Got a ds3 on finance....

[motomarsh]

Hi all,

So
I am out yesterday looking at new cars for a laugh when the dealer tells me he car pay off my outstanding car finance, part ex the car, and I'll be left with a clean slate ready for the nex car .... Someone please explain... As this seems to easy? What have I got to look out for?

[Den]

Common thing for dealers to do. Exactly the same as a p/x except the money goes to pay your finance off instead of as a deposit on the new car. Biggie may be able to explain it better than me.


Sent from my iPhone using Tapatalk

[gar074]

Clean slate? So he takes that car you've been paying for off your hands, uses some of the residual value to pay off the outstanding finance, and pockets the rest? (taking the risk that it may sit on his forecourt for a while, of course).

Whether it's a good deal or not depends on what kind of finance deal you're on, how much you've already paid on finance, how much you've got left to pay - whether via monthly instalments or as a final payment - what the car's now worth 2nd hand, & whether the part ex actually gives you something against the cost of your new car.

The use of the phrase "clean slate" suggests that there's no part ex allowance coming your way with this deal, but I may have misunderstood - and bear in mind that the dealer will have some money in the new car that can be negotiated as a discount on the purchase price.

Time to get the calculator out!

[Bigfeet]

As Den said this is a common thing that is done. Equity in your Part Exchange is used to pay off any outstanding finance, for example if you have a PX worth £3000 but owe £2000 to the finance company then 3-2=1 which leaves you with £1000 to put forward.

'Clean Slate' is a term used when your are actually in negative equity, where you owe more on the finance then the cars worth, and the dealer used an over allowance to make up the shortfall. This leaves you clear of the PX and ready for the new car, i.e. clean slate.

Negative equity is the most dangerous place to be in as it costs you to 'buy' your way out. NEVER roll outstanding finance onto a new agreement as all you end up doing is payment interest twice which is stupid. Like wise never opt for the longest term just because it's cheaper, always go for the shortest term that is still affordable. This is why PCP agreements have really taken off as they remove the threat of Neg-Eq.

While on the subject of PCP make sure that the MILEAGE is correct otherwise you are just shooting yourself in the foot claiming a lower mileage then what you will do. Most people think the mileage only comes into play when you havnd back the car - wrong. The mileage of the car is also used to judge the final guaranteed value of the car at the end and if you have gone way passed what was expected then your car is going to be worth way less then the GFV and it's going to cost you either way, paying the mileage charge or the shortfall.