Car finance question

[rhysjones79]

OK 1st post..

Righty ho

Thinking about buying a new car for (a Golf) around 14/15k and am wondering about how to finance this new purchase.

I have a car which i wanna p/x and have been given a trade-in figure of 5k.

There is 3k finance outstanding on my current car, which is at 0% interest.

This leaves equity of 2k.

Now the stealership are offering 5%APR on the new purchase, thus taking over my oustanding finance, meaning monthly payments of circa £300 over 48 months for the 13k.

Alternatively, I could take out a personal loan myself, paying off my own outstanding finance.

Now another VW stealership has offered me 5.2k on my current car, and I enquired about their PCP (Personal Contract Purchase) scheme.

They quoted me (on a brand new £18,495 Golf) a final value of £8199 (based on 12k miles per annnum), working out at a tad under £300 a month over 36 months. (They also currently have an offer where they give £500 towards your deposit when using the PCP scheme, meaning my equity is £2700)

Essentially, I don't know what to do.

I can take PCP out on a nearly-new car too which would obviously alter the figures again.

Having not done PCP before and the only info I have on it courtesy of mr Google, what would people suggest that I do? Which option makes most sense?

I confess that I am not the most savvy finance-wise, so any genuine advice would be really appreciated...

[plane_boy2000]

Finance at 5% for HP sounds really cheep - are you sure its nota flat rate of 5%? I got caught out on this a few years back.

For me personal preference is to own my car without it belonging to teh finance co. I can always sell then if I need to raise fast cash.

You could probably get a better deal by usinng a broker as suggested above and then getting a good low rate loan.

If your current car is still at 0% then I would stick with it - in reality there is no such thing as 0& - the finance charges will have been loaded into the price you paid, so in efect you have paid the finance charges and are now settling the loan by borrowing from another lender - very expensive way to live.

[roswell]

£300 * 36 months = 10800.
Your car is worth 5200

this makes 16000
Somethign is missing here there must be a baloon payment or you give the car back clause ???

Another thing to look at is when you finshed paying all this back your car will only be worth the final value of £8199 assuming that its not damaged and has only done 12000 miles and porbably will only be worth that IF you take out more finance on a new car ?

if possible keep your car till it is un economical to repair, Alternatively save as much deposit as you can for your new purchase and dont get finance from the Garage you purchase from, after all they sell cars there not a bank :-)

[vansboy]

Before you do the deal, check http://www.honestjohn.co.uk & post in Thee Backroom - Discussion.

Also clik the This weeks Best Deals link, to the box on the right of his site & you'll see Audi A3 Sportback 2.0 TDi SE 5dr £18718 - makes your Golfs sound dear!!

VB