Settling balloon finance

paddcomp

As per the title I'm looking for some advice on how to settle the balloon payment when the amount comes due at 3 years.

We purchased a VW Golf from new and the final payment is circa £8k in about 12 months time. I'm expecting the car to be worth more than the settlement figure and we wish to keep the car.

Options seem to be:-
1. Take out a personal loan for the total amount over a further 3 years @6.5-7%.
2. Pay the balance on a zero % CC, incurring a fee of 4%.
3. Move to a personal lease car with low initial deposit and similar payments to option 1. Still need to settle the current car balance and recover the equity to cover the deposit though.

What do people do at the end of the finance term?

forgotmyname

Balloon payment divided by 36 months = £££. Save that each month to pay it off when due?

Saving you 4% ++

paddcomp

forgotmyname wrote: »

Balloon payment divided by 36 months = £££. Save that each month to pay it off when due?

Saving you 4% ++

The flaw in the plan is I have 12 months to the payment being due, not 36 months. Also if I could afford additional payments over and above the current payments I would have used hire purchase not PCP.

molerat

You have now found why the dealers are so keen to sell on PCP, at the end you have 3 choices :
1) Come up with loadsa dosh to keep the car ....... as you have found, not always possible.
2) Hand the car back and walk everywhere .......... not usually an option
and their master stroke
3) Buy another car from them on finance ........ which seems to be the most popular option

paddcomp

molerat wrote: »

You have now found why the dealers are so keen to sell on PCP, at the end you have 3 choices :
1) Come up with loadsa dosh to keep the car ....... as you have found, not always possible.
2) Hand the car back and walk everywhere .......... not usually an option
and their master stroke
3) Buy another car from them on finance ........ which seems to be the most popular option

So now we're all on the same page, this describes the problem, what I'm after is a solution.

I could come up with the cash for option 1, either via a loan or selling shares. This seems a sensible option if we keep the car long term (10 years), as we're low mileage users and it's a VW diesel Golf this should work. I just can't help thinking I'll be paying the same or more per month for a 3-6 year old car as I paid for a 0-3 year old car (with service package and warranty).
Option 2 is a no!
Option 3, should I personal lease a new car every three years. Using lease search engines to find a good deal there are several 3+35 sub £200 per month cars out there i.e. Hyundia iX35

Hintza

I'm not sure low mileage, diesel and 10 years are a great idea. There are potential problems that could cost you a lot of money.

It might be worth getting sucked in for another 3 year lease and get a small petrol car to go forward after that.