Query re PCP balloon payments?

JonW

Member
Messages
3,259
All,

This may be a dumb question, but I’m curious as to what’s the normal experience in terms of the balloon payments on a PCP lease relative to market value?

My family car is currently a Range Rover Sport, and at the end of Feb it comes to the end of a 4 yr lease. I wasn’t particularly considering buying the car, but there seems to be a big difference between the balloon payment, and what a similar spec car with similar mileage are being advertised for on AutoTrader.

Is this normal?
 

dickygrace

www.richardgracecars.co.uk
Messages
7,310
Pretty much yes. It’ll be trade money, maybe around £5-7k apart on a RR.
 

safrane

Member
Messages
16,749
Couple of questions in a similar vein... if you so less miles than the contract and the car is in better nick, do you get any additional money back from the dealer more than the MFV?

Also, if the opposite happens but you pay the balloon is there any implications for doing more miles??
 

ChrisQP09

Member
Messages
2,994
Maybe I'm out of the loop but 32k for a RR like that after 4 years sounds hard to swallow.
 

JonW

Member
Messages
3,259
Maybe I'm out of the loop but 32k for a RR like that after 4 years sounds hard to swallow.

Do you think it’s too much or too little? This is what I have to pay them to keep the car, and to me it’s lower than I was expecting
 

ChrisQP09

Member
Messages
2,994
Do you think it’s too much or too little? This is what I have to pay them to keep the car, and to me it’s lower than I was expecting

I think it's too much for a 16 plate RR. There again, If that is where the market is for RRs then so be it. I personally don't perceive RRs to be the brand they used to be in terms of quality etc. If I had that type of disposable cash to spend on a large car, my money would be on a similar year Cayenne, or the smaller Macan.
 

Scaf

Member
Messages
6,513
I would pop your reg number into We Buy Any Car - that will give you a real would low ball offer - it’s over £32k then you are good to go.
 

Davidt99

Member
Messages
184
It's the nature of PCP's, the bigger the GFV the lower the monthly payments. The idea is that no one pays the GFV and just gives the car back. Bear in mind that you will be charged extra for any damage to the car and an excess mileage charge if you go over the agreed mileage figure.
 

Ewan

Member
Messages
6,757
You can buy your car from the finance company for £32k, and sell it the same day to WBAC for a £7k “profit”. Though of course, it’s not a £7k profit, it’s just £7k less of a loss. Which is well worth having.
 

rockits

Member
Messages
9,167
Sounds like a great deal and no brainer to me.

It will be worth taking it to your local LR dealer and get them to bid an outright purchase price as they may want the car to fulfil an order for a customer they have on their books. If so they will likely pay a fair bit more than WBAC in this case as well.
 

JonW

Member
Messages
3,259
You can buy your car from the finance company for £32k, and sell it the same day to WBAC for a £7k “profit”. Though of course, it’s not a £7k profit, it’s just £7k less of a loss. Which is well worth having.

correct Ewan - it’s not really a profit at all, just a partial refund of some of the cash I’ve already paid in monthly payments over the last 4 years...

However, still a no brainer, and we can then either use the car as a deposit for the next one, or sell it privately.
 

hashluck

Member
Messages
1,515
Of course what they really want is for you to use the 'equity' as a deposit on your next new car. This tends to be how they structure PCPs
 

Wattie

Member
Messages
8,640
correct Ewan - it’s not really a profit at all, just a partial refund of some of the cash I’ve already paid in monthly payments over the last 4 years...

However, still a no brainer, and we can then either use the car as a deposit for the next one, or sell it privately.
Yup, sounds good to me.
 

dunnah01

Member
Messages
648
Don't forget that WBAC will flame you for several k for refurbing wheels, scratch repairs, trim repairs etc.. etc.. once you get there