Wednesday 20 November 2019

Be clear on PCP deposit; Car for 4; Car for €10,000; A premium buy?


Skoda Superb
Skoda Superb

Aidan Timmons and Motoring Editor Eddie Cunningham team up to help readers make the right choice with their next car. Aidan visits dealers all over the country to produce a monthly guidebook on the values of used cars. He is co-editor of Motor Trade Publishers, who supply a car-valuing service to the motor trade, insurance companies and finance houses. Eddie is author of former best-seller 'Clever Car Buying'.

You've probably answered these a million times before but when my PCP contract is finished in August can I use my car's Guaranteed Minimum Value (GMV) to trade against a different make at a different dealer. I purchased a new 142 Kia Cee'd SW in August 2014 and the GMV was /is €7,500. I'd like to stay with my current dealer but want to go back to an SUV. Do you have any views on the new Honda HRV? I've read mixed reviews of the Mazda CX3/Opel Mokka? Any ideas would be greatly appreciated.

Aidan: You are under no obligation to remain with the same brand when the term of the PCP loan agreement expires. You can clear the remaining balance yourself or trade your car in, effectively leaving the dealer to clear the finance on your behalf.

However, things tend to be a bit easier if you stick with the same brand. A lot depends on how the competitor brands assess your trade-in. The GMFV is not a trade-in allowance in the traditional sense.

Rather, the equity or deposit on your next car is inferred when a dealer calculates what they deem to be the market value over and above the GMFV.

With that in mind, dealers trading-in models from their own stable tend to go a bit stronger on values and so you might find that you will have a bigger deposit by sticking with Kia. Also, timing is crucial when you want to change to another brand.

One way or another, unless you hand back the keys, the final balance is payable in August. You need to coordinate changing to another brand with the termination of the loan period.

Don't delay any longer. Visit all the dealers with the brands you are considering and see what is the best car/deal combination that you can strike. I like the HR-V but it is certainly worth pursuing both other excellent cars on your list.

And don't write-off a new Sportage 1.7-litre diesel EX SR or even a new Kia Niro if you can make a hybrid work for you. Both are excellent machines.

Eddie: Let's be absolutely clear here. GMFV (Guaranteed Minimum Future Value) is the least your car will be worth when your tenure comes to an end. It is not all your money.

The bit you are entitled to is the difference between the GMFV and what the dealer(s) reckon it is worth on the market at the time you are thinking of changing.

So, say the GMFV is €10,000 and the best price you can get on the market is €12,000. Your money is the difference between the two: €2,000. People need to understand that clearly. There is still some confusion.

PCPs are set up so you have a reasonable margin between prevailing market price and what your GMFV is. Dealers want you to have as much as possible towards a deposit on a new deal. It makes sense for them. But you need to be sure you are aware of what is involved. Otherwise you could find yourself having to find a lot more money for a deposit than you might have expected.

Of the three cars you mention: for me it would be the Honda HR-V

I would like some advice on buying my next car. Total budget €10,000. Annual mileage 15,000. I need the car to have four seats. I currently drive a Skoda Superb 2003 with 165,000 miles.

Aidan: I am going to stick with diesel because your car is a 2003 model and you have expressed your annual mileage in miles so, I think you are still a diesel driver.

This might be a bit of a cop out but would you consider another Superb? It's an excellent machine and it might be difficult to readjust to anything smaller. At this budget, forget specification and concentrate on buying something with as little mileage as possible. That might also mean ignoring, to some extent at least, the age of the car. A low mileage, well kept, fully serviced 2010 model would be ideal.

Even if it meant you bought the old 1.9-litre diesel instead of the newer 1.6 TDi or 2.0-litre TDi, I think you would fare a lot better with something well minded from the start. The newer engines launched in 2011 so fish around that era and see what is available.

Also, a 2-litre diesel Mondeo is worth pursuing. They were usually kitted in Zetec trim at a minimum but Titanium versions are a plenty. Again, stick with something with a good bit of life left in it.

Eddie: Stick with the Superb and stick with diesel. There isn't a better option out there, especially with your budget. One warning: check its service history thoroughly.

Some of these 'older' cars have mega mileage. Superb it is, for me.

I live in Meath and commute to Dublin for work. I am looking for a reliable diesel hatchback for a family of four. My wife has a 171 Dacia Duster so the hatchback would be the second, smaller car in the family. I have also considered an electric Nissan Leaf but heard the 2012 model was not as good as the later models and the battery warranty had run out from Nissan.

Aidan: The warranty for the Leaf's battery and traction motor/invertors is five years so if you are concerned about that then stick with a diesel.

This is a case where your mileage might suit a petrol/electric car but the profile of your driving means you can still get away with a diesel.

You don't provide a budget but let's suppose you have around €10,000. I think you could go well in a Focus. Anything smaller might be a bit too tight when you have both kids and maybe a pal or two in the car with them.

The Focus is straightforward but you might find your budget lands you with a decision to make. You can either go for the last of the old 2011 Style models or the first of the newer shape Edge models. Both were available in 2011. The old model was called Style, which was the base grade model, but it was laden with everything usually found in the Zetec versions.

The newer model Edge is still well kitted and it looks a bit fresher. Your money will go a good distance in a Nissan Note, too. It's a capable, spacious, reliable machine. Go for the SV model.

Eddie: Buy yourself a Toyota Auris with a 1.4-litre diesel. It will fit you well. I don't believe an electric car is for you at this stage. Nothing wrong with them but I suspect you put up a lot of mileage with your family - as well as your commute - so stay with diesel this time. Electric next time maybe?

I'm in my early 40s, a single, professional woman. I drive an old 2-litre petrol BMW 3-series with a lot of mileage. I don't want as large a car as the 3-series any more but I want something that is regarded as premium. I can spend up to €40,000 including a trade-in. And I do not want an SUV. A nice hatch or saloon would be fine. Your advice would be really appreciated please.

Aidan: Try the Audi A3 saloon for size. It's a humdinger. The 1.4 TFSi petrol model with the S'Tronic automatic gearbox would make for a particularly classy combination.

Alternatively, go for a manual but in S-Line trim and get a few additional goodies such as LED headlights, interior and exterior aesthetic upgrades, and cloth/leather seats. If the A3 is too big then perhaps the Mercedes CLA is too. If not, then look at the CLA 200 AMG Sport. It's technically a coupe but it has rear doors. The CLA has been a massive success for Mercedes so it is worth checking what all the fuss is about. Would you consider a coupe? The BMW 2-Series is on budget and on point with your criteria. If you are accustomed to the power from your 3-Series then go for the 220i Sport model. It will keep you entertained and it looks dashing from all angles. Furthermore, you might find that your 3-series residual value performs a little better with a BMW dealer.

Eddie: Aidan's sentiments are, as ever, spot on. I would go for the BMW 2-series because you are trading a Beemer. Grand little car. The Audi and Merc are excellent too. Put it this way: if you were trading in an Audi I'd say A3, or a Merc I'd say GLA. The latter is extremely popular with a couple of professional women I know.


WE love getting your enquiries but can't reply to all queries in as full a manner as this due to time and space restraints. We try to deal with as many as possible via email. But you can help us help you if you make sure to include the following critical elements in your query:

* Total budget.

* Annual mileage.

* Size of car required (number of seats).

* Present car (make, model, year and mileage).

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