# Best time to change car on a PCP



## fitz

I was just wondering if there was an optimum time to change your car when you're signed up to a PCP deal? 

My car is over a 36 month period but they told me at the garage that my PCP will reach something called parity and that is usually around 22 months where i can get exactly the same car again brand new for the same monthly payment by just trading mine back in.

But this got me thinking when the best time to change is without hopefully losing any money

Thanks all


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## SteveTDCi

Why would you want the same car again ? I guess it all depends on how much you owe compared to the cars value, the only way to find out is to call the finance company


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## Mattwilko92

I would think the best time to change would be when the car's market value is exactly what your settlement figure is? therefore minimal loss.


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## Maggi200

I'm also not sure what you mean by 'without hopefully loosing any money' 
All cars cost money, some won't depreciate if you're lucky but they're exceptions. If you want a nice new car, you're gonna pay for it. 

IMO there isn't an optimum time to change and the best deal will be totally different for every car, regional variances, demand, condition etc


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## fitz

SteveTDCi said:


> Why would you want the same car again ? I guess it all depends on how much you owe compared to the cars value, the only way to find out is to call the finance company


I wouldnt want the same car again its just that in the garage saying that it made me presume that would have been the best time to change.



maggi133 said:


> I'm also not sure what you mean by 'without hopefully loosing any money'
> All cars cost money, some won't depreciate if you're lucky but they're exceptions. If you want a nice new car, you're gonna pay for it.
> 
> IMO there isn't an optimum time to change and the best deal will be totally different for every car, regional variances, demand, condition etc


By not loosing any money i mean when you buy a car on PCP you put down a deposit and my expectation (which could be wrong) is that when you take the car back at the end of your contract you still have that amount of equity in the car and you could use that equity as the deposit for your next one!?

Thanks for all the assistance all


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## SteveTDCi

The car will pretty much always hit the gmfv, well most normal hatches will. Big stuff like amg mercs and others that are heavy depreciators and it might be different.

I wouldn't have thought you would be in too much positive equity.


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## Deanoecosse

fitz said:


> By not loosing any money i mean when you buy a car on PCP you put down a deposit and my expectation (which could be wrong) is that when you take the car back at the end of your contract you still have that amount of equity in the car and you could use that equity as the deposit for your next one!?


Nope, whatever you pay as a deposit is gone and is incorporated into the cost of the deal ie higher deposit=lower monthly payment. At the start of your PCP the dealer would quote you a GMV (guaranteed minimum value). ie they guarantee the car will be worth say £6k at the end of the 36months. If its worth more, the extra can be used by you to go to a deposit on a new car, if its worth less you can walk away with no penalty. The amount you paid as a deposit is irrelevant.


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## andy665

fitz said:


> I was just wondering if there was an optimum time to change your car when you're signed up to a PCP deal?
> 
> My car is over a 36 month period but they told me at the garage that my PCP will reach something called parity and that is usually around 22 months where i can get exactly the same car again brand new for the same monthly payment by just trading mine back in.
> 
> But this got me thinking when the best time to change is without hopefully losing any money
> 
> Thanks all


Sounds like a dealership using my company's software but not being totally up to speed with what they are advising customers.

Our software searches for "parity" - this is the point where a customer can change their car (on initial assumption of wanting same car) and taking into account support offers etc for little or no cash in and keeping payments approx. the same

Not all customers reach this point during their agreement, we monitor hundreds of thousands of agreements and only one thing has remained consistent in the last 7 years is that every single agreement is unique and should be monitored as such

Sadly your expectation / hope that your equity at the end of the agreement will match your initial deposit is unlikely to be true, unless you put in a minuscule deposit


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## Rob_Quads

I am guessing the dealership are saying that in around month 22 they think your car is going be be worth £X,000 more than the tracked GMV that your agreement used. This means you can use this equity to put down a deposit on the next PCP plan and then stay on something similar.

Its all a game. Some will put in lower GMV on agreements so that when it comes to the end they can appear to give you a favorable option to trade up without putting any money in but at the same time you have just paid $$ to cover the extra loan due to the lower GMV where as others will use a higher GMV to lower the entry point but then come switch time with no equity people are less likely to trade up due to having to stump up a new deposit.


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## SteveTDCi

I'm not aiming this at the op but I don't understand why some people put massive deposits down, but Andy's post makes good sense.


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## WhiteRoc_170

SteveTDCi said:


> I'm not aiming this at the op but I don't understand why some people put massive deposits down, but Andy's post makes good sense.


It would be To keep the monthly repayments down


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## Rob_Quads

SteveTDCi said:


> I'm not aiming this at the op but I don't understand why some people put massive deposits down, but Andy's post makes good sense.


The larger the lump sum you put down the smaller your monthly repayments will be as your borrowing less.

Your going to pay a certain amount over 3 years. Sometimes a larger deposit will result in a smaller outlay over the 3 year period - all comes down to the numbers.

What I do find mind boggling is the people who put a large deposit down on a 0% PCP


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## SteveTDCi

Oh I get what a large payment does but I don't understand why people want to put all that equity in the car, you are better off leasing.


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## Steve Burnett

I'm on my second PCP deal and it worked very well for me. I had a good chunk of cash left over in the car once I sold it on, and I used that as a deposit on my new car.
PCP for me was/is great. I'll never own it outright but I'm not bothered by that? I want to lose as little money as I can on a car and drive a nice car at the same time.

Anyway, I don't thnk there is a best time. Do ensure you do it before you are due to make the final payment though. The PCP company will want the final payment as a cheque (cash in the bank). If the car has the money in it then you can't pay. I almost got caught out on that one.


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## SteveTDCi

If you want to lose as little money as you can go and spend £1000 on a banger and run it until it breaks, otherwise you will always be wasting money on a PCP


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## james_19742000

For me a PCP is perfect, I get to change my car regularly, I can put in a small amount of money and drive for up to 3 years with no hassles i.e. mot's etc etc and I can have a fixed monthly cost for the PCP, I have always paid a monthly amount for my cars so its no major problem, as for optimum time to change, I believe its when the outstanding amount is the same as the cars PX value, somewhere around 2 years depending on how the figures were done at the start.

As for when do I change my car, I change my car when the figures stack up as being favourable for myself, I am about to change my car onto a new PCP, I got a PX price from the dealer which was a shade below what I owed, so they used the negative equity to work out my new finance payment, however, the PX price has been price protected until arrival of new car so with the payment I make in-between when I ordered the car and when I collect the new car, around 4 payments, that will plateau or even work me into positive equity slightly, I am choosing to put a grand in as well to cover my options on the new car and with the new car being on 0% it works out that my payments will actually be around £40 less per month for a newer version of the same car I have now, (Skoda Octavia vRS) so all in all it has worked for me.

The thing with PCP's is that they will all plateau at different times depending on what you did or didn't put in at the start, end value etc etc, if in any doubt its worth popping into a dealer and having a chat.

The main reason I am changing is being 0% I will be paying all equity as opposed to equity and interest, I know its all a play on numbers and ultimately its all the same, but it sounds better, means I save £40 per month and get a new car into the deal at the same time!


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## Rob_Quads

I wonder how the pcp rolling 3 year costs compare to someone who buys after a year (i.e. not taking the huge hit it takes in the first year of ownership) and then sells it 2 years later.

I would gamble and say the pcp will result in a larger outlay over the whole period


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## andy665

Rob_Quads said:


> I wonder how the pcp rolling 3 year costs compare to someone who buys after a year (i.e. not taking the huge hit it takes in the first year of ownership) and then sells it 2 years later.
> 
> I would gamble and say the pcp will result in a larger outlay over the whole period


So many variables that it's impossible to give a simple answer - I have worked in around PCP for 20 years and no nearer finding the ideal scenario for everyone - every deal / situation is unique


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