ford pcp or tesco unsecured loan?

bellabooski

Hi everyone,
I would be so grateful of any thoughts on the following scenario.
I bought a ford car on PCP 2 weeks ago but am now wondering whether to pay it all off with a Tesco loan I have been offered in principle.

The PCP is £288.76 a month for 3 years with a balloon final payment of £6,232.63 at 7.1% APR total to pay £17,075.07

The Tesco loan would be £308.08 over 5 years interest rate 10.3% per annum (fixed) 10.8% APR, total to pay £18,484.80 but of course no balloon payment at the end.

I would like to keep the car for the foreseeable future so I'm thinking better to take the loan and pay it off outright, own the car and not worry about the mileage limitation of 6000 per annum.As I'm now retired I don't really want to keep changing the car or having to borrow to refinance the balloon payment of £6,232.63.

I would be so grateful of your thoughts on this as I'm a bit useless with this sort of thing and I always think it's better to get outside views on the pitfalls of each scenario.

Many thanks in advance of your kind advice.

Bella

Tixy

Hi, questions I would be asking myself

How likely are you to find the milage limitation a problem?

Are you definitely likely to need further credit for the final payment? will you be able to save for that payment or for a decent chunk of it within the 3years?

How likely is it that you will not want to keep the car after the 3 years.

How likely you will have a change in circumstances and not want to keep the car for even the 3years?

bellabooski

Tixy wrote: »

Hi, questions I would be asking myself

How likely are you to find the milage limitation a problem?

Are you definitely likely to need further credit for the final payment? will you be able to save for that payment or for a decent chunk of it within the 3years?

How likely is it that you will not want to keep the car after the 3 years.

How likely you will have a change in circumstances and not want to keep the car for even the 3years?

Hi Tixy,

Thanks for your prompt reply.

Mileage limitation: retired and will use the car maybe a lot more for short breaks, holiday trips (UK),visiting friends and family who live quite long distances away.
Further Credit: yes, I would definitely have to refinance the balloon payment.
Keeping the car after 3 years: yes I would probably keep the car (if it proves to be a good one)
Change in circumstances: no job to worry about losing as I am retired.

Tixy

I think I would probably go for the loan in your position.

Whilst it appears more expensive initially as you will need to finance the final payment for I guess another 2 years that difference in cost isn't quite so much.

But then 6000 miles doesn't seem like a lot to me, and I can't imagine not exceeding that. What extra cost would you have to pay if you do exceed the mileage?

bellabooski

Tixy wrote: »

I think I would probably go for the loan in your position.

Whilst it appears more expensive initially as you will need to finance the final payment for I guess another 2 years that difference in cost isn't quite so much.

But then 6000 miles doesn't seem like a lot to me, and I can't imagine not exceeding that. What extra cost would you have to pay if you do exceed the mileage?

It would be 6p per mile, which is I'm told not as high as some pcp deals.:)

matttye

It's worth noting that any extra mileage is only payable if you hand the car back - not if you keep it.

bellabooski

matttye wrote: »

It's worth noting that any extra mileage is only payable if you hand the car back - not if you keep it.

Thanks for that Mattye...I'm still undecided but am leaning towards the personal loan.