credit file, so future lenders may decline credit (of any type) if they see you have done this before.

Hopefully , at age 61 with a credit score of 99 ( you can't get to 100 apparently) and no history of terminating early it shouldn't have an adverse effect. If it looks likely that it will I'll see the pcp out.

 

[tsedge]

Hopefully , at age 61 with a credit score of 99 ( you can't get to 100 apparently) and no history of terminating early it shouldn't have an adverse effect. If it looks likely that it will I'll see the pcp out.

I have no idea how likely this is to cause a problem, it may not at all, but this is the information I can find about it. I would imagine if it causes a problem, it would be most likely to be with a future car finance agreement.