What’s my PCP final payment?

[Llama.]

Hi all

Where do I find the details of optional final payment if I want to keep my Tesla at the end of the PCP?

If I look in the Tesla App under the Financing section. There is a Loan Agreement, (see below) but I’m not sure which figure is this final payment?

Also how does it work if I trade in for a new Tesla at the end of the PCP? Will I have any equity on my trade in to apply to the deposit?

Sorry, I can’t find the answer in search.

Many thanks.

 

[Burley]

It looks like its the residual value, so 18,496.30 in your case.

 

[SpareHeadOne]

It should be in your finance agreement as an optional final payment or something similar, but the residual value figure does look to be the right one.

Let's see...

total financed + interest - (monthly payment x number of months) = final payment

39,390.00 + 5,782.30 - (555.75 x 48) = 18,496.30

Yep, that's your figure alright.

 

[Llama.]

It should be in your finance agreement as an optional final payment or something similar, but the residual value figure does look to be the right one.

Let's see...

total financed + interest - (monthly payment x number of months) = final payment

39,390.00 + 5,782.30 - (555.75 x 48) = 18,496.30

Yep, that's your figure alright.

Thanks very much.

If my car is worth more than the £18,496 final payment, can this be used towards a trade in?

I still have 3 years left on my 48 month PCP. Used market looks strong. Any guesses what sort of value my M3 LR will be worth in 3 years?

 

[SpareHeadOne]

Thanks very much.

If my car is worth more than the £18,496 final payment, can this be used towards a trade in?

I still have 3 years left on my 48 month PCP. Used market looks strong. Any guesses what sort of value my M3 LR will be worth in 3 years?

Yes, that's the position that Tesla want you to be in - same as other manufacturers really - they want you to use any equity to buy a new (or newer) car from them.

Too early to say what the value of your car will be in three years, we don't have any four year old M3s in the UK that you could even use as a rough guide yet; best I can say is that comparing it to an ICE vehicle starting at the same price point the residual looks to be around £7-10,000 lower.

(I got figures for a £50k Range Rover a couple of years ago and the residual value was just under £28k)

Based on that I would hope you'll have at least £7k in equity, but I guess it could be as much as £12k if the second hand market settles back down. The good news is that you've got lots of time to see how much the 2019-2021 cars are fetching at fours years old well before you get to the end of your finance.

 

[NewbieT]

Might just be language but just checking it is definitely a PCP agreement?

 

[Llama.]

Yes, that's the position that Tesla want you to be in - same as other manufacturers really - they want you to use any equity to buy a new (or newer) car from them.

Too early to say what the value of your car will be in three years, we don't have any four year old M3s in the UK that you could even use as a rough guide yet; best I can say is that comparing it to an ICE vehicle starting at the same price point the residual looks to be around £7-10,000 lower.

(I got figures for a £50k Range Rover a couple of years ago and the residual value was just under £28k)

Based on that I would hope you'll have at least £7k in equity, but I guess it could be as much as £12k if the second hand market settles back down. The good news is that you've got lots of time to see how much the 2019-2021 cars are fetching at fours years old well before you get to the end of your finance.

Thanks for this. Really helpful. I’d be hoping for about £7k on trade in. But would sell privately if this helped considerably with funding the next deposit.

 

[Llama.]

Might just be language but just checking it is definitely a PCP agreement?

Yeah. It definitely is a PCP. The language used on the finance calculator on the Tesla car configuration is Optional Final Payment. But there is different wording in the finance agreement.

Can anyone else with a PCP please have a look at their finance agreement and see what the wording is? ?

You can view this from the financing section of the Tesla app.

 

[khyros]

so let's say your residual is £18K. What if you try to sell the car and the offer price is £40K... essentially you'd be better off selling and paying the balloon figure ? if you traded that for 18K wouldn't you be in a worse position?

sorry I might be thinking this completely wrong.

 

[gangzoom]

so let's say your residual is £18K. What if you try to sell the car and the offer price is £40K... essentially you'd be better off selling and paying the balloon figure ? if you traded that for 18K wouldn't you be in a worse position?

Yes, but the assumption is the 'trade in' price will reflect the market price, so you will have £40k-18K to go towards what ever car you are trading in against.

 

[Kansalis]

Can anyone else with a PCP please have a look at their finance agreement and see what the wording is? ?

Mine says xx monthly repayments of £yy, and a Final Repayment of £zz. With a section underneath titled Guaranteed Minimum Future Value with the same £zz figure in it. It doesn't look anything like your screengrab above, I imagine Tesla have updated their document templates. I believe PCP agreements have to have very specific wording about the GMFV now.

so let's say your residual is £18K. What if you try to sell the car and the offer price is £40K... essentially you'd be better off selling and paying the balloon figure ? if you traded that for 18K wouldn't you be in a worse position?

sorry I might be thinking this completely wrong.

You can either pay the "balloon" (GMFV) payment & keep the car, or sell it & pay off the finance keeping the difference. Tesla (or any other buyer) will offer the current value as a trade-in, regardless of what the GMFV was on your finance agreement.

GMFV is not really a particularly good indicator of the car's worth at the end of the agreement. If the car happens to depreciate less (is worth more), the lender guarantees they will accept that amount regardless of the car's real value. Using the OP's figures above, at the end of the PCP term his GMFV is £18,496.30 if he goes right to the end of the agreement. If he sold or traded in that car for £35,000 (unlikely to get £40k at 4 years old) he would have ~£16,500 in equity to use as a deposit on the next car (or keep as cash).

Another advantage of PCP is that if you pay off the remaining balance early (which you can usually do at any time), you only pay the interest for the time you actually had the debt. Any remaining interest for the rest of the term is "refunded". That's why it's sometimes advantageous to exit a PCP early if your car has a very good trade in value in the middle of the term.