Advice on VAG PCP as needing to get a bigger car

[thefunkygibbon]

Hi all, so, basically I am likely needing to get a bigger car soon, because.....reasons. Currently have 5 door Cupra, and am wanting to get the ST estate version.
I have only had the car/PCP for 1 year (nearly to the day)
I've enquired about cashing in and have been told by the dealer that I "have £3k in equity" in my car at the moment. I think that is a tad misleading as that sounds like to me that I have profit in my car when i clearly don't. I've had a letter through from VAG finance which summarises how much it will be to 'cash out' and i'm certainly not in profit.

So as far as i can make out, I have probably got £3k "deposit" to put down on another car. Which, given that I put down the maximum deposit i could when i took it out (about 7k i think) means that my monthlies will invariably increase unless the value of the replacement car is less. (unlikely)

I guess at the end of the day, if i'm going to be massively out of pocket, I most likely will just have to lump it and keep the car for the duration or at least a bit longer (the dealer guy also said that my equity would increase over time... which I also didn't quite understand)

maybe i'm being thick. my maths a-level is a distant memory and i always seem to struggle to understand how these things work.

kinda wish i paid it all in cash now instead of PCP.


Any advise would be really appreciated.

 

[StylancePaul]

Sounds like what your dealer is doing is like they did with me when I traded in my FR a year early, they will settle up the existing finance on your current car, based on the value they sound like they are offering its worth £3,000 more than the outstanding finance. That £3,000 will then go towards your deposit on your next motor, plus anything you want to add to that.

He is right about the equity increasing, though it'll be slow, your car will continue to depreciate at the same time as you making payments off the total finance, make sure you agree a minimum value with them for the trade in value of your current car and just see what the settlement quote looks like on the day you exchange.

 

[2Stevo2]

PCP deals really do have u by the short and curlys...can i ask, what is the guarenteed value of ur car at the end of the deal? Are u likely to see that 7k in equity again?

 

[chrisRibiza]

Seat are fairly smart when they are calculating the figures so ultimately you will need to keep the car for pretty much the full term before you might start to "make" any money.

If you are on a 3yr deal and wanting to trade in after a year I'd say losing that £4K is probably about right given the amount of interest you'll be paying alone. I am half way through my deal and I am probably close to breaking even if I was to sell up now.

 

[DANFR180]

you are better off putting a smaller deposit down on a pcp as it isnt really a deposit rather an initial payment

 

[Rog.]

Would it be worth going with PCH/lease rather than PCP this time round? Your initial payment would be way less than £3k.
I was really dubious about leasing before taking the plunge, but it just seems more cost-effective than PCP.