Car Loan for Balloon Payment?

Nasqueron

BrummieSteve wrote: »

Hi All,

First time poster so hoping someone can help me.

3.5 years ago I bought a brand new Seat on Finance, I've never missed a payment and am coming to the end of the term. In this time, my credit score has dropped drastically to 'Very Poor' (Through no fault of my own, but that's a different story...).

I have to pay a £4290 balloon payment in June. I've applied to VW Finance to refinance this but its due to another credit check which I think i'm going to fail. I've had a look for alternatives and there are plenty of car finance companies on the web - most are fine with bad credit. Problem with these is they want you to go to a dealer to buy a car... not to pay off a balloon payment.

Are there any car finance providers that will let me take out £4290 for my balloon payment? If not, what are my options?

Thanks!

Unfortunately that is how car finance works on PCP, at the end you either pay the balloon and take ownership of the car or use the guaranteed value towards a new car (which is what they want you to do to get another 3 years of payments).

I appreciate your circumstances have changed but having been through this myself you are told up front what the final payment is and it's listed on all the documentation. I don't mean to sound harsh but you knew 3 years ago what the payment was and the end date of the PCP so there is no reason to not have the money ready to pay it off

AnotherJoe

Nasqueron wrote: »

That is how car finance works on PCP

At the end you either pay the balloon and take ownership of the car or use the guaranteed value towards a new car (which is what they want you to do to get another 3 years of payments).

I appreciate your circumstances have changed but having been through this myself you are told up front what the final payment is and it's listed on all the documentation. I don't mean to sound harsh but you knew 3 years ago what the payment was and the end date of the PCP so there is no reason to not have the money ready to pay it off.

Yes interest rates mean you pay more than you borrow, that is how finance works unless you are on 0% (which is the only reason I got mine rather than paying in full up front)

This doesn't appear to be a ballon payment though, it's just £200 according to posts upthread. It's seemingly just an admin payment payable at the end of the contract. .

Nearlyold

thebigripoff wrote: »

My question would be having paid the agreed price in full to the dealer via a finance plan why are we expected to pay again i have the same issue and am told its to cover administration.

a thank you letter wold have been more appropriate

As others have said the Fee would be clearly stated in the finance agreement. If this is an HP agreement it will be the "Option to Purchase Fee", this is a mandatory feature of all HP agreements as it is payment of this fee that transfers ownership of the car from the finance company to the borrower (though perhaps bizarrely the Fee can be Zero).

Nasqueron

AnotherJoe wrote: »

This doesn't appear to be a ballon payment though, it's just £200 according to posts upthread. It's seemingly just an admin payment payable at the end of the contract. .

There are 2 posters on here, the OP (BrummieSteve) has a balloon payment of over £4000 and another poster (thebigripoff) has this issue with the admin fee, I appear to have replied to the OP but accidentally quoted the thread hijacker

I have edited my earlier post to reflect this

Bonfire_Bride

Go and see a dealer. They may be able to refinance the balloon payment on the vehicle for you. Some finance companies won't do it, but you should have options.