Part-Ex Experiences

[TM3PTN]

Hi all,

Newbie here trying to get my head around the various hurdles and challenges before I take the plunge with a new M3P!

I currently have an ICE which is coming to an end on its PCP deal and I will hopefully be replacing it with an M3P (thinking in MSM but haven't yet decided).

I went to the Tesla SC in Stockport (Manchester) yesterday and explained that my current car goes back in April next year - the kind gent advised that with delivery lead times being between 1&3 months it is too early to place an order. He suggested that I look at putting a deposit down in January (not sure if this is consistent with others in terms of lead times?).

Anyway - On the way home from the dealership I was then thinking about potentially doing a part-ex with my current car and have a few questions that I am hoping this very knowledgeable community will be able to help with!

Here goes...

1. How have people found the part-ex process? Is it slick and relatively pain free?
2. I have never part-ex'd a car that is on a PCP deal before so forgive me for my naivety - How would the part-ex process work with a car that is on a PCP deal? (i.e. there will obviously be finance outstanding on the car so will Tesla pay this finance off, or will they just deduct the value of the ICE from the price of the M3P and leave me to source the funds to pay off the finance?)
3. Have Tesla honoured the valuation that they have given via the online request? If not then what has been their reasoning?

All advice, guidance, direction is greatly appreciated

TN

 

[fredsoneya]

I have never part-ex'd a car that is on a PCP deal before so forgive me for my naivety - How would the part-ex process work with a car that is on a PCP deal? (i.e. there will obviously be finance outstanding on the car so will Tesla pay this finance off, or will they just deduct the value of the ICE from the price of the M3P and leave me to source the funds to pay off the finance?)

You can part-ex or sell a car on PCP at any time however the finance has to be settled at that point, if not before.

So let’s say your order a M3 now and it arrives in December, you could sell your ICE then or part-ex with Tesla, depending on who gives you the best value.

You (and usually the buyer) request a settlement quote (you could request one now so you know where you are) and then this is paid as part of the transaction.

If you’re in negative equity, so say your car was worth £30k but PCP was £33k, you would also pay £3k as part of the deal.

Or if you’re in positive equity, you can put that towards your deposit or cash...

 

[TM3PTN]

You can part-ex or sell a car on PCP at any time however the finance has to be settled at that point, if not before.

So let’s say your order a M3 now and it arrives in December, you could sell your ICE then or part-ex with Tesla, depending on who gives you the best value.

You (and usually the buyer) request a settlement quote (you could request one now so you know where you are) and then this is paid as part of the transaction.

If you’re in negative equity, so say your car was worth £30k but PCP was £33k, you would also pay £3k as part of the deal.

Or if you’re in positive equity, you can put that towards your deposit or cash...

Really useful heads up - thanks i requested a trade-in valuation from Tesla yesterday so I will see what they come back with and take it from there - from what the guy at the SC told me yesterday, I'm not expecting a great deal as he said they tend to take the cars as they are...
Fingers crossed for something decent!

TN

 

[NorfolkMustard]

Check your PCP contract for "Voluntary Termination". After you have paid 50% of the total you can hand it back whether it's worth what you owe or not and irrespective of any settlement figure they may suggest.

CCA section 99.

A guide to cancelling your car finance early

 

[DJP31]

Just to add to the good points made above, if p/xing with Tesla you will need to settle the finance before handing it over when you collect the new car. They just send it to auction so it will need to be free of finance.

A good idea to get the settlement figure now and a WBAC quote, that won’t be a million miles off the Tesla quote. The Voluntary Termination is also an option if the car is in negative equity.

 

[AndrewR]

I was looking into options for selling my current car, Tesla PX was about 15% lower than WBAC, another option which gave a very good price was Arnold Clark who has offered more than what I'd expect to get selling privately!

 

[TM3PTN]

Guys - these are all really useful pieces of info! Thank you!

NorfolkMustard: Yeah - I can hand it back at any time now. My only concern with this option is that I'm a few miles over the agreement so there will be an excess mileage charge (due to other family members making the most of it whilst I was working out of town for a year or so ). I've been trying to weigh up the cost of paying the excess mileage versus the potential negative equity...

DJP31: Just got a quote from WBAC for £13,225 and a settlement quote from Mercedes of £13,799 - which isn't as bad as I thought it would be if I'm completely honest.
But the excess mileage comes to around £320 as it stands (being an accountant I have done some forecasting in a spreadsheet ha ha), so I think there is some 'saving' (or damage limitation) possible by handing it back and just putting a fresh £2k down on the M3P.

All of you guys are awesome - I have been following the various discussions on this forum for a while now and the knowledge and willingness to share experiences is fantastic! Thank you. I have bookmarked the page and will be using it as a reliable reference point (and hopefully to provide some of my own advice for others once I get mine).

 

[mrobins64495]

Another alternative is just sell the current car privately. You’ll always get a better figure and you can usually have the buyer pay direct to the finance company to clear it. (just don’t do it on a Sunday like I once did... that was a pain).

 

[TM3PTN]

Another alternative is just sell the current car privately. You’ll always get a better figure and you can usually have the buyer pay direct to the finance company to clear it. (just don’t do it on a Sunday like I once did... that was a pain).

Yeah I have thought about selling privately but the hassle of advertising, then test drives, then the haggling - it puts me off. But it isn't an option I have completely ruled out just yet...

 

[DJP31]

So of I’ve understood correctly you have already paid 50% of the total due under the contract, and therefore have the VT option available to you? If you do this the mileage allowance will be pro rata to the termination date but that’s no big deal.

Personally I wouldn’t hesitate to pull the trigger on the new car now. The lead time is an unknown quantity with Tesla, but that doesn’t matter in your case - you can hand your existing car back at anytime with only the excess mileage to pay. Alternatively if the p/x value comes in at better than the Merc settlement go down that route - as long as Tesla know you aren’t using the full value as a deposit and have the cash flow to fund the delay between settling the finance and getting the proceeds back from Tesla.....

 

[ArunG]

I changed from an Audi to a MS late March 2019. I found the Tesla trade in figure (as said above, going straight to auction) to be poor. I tried the online sites for best price, which was Arnold Clark. My car was in good condition and the whole experience with AC was painless. They didn't try and talk down the website price. Oh, and the MS is the best car that I have ever owned.

 

[M70ppn]

Just back from WBAC, well I’ll be honest, always had them down as sharks.
Totally the opposite is true, offered nearly 2k over other on lines Arnold Clark etc...
All they took off was £100 for the mileage being 22860, and not 22k like I had said!
Very quick and easy and 3k over Tesla’s trade in value.
Car was a Golf R!

 

[TM3PTN]

So of I’ve understood correctly you have already paid 50% of the total due under the contract, and therefore have the VT option available to you? If you do this the mileage allowance will be pro rata to the termination date but that’s no big deal.

Personally I wouldn’t hesitate to pull the trigger on the new car now. The lead time is an unknown quantity with Tesla, but that doesn’t matter in your case - you can hand your existing car back at anytime with only the excess mileage to pay. Alternatively if the p/x value comes in at better than the Merc settlement go down that route - as long as Tesla know you aren’t using the full value as a deposit and have the cash flow to fund the delay between settling the finance and getting the proceeds back from Tesla.....

Correct - I have the VT route open to me. My only reservation with it is the excess mileage, which pro-rata'd is around £320 as it stands (did some calcs on my spreadsheet
Great point re. the fact that I can hand it back whenever though. It means I'm not without car for x months while Tesla pull their finger out.

Regarding my earlier valuation: I tried with Arnold clarke and got a better quote from AC than WBAC which means I'd only be paying £136 to cater for negative equity as opposed to £574! Thanks to AndrewR for the tip and to ArunG for the second opinion.

I think as long as I keep up the repayments over the next few months - and current car doesn't take a nosedive in depreciation - I will "pull the trigger" and then get another quote from AC closer to the time of delivery. Hopefully any reduction in valuation will be offset by my monthly repayment and that way I'll be able to move to my new beast without a sour taste in my mouth!

If I do it over the next couple of weeks then I should HOPEFULLY get the car by the end of the year, or January at the latest - but judging by the experiences of a lot of the people on here, it isn't worth holding my breath!

 

[NorfolkMustard]

Not sure if mileage overs come into it with voluntary termination. It’s just a fair-wear-and-tear test AFAIK. You’re not relying on the PCP terms, but the CCA instead.

 

[mrobins64495]

So of I’ve understood correctly you have already paid 50% of the total due under the contract, and therefore have the VT option available to you? If you do this the mileage allowance will be pro rata to the termination date but that’s no big deal.

Personally I wouldn’t hesitate to pull the trigger on the new car now. The lead time is an unknown quantity with Tesla, but that doesn’t matter in your case - you can hand your existing car back at anytime with only the excess mileage to pay. Alternatively if the p/x value comes in at better than the Merc settlement go down that route - as long as Tesla know you aren’t using the full value as a deposit and have the cash flow to fund the delay between settling the finance and getting the proceeds back from Tesla.....

I wouldn’t be so sure on that. I’d be asking the finance company. They structure it weirdly, so you can be 70/80% through but because they’ve structured the interest actually still end up owing money.

 

[TM3PTN]

Just back from WBAC, well I’ll be honest, always had them down as sharks.
Totally the opposite is true, offered nearly 2k over other on lines Arnold Clark etc...
All they took off was £100 for the mileage being 22860, and not 22k like I had said!
Very quick and easy and 3k over Tesla’s trade in value.
Car was a Golf R!

Oh really? Thats great news for you I presume your car is in good condition. Mine is pretty pristine with the exception of a small but deep stone chip just next to the merc badge on the front (looking to get that sorted over the next week or so), and some alloy wheel damage (not all mine, I might add! ha ha) which will be sorted before the car leaves my ownership.

I wasn't keen on them either (mainly due to experiences my friends had with them) but it sounds like you did well with them!

Their online quote can't beat AC in my scenario so not sure if they would be able to do anything better in person.

So right now, thanks to everyone who has commented, these are my options:

1. Hand the car back when my M3P arrives and pay the pro rata'd excess mileage
2. Get another valuation closer to M3P time and sell to Arnold Clark / WBAC (if they improve their quote) - then pay the neg equity (which should be less than the excess mileage if my valuations today were anything to go by)
3. See what Tesla can offer and if good then just go with them and pay the neg equity/keep any extra (if their valuation is better than AC/WBAC)

You guys have certainly helped clear my thoughts today.

 

[TM3PTN]

I wouldn’t be so sure on that. I’d be asking the finance company. They structure it weirdly, so you can be 70/80% through but because they’ve structured the interest actually still end up owing money.

No I have checked with the finance company previously and what DJP31 says is correct for my circumstances
It is about the % value of the finance and not the % of the term, so as you say you could be 70/80% through a term but still not have paid enough due to the weighting of the interest to the capital at the start of the agreement.

 

[TM3PTN]

Not sure if mileage overs come into it with voluntary termination. It’s just a fair-wear-and-tear test AFAIK. You’re not relying on the PCP terms, but the CCA instead.

That is really useful to know!! If mileage has no bearing then I don't have to worry about any of the above! Just hand the car back and walk away when my M3P arrives.

Being an accountant I am a stickler for reading everything when it comes to legal bits but I must admit this has always been an area which I have paid lip-service to (purely because I have not had to worry about it previously)

 

[DJP31]

I wouldn’t be so sure on that. I’d be asking the finance company. They structure it weirdly, so you can be 70/80% through but because they’ve structured the interest actually still end up owing money.

Not sure I’m with you as the VT clause is statutory. Purchase price + total interest over the term = contract value.

50% of this is the VT point, so once the deposit and repayments made equal or exceed 50% of the contract value you can VT. Your liability is then only any excess mileage charge.

When this point is reached varies of course, largely based on the size of the deposit and the GFV. If the GFV is high then the VT point won’t be reached until very late into the contract. In my case I have a very bullish GFV (Tesla keeping the repayments low) so don’t reach the VT point until month 44 of 48.

 

[mrobins64495]

Not sure I’m with you as the VT clause is statutory. Purchase price + total interest over the term = contract value.

50% of this is the VT point, so once the deposit and repayments made equal or exceed 50% of the contract value you can VT. Your liability is then only any excess mileage charge.

When this point is reached varies of course, largely based on the size of the deposit and the GFV. If the GFV is high then the VT point won’t be reached until very late into the contract. In my case I have a very bullish GFV (Tesla keeping the repayments low) so don’t reach the VT point until month 44 of 48.

Yeah the VT clause is statutory but you’ve made the point I’m trying to make... depending on interest the VT point isn’t at the point people usually think I.e 50% of contract term, and usually month 40 or so on at 48 month contract.