How do pre-agreed residual values work on PCPs?

We have 9 months left of a 4 year contract on an Audi Q3. After contact by the dealer we duly enquired about a new Q2 and after extremely protracted dealings we were made an offer to replace the car. Bearing in mind we were told at the start of the contract that Audi had fantastic residuals we were less impressed with the offer which included no discount for the new car.

We had to settle the valuation of the car by Audi of £19,200 after which they would give us £16,500. It seems on top of the engine scandal (of which we are a victim) we also have a PCP scandal. We feel we have no choice but to exercise our right to return the car without further cost. It is in good condition

Asked on 30 December 2016 by Andy Tompkins

Answered by Honest John

A PCP isn't quite the same as an HP agreement where you can walk away after paying off 50% of the debt. With a PCP there is a pre-agreed 'residual value' for the car, which the car may exceed or fall short of. In your case, this pre-agreed residual price is after 4 years. VAG almost always sets its residuals high, the intention being to leave you with nothing if you return the car at the end of the term so they can then sweet talk you into another PCP on which they make a 'deposit contribution'. So better to see the contract period of the Q3 out.

Tags: main dealers new cars pcp

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