Dilemma MG4 needs swapping

[retrobloke]

Hi All
Anyone else having financial problem sorting out a new car.
My dilemma is negative equity ( totally horrendous values) with 3 year old MG4 on PCP Finance. I cannot get a deal that is anywhere
Near what I am paying now.
It’s 3 years into a 4 year contract and not sure if I can hand it back?
Would leasing be anyway of getting out of the problem.
Any thoughts or help would be gratefully received
Neil

 

[gary333]

Hi All
Anyone else having financial problem sorting out a new car.
My dilemma is negative equity ( totally horrendous values) with 3 year old MG4 on PCP Finance. I cannot get a deal that is anywhere
Near what I am paying now.
It’s 3 years into a 4 year contract and not sure if I can hand it back?
Would leasing be anyway of getting out of the problem.
Any thoughts or help would be gratefully received
Neil

If it’s in negative equity why not just give it back when the PCP is up? You can voluntarily terminate a PCP agreement when half the balance is paid up which dependent on how you structured the finance could be around now.

Are you saying you can’t afford car and that’s why you are wanting to escape the finance, or something else?

 

[Tig170]

Hi All
Anyone else having financial problem sorting out a new car.
My dilemma is negative equity ( totally horrendous values) with 3 year old MG4 on PCP Finance. I cannot get a deal that is anywhere
Near what I am paying now.
It’s 3 years into a 4 year contract and not sure if I can hand it back?
Would leasing be anyway of getting out of the problem.
Any thoughts or help would be gratefully received
Neil

A PCP is a longterm car hire, in that they come with a Guaranteed Minimum Future Value at the end of the lease, its only a problem if you try to end the lease early. Remember than new MG4's are £10k cheaper than they were 3 years ago, also there are currently some cracking new EV's with excellent 2 year lease deals around £250 / month

 

[LenEV2016]

Hi All
Anyone else having financial problem sorting out a new car.
My dilemma is negative equity ( totally horrendous values) with 3 year old MG4 on PCP Finance. I cannot get a deal that is anywhere
Near what I am paying now.
It’s 3 years into a 4 year contract and not sure if I can hand it back?
Would leasing be anyway of getting out of the problem.
Any thoughts or help would be gratefully received
Neil

As has been said, you have two options keep it to the end of your PCP deal then hand it back (negative equity doesn't matter then)

Or go for a voluntary termination, you can do that when you reach the point of paying 50% of the total amount for the car (this is a total of the list price of the car plus the interest you are due)

 

[retrobloke]

Thanks for replies. So if I hand the car back at the end of the agreed PCP contract period, in my case 4 years, I will not have to pay anything including negative equity?

 

[LenEV2016]

Thanks for replies. So if I hand the car back at the end of the agreed PCP contract period, in my case 4 years, I will not have to pay anything including negative equity?

As long as it's not damaged or over the agreed mileage

 

[ReintjeWA]

If you want be sure about what your options are you should probably read what it says in the contract you signed.

 

[Chrisdriving]

Thanks for replies. So if I hand the car back at the end of the agreed PCP contract period, in my case 4 years, I will not have to pay anything including negative equity?

Correct simply hand it back, they would bill you for any excess miles and if there is any damage to the car beyond acceptable wear and tear, usually based on BVLRA guiines which you can look up.

 

[retrobloke]

Thanks again everyone.

 

[Buster72]

I am in a similar position. My Camden grey se sr will be 3 years old at the end of January 26 and is on a 4 year PCP with Santander through the dealer.

I don't have access to the original PCP agreement because I can't get access to my original virgin media email account (long story). So when I take it back for the service and MOT, I will have to ask them for a copy of it.

My question is:
Does anyone know was the guaranteed final vehicle valuation part of the original agreement, not the final lump sum payment?

I doubt very much that there will be any equity left after the 4 years is up, so I anticipate having to give it back at that point.
I really do like the car so would most probably get another one.

 

[LenEV2016]

GFV on a new SE SR is only £7870 now after 4 years PCP according to MG website it was probably would have been closer to double that 3 years ago

 

[MelanieMoxon]

GFV on a new SE SR is only £7870 now after 4 years PCP according to MG website it was probably would have been closer to double that 3 years ago

Easily, in 2022 when I used the PCP route for my Trophy the GFV was ~£16,300 (I'd have to check the paperwork) after the 4 year deal was up. At 3 years old the car is now (if I am lucky on a private sale) worth £12-13k. I'm VT'ing mine in the new year as I will be at the half way point, pointless paying to the end as I'm just chucking more money into something that isn't going to give me a penny towards my next car.

 

[Buster72]

GFV on a new SE SR is only £7870 now after 4 years PCP according to MG website it was probably would have been closer to double that 3 years ago

Very much appreciated.

 

[Buster72]

Easily, in 2022 when I used the PCP route for my Trophy the GFV was ~£16,300 (I'd have to check the paperwork) after the 4 year deal was up. At 3 years old the car is now (if I am lucky on a private sale) worth £12-13k. I'm VT'ing mine in the new year as I will be at the half way point, pointless paying to the end as I'm just chucking more money into something that isn't going to give me a penny towards my next car.

Sorry. VT'ing ?

 

[Everest]

Voluntary Termination

 

[Buster72]

Voluntary Termination

Understood. Thank you.

 

[tsedge]

Can anyone comment on Voluntary Termination experiences?

I read that VT can adversely affect your credit rating and chances of future car finance. Is this true in practice?

 

[gary333]

Can anyone comment on Voluntary Termination experiences?

I read that VT can adversely affect your credit rating and chances of future car finance. Is this true in practice?

It doesn’t make a difference to credit file, however could make the current lender not want to lend to you again though.

 

[LenEV2016]

Can anyone comment on Voluntary Termination experiences?

I read that VT can adversely affect your credit rating and chances of future car finance. Is this true in practice?

It's part of your consumer rights and shouldn't impact your credit rating

Voluntary Termination (VT) (VT) on a PCP car finance deal generally does not significantly harm your credit score if you meet all obligations, like paying 50% of the total cost and any arrears on time, but it will show on your credit file as an ended agreement, and frequent VT can look bad. The key is paying the required 50% and avoiding missed payments, as falling into arrears or doing a voluntary surrender (returning the car without meeting the 50% mark) will negatively impact your score, making future borrowing harder.
How VT Affects Your Credit File:
Shows as "Closed": The agreement will be marked as closed, but without a negative reason if done correctly.
Not a Default: Unlike missing payments, VT isn't a default, so it's a much better alternative if you're struggling.
Future Lenders Notice: Lenders can see you've used VT, and while not always a deal-breaker, it might influence future offers (e.g., higher interest rates).

 

[rjhfandclf]

I am in a similar position. My Camden grey se sr will be 3 years old at the end of January 26 and is on a 4 year PCP with Santander through the dealer.

I don't have access to the original PCP agreement because I can't get access to my original virgin media email account (long story). So when I take it back for the service and MOT, I will have to ask them for a copy of it.

My question is:
Does anyone know was the guaranteed final vehicle valuation part of the original agreement, not the final lump sum payment?

I doubt very much that there will be any equity left after the 4 years is up, so I anticipate having to give it back at that point.
I really do like the car so would most probably get another one.

Santander ≡ MG Finance; in late 2023 (for me), they were the only option from MG – so may well fall into the FCA PCP mis-selling saga (see i.e. https://www.moneysavingexpert.com/reclaim/reclaim-car-finance/).

My personal experience (and I am far from alone, it seems) has been that they are the most appalling organisation, with the worst so-called ‘customer services’ imaginable. I won’t detail as beneath contempt – but broadly was due to their misinterpretation of their ‘max 28 days abroad without written permission’ policy, which they don’t apparently understand themselves – even after their Complaints Department agreed with me in writing. I wouldn’t go near them again.