Pcp extra mileage , handing the car back negative equity.

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This topic contains 1 reply, has 2 voices, and was last updated by Stuart Masson Stuart Masson 1 year, 10 months ago.

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  • #114351 Reply
    Paul Cahill

    Hi Stuart

    Looking for some advice please, back in 2013 I purchased an Audi A3 on a PCP deal from Arnold Clark and was told by the salesman to put down I would only do 6,000 miles per year on the car and I quote he said miles will never matter.
    this PCP deal was taken out over 4 years I am 2 years and 2 months into the agreement and at the end of my agreement I should only have done 24000 miles but 2 years in I have done just shy of 30000 miles. I got it at 36,600 miles it’s now up at 65,000 miles, I have spoken to the salesman all the way through this and he told me don’t worry about it it will only matter if you hand the car back, because of the miles I’m doing it’s worried me because I am devaluing the car and out of worry I am thinking about taking on a new car.
    However, I am in negative equity of 3,000 because my finance company are saying to Arnold Clark they want 9,000 for my current car and Arnold Clark is valuing my car at 6500 on a part exchange leaving me with a negative equity of 3,000.
    The only reason I’m taking out the new car is because I don’t want to keep the current one do more miles and make it worse when if I take the new car add the negative equity onto the new car and just see the payments through to the end to get rid of the negative equity.
    To Be honest I don’t know where to go with this or what to do I feel the salesman has put me in this position always assuring me miles won’t matter , now it seems like there mattering big time the new car should be 240 a month but with my situation it’s going to cost me 305.00 pm, if you could please help me give me advice on this. Thanks paul

  • #114371 Reply
    Stuart Masson
    Stuart Masson

    Hi Paul. Firstly, the salesperson is a liar, and it’s one of the reasons Arnold Clark has a very poor reputation – even by used car dealer standards.

    Secondly, you should always estimate your mileage as accurately as possible as it will almost certainly make your life easier further down the line (as you are now finding). The salesman has a vested interest in recommending a lower mileage – it keeps your payments down, which means you can afford a more expensive car or additional add-ons, which means more commission for him…

    On a PCP, it is pretty normal to be in negative equity until very close to the end of the agreement. For more information, read our article on negative equity.

    Don’t be tempted to add the negative equity onto a new finance agreement – you will only make your problems worse down the line, with even greater negative equity. An increasing number of finance companies will no longer allow you to finance negative equity, and for very good reason.

    The longer you keep the car, the smaller the negative equity gap should be. Even though your mileage is high, the current gap should gradually come down as you get closer to the four-year mark. You may be able to call the finance company and ask them to increase your mileage allowance – it will bump your payments up but may reduce your negative equity position later on.

    Another good article to read is our one on settling a PCP early.