I have a Mitsubishi on a PCP deal; what will happen when it ends?

With Mitsubishi pulling out of the UK, a reader with an Eclipse Cross asks what his options will be at the end of his finance agreement...

Mitsubishi Eclipse Cross front

I have a Mitsubishi Eclipse Cross on a PCP finance deal that expires in 22 months' time. With Mitsubishi recently announcing its withdrawal from the UK and other European car markets, how will this affect my deal with Shogun Finance? 

I was anticipating part-exchanging my car for a new one at the end of the deal, but if there is no new model to upgrade to, what will my options be? 

I’m sure other Mitsubishi owners are wondering the same thing, so I’d appreciate hearing your thoughts on this. 

Hugh Dyas

What Car? says…

Mitsubishi announced that it was freezing the introduction of new models to the UK and other European countries in July, as part of its plan to reduce costs by 20% and focus on investment in its core markets in Asia and the US. 

The brand is imported into the UK by the Colt Car Company, which has stated that it will retain as many of its 103 retailers as possible to provide parts and aftersales services to owners. The dealerships will also stay open to sell off all stocks of European-spec vehicles, and with around 15,000 vehicles to sell, it has been estimated that this might take around two years. 

This means that in the short term, there shouldn’t be any affect on your car ownership experience, because you’ll be able to get your car serviced and have any warranty work done. 

Servicing and aftersales are lucrative areas of business for dealers and car makers, so it’s something they are likely to want to continue with for as long as possible. And the fact that Mitsubishi isn’t going out of business altogether also means there will be a supply of replacement parts for the Eclipse Cross, which is reassuring. 

Mitsubishi is likely to want to maintain its reputation among customers in the US and Asia, where it has a larger share of the new car market than it does in Europe, and this means it will look after its European customers by honouring their car warranties. 

However, none of this helps with the fact that there won’t be a new Mitsubishi model available for you to swap into when your PCP deal ends. And that means you will be left with only two options at the end of your finance agreement instead of three if you stick with Mitsubishi. They are to keep the car by paying the final payment, as laid out in the agreement, or give the car back with no more money to pay (subject to its mileage and condition). 

The third option of part-exchanging, using any equity built up towards a deposit for next deal, will not be available on a Mitsubishi vehicle. However, the Colt Car Company has stated that it is already looking at opportunities to become the UK distributor for other vehicle brands – in particular, emerging ones with a focus on electric models. As it aims to introduce additional brands to its business as quickly as possible, it might be that a model from one of these brands could be a suitable replacement for your Eclipse Cross. Additionally, Mitsubishi has told us that “there could be other options available via Shogun Finance with another new vehicle brand at that time”, so it’s worth keeping an eye on developments over the coming months. 

It’s also worth remembering that you’re not tied in to Mitsubishi or Shogun Finance when choosing your next car. You can trade your car in for one from a different brand and use the equity from the existing car to pay off the final balloon payment and use any extra that’s on top as a deposit on a new car, just as you would if you were financing another Mitsubishi. If you buy from a franchised dealer for another brand, their finance company will pay any outstanding finance to Shogun Finance for you. 

This is best done towards the end of the PCP deal – in the third year of a 36-month deal, for example – because by then the amount left to pay on the deal should be less than the value of the car. If it’s not, you’ll be in a ‘negative equity’ position and you’ll have to pay the difference between the car’s value and the outstanding finance. 

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