What to do with my MG4 Trophy?

[MGw]

Hi all,

I'm looking for some insight and advice as I don't know what the best course of action is for my situation. I purchased my LR Trophy MG4 new last year - it was an uncharacteristic impulse purchase as I was starting a new job, we needed a second car and I would be driving over 120 miles most days so wanted something 'cheap', electric and with good range that I wouldn't need to charge every day.

Due to the situation I was in at the time, I entered into a 4 year PCP finance deal which means if I saw everything through to the end, I'd end up paying £39k for a car which had an original list price of £32k. I am in a position where I can settle the finance on the car partially or in full. Judging by the horrendous depreciation on electric cars, it seems pretty clear to me that the balloon payment (c. £14.5k) will be higher than what the car will be worth in 2027 so if I saw everything through to the end, it looks like I'd end up just giving the car back. Also, based on my current mileage I am very likely to be going over the agreed mileage allowance.

I do enjoy the MG4 but with the amount of driving I do (I've put 24k miles on it in 18 months), I would actually quite like an all wheel drive and something a little bigger as I have a young family. At the moment I feel like settling the whole finance is a bad idea as I'd be paying £25k (the settlement) for a car worth £22k at best. I've never had a PCP before but I suppose paying off a good amount of capital up to the balloon payment amount would mean I'd save on the remainder of the interest?

My question is, what would you do in my situation?

[ Edited moderator: EV4->MG4. ]

 

[Daedalusminos]

What annual mileage did you declare and what is your excess likely to be at the end of the term?

 

[LenEV2016]

Any other option other than handing it back at the end of your deal means a fair financial hit for yourself.

 

[Coulomb]

I purchased my LR Trophy EV4 new last year

Do you mean an MG4? Or is this some Kia model I haven't heard of?

 

[Ferretusmaximus]

Having checked this week the book value on a 23 plate Trophy LR is £18k. If you were looking to pay off now (to avoid excess mileage charges) that's probably all you'll get as a part-ex. For example, Arnold Clark have 234 MG4s for sale all around the £19-20k range so you would do well to get £18k. With a payoff of £25k you're looking at a £7k hit - which is the same penalty as going to full term. I suspect a good number of MG4s will be coming onto the market over the next year so can't see the depreciation situation improving. If you need a bigger car how about looking around for some deals on new EVs, there are 0% APR, 0% deposit deals around and use the "discount" on the purchase to fund the gap on your current vehicle. Hope this helps - the second-hand EV market is definitely a buyer's market at the moment.

 

[MGw]

What annual mileage did you declare and what is your excess likely to be at the end of the term?

I was expecting to do 14k a year but I'm already at 24k with 6 months left of year 2. I think it's 14p per extra mileage but the other thing is that I'm expecting to change jobs within the next year so going over the mileage won't be an issue by the time I get to the end of year 4.

Do you mean an MG4? Or is this some Kia model I haven't heard of?

Yes MG4...

 

[Alb]

I've modified the thread title to make it clear we are talking about an MG4.

 

[NickHeynes]

Having checked this week the book value on a 23 plate Trophy LR is £18k. If you were looking to pay off now (to avoid excess mileage charges) that's probably all you'll get as a part-ex. For example, Arnold Clark have 234 MG4s for sale all around the £19-20k range so you would do well to get £18k. With a payoff of £25k you're looking at a £7k hit - which is the same penalty as going to full term. I suspect a good number of MG4s will be coming onto the market over the next year so can't see the depreciation situation improving. If you need a bigger car how about looking around for some deals on new EVs, there are 0% APR, 0% deposit deals around and use the "discount" on the purchase to fund the gap on your current vehicle. Hope this helps - the second-hand EV market is definitely a buyer's market at the moment.

It also might be an idea for the OP to see if they qualify for any affinity deal either with MG or another manufacturer which may be able to be used to offset some neg equity.