Audi S5 - balloon payment

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Tue 15 Sep 2020 14:07
Audi S5 - balloon payment - carmad888

3 years ago I entered a pcp arrangement with VW Finance. I have been discussing changing my vehicle.

No where on my PCP documentation is there any mention of guaranteed market value ( balloon payment). When asking VW Finance for this they referred me to the dealer, who has made me an insulting offer for trade in.

Do I have any recourse on VW Finance for their omission? I feel someone, somewhere has duped me as I know the forecourt price the dealer will advertise my car at will reap them a massive profit. Had I known the balloon payment was to be so low then I will have given the deal second thoughts.

Any advice would be appreciated

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Tue 15 Sep 2020 14:14
Audi S5 - balloon payment - Bromptonaut

So you acquired the vehicle in 2017. You may (or may not) have paid a deposit and you then contracted to pay £n.nn in each of the next 36 or so months.

What does the agreement say about total amount payable, amount payable for credit etc?

What was its exact duration?

As I understand it one normally has option at end of PCP to pay the balloon or return the car and owe nothing. If you're lucky its trade value might exceed the balloon and give you some equity towards deposit on a replacement.

My daughter and her partner bought a Skoda Octavia on PCP at approx same time as you. The duration of the PCP was 40 months. As of early this year when they made some tentative inquiries about changing it the balance due on finance exceeded the car's trade in. Inference was they'd have no equity if they waited until the end of the PCP. They might have exceeded the mileage too.

They've now decided to pay the balloon and keep the car.

Edited by Bromptonaut on 15/09/2020 at 14:25

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Tue 15 Sep 2020 14:28
Audi S5 - balloon payment - Avant

I have an Audi on PCP and that information is certainly on mine.

Audis normally hold their value well; but if yours is really worth less than the guaranteeed market value, then just hand it bak to the dealer at the end of the contract and buy another car somewhere else. The deficit is then the lender's problem rather than yours.

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Fri 18 Sep 2020 11:27
Audi S5 - balloon payment - Bromptonaut

Can the OP add anything more?

Or is this another 'dead end' thread?

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Fri 18 Sep 2020 11:59
Audi S5 - balloon payment - daveyjp

Looks like the OP doesn't have the basic understanding of PCP terms.

Balloon, GFV and trade in are all confused in the post. From this starting point confusion can only get worse.

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Fri 18 Sep 2020 15:55
Audi S5 - balloon payment - concrete

Can the OP add anything more?

Or is this another 'dead end' thread?

As you say Brompt the OP has lost interest. Probably when he realised he had not read nor understood the contract. Maybe he is daunted by having to read it through and then find the relevant details he needs to make a decision. I wonder how many people sign contracts without reading and understanding what they contain and the level of payment and risk they are subjecting themselves to? The devil in the detail is the right way of describing it alright.

Cheers Concrete

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Fri 18 Sep 2020 16:30
Audi S5 - balloon payment - Bromptonaut

I wonder how many people sign contracts without reading and understanding what they contain and the level of payment and risk they are subjecting themselves to?

I suspect a large number look no further than the monthly payment.

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Fri 18 Sep 2020 16:38
Audi S5 - balloon payment - bathtub tom

I suspect a large number look no further than the monthly payment.

A niece was told by a car salesman 'friend', he could reduce her monthly payments considerably. He could, but she didn't look at the annual mileage limits. Cost granny a fortune to bail her out!

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Mon 21 Sep 2020 12:36
Audi S5 - balloon payment - Gibbo_Wirral
A niece was told by a car salesman 'friend', he could reduce her monthly payments considerably. He could, but she didn't look at the annual mileage limits. Cost granny a fortune to bail her out!

I was buying a car from a dealers. He asked how I was paying. I said cash as I was arranging a Tesco bank loan at £150 a month, 36 payments.

Dealer guaranteed to beat it.

In fairness he did, he offered £145 a month.

A shame about the £300 charge to set up the finance at the start and the £300 to close the finance at the end though.

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Mon 21 Sep 2020 13:14
Audi S5 - balloon payment - daveyjp

The number of abbreviations, terms, figures used in PCP agreements is why the dealers love them.

Its a game of multi dimensional chess. List price, discounted price, trade in, deposit contribution, GFV, balloon, APR, deposit, arrangement fees.

The possibilities to confuse are endless, a small change in one figure can have a dramatic effect on the calculation. They will never set out deals side by side for comparison to be made, as mentioned all they state is the monthly cost.

The latest wheeze is three month payment holiday. Sounds a great deal, until you realise this increases the cost. No payment for three months means no debt being paid off so interest due is higher. At APRs of 5-15% on a £30k loan this could be a significant amount.

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Mon 21 Sep 2020 15:33
Audi S5 - balloon payment - concrete

It is an old trick when the salesman asks how much do you cost to change to be. In other words how much have you to spend. The deal will then be padded and packaged accordingly and the odds will always be in their favour. I would never divulge this information. I always had a price in mind and the money ready to deal when it suited me. It never ceases to amaze the naivety of people in general when it comes to parting with the hard earned.

Cheers Concrete

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Wed 23 Sep 2020 17:18
Audi S5 - balloon payment - carmad888

Thanks for your responses.

My quibble is that my PCP agreement has NO mention of a GMV ( balloon). Having read all sorts of stuff on the VW finance site and other PCP related websites there ought to have been a figure. I have asked VW Finance for a copy of the agreement. If there is nothing there I am wondering if I have a legal recourse on VW Finance? I think that as consumers of these products we have to be protected from improper practices. If necessary I'll go to the FCA for advice.

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Wed 23 Sep 2020 18:14
Audi S5 - balloon payment - Brit_in_Germany

Maybe the offered trade in payment is the excess value of the car above the balloon?

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Wed 23 Sep 2020 20:07
Audi S5 - balloon payment - joegrundy

I find this hard to understand. I don't know whether all PCP agreements follow the same format but they must all contain the same information.

Looking at mine:

A3 - How we work out what you need to pay for the vehicle - this shows cash price less deposit plus interest to arrive at the "Repayment Balance"

A7 - What you need to pay each month - this shows 1st repayment of £x, then 35 monthly payments of £x, then a final repayment of £x. (all these should add up to the repayment balance)

A9 - At the end of the agreement - explains that the final repayment figure will be treated as the guaranteed future value subject to deductions for damage and excess mileage if you decide not to pay the final repayment and keep the car.

Do you have something similar in your agreement?

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