Car finance query

Daria22P10

Hi all,

I am having a predicament with car finance options. Currently I have on finance an Astra GTC 2013 42k miles. Including insurance I am paying £300 a month roughly for the car. My intention however is to not keep the car once the finance is paid off.

I am considering selling this car and paying off the finance so I can take out a car on PCP giving me the freedom to change cars every two years and a lower monthly cost by getting a smaller engine giving me cheaper insurance.

I am wondering if anyone has any advice regarding this? I only took the car out in September due to my old car breaking I had to make a quicker than expected choice. If I sell now I will avoid paying a bunch of interest on the borrowing amount.

Has anyone had experience with pcp would this be a better option?

Any help is appreciated.

[Deleted User]

What was the finance on the current car? a loan or hp or what?
If so you can't sell something that doesn't yet belong to you.
What sort of annual mileage do you do?

Ben8282

My advice would be to get a loan for a car you can afford then repay the loan and own the car.
All PCP does is allow individuals to 'rent' cars that they could never afford and then get stuck with either making a massive balloon payment or being without a car..

Daria22P10

It's a loan. I bought the car through Evans and the loan got approved through Barclays. There is nothing in my contract about me no owning the car until it's paid off. In fact the car is not mentioned at all.

PCP seems like an attractive deal since I can get something much cheaper and never pay for any repairs and can get something new every 2 years but then on the other hand I will forever pay for cars... just wish I took something cheaper in the first place :huh:

Nasqueron

Ben8282 wrote: »

My advice would be to get a loan for a car you can afford then repay the loan and own the car.
All PCP does is allow individuals to 'rent' cars that they could never afford and then get stuck with either making a massive balloon payment or being without a car..

That's a little negative on PCP - sure some people want to get flashy cars they can't afford and get stuck with it when stuff goes wrong but for the savvy consumer, they can be a great deal

I got a new car on PCP, £500 deposit, £4500 up front, £259 a month on 0% APR and £8000 balloon at the end - all discussed and agreed up front. In the mean time the money I could have spent buying outright is earning me interest and no loan interest making the car cost more than it's worth

OP - you do need to check the deal and the interest rate and if it's really 2 years, not 3 as well as what you need to pay in terms of mileage if you go over the limit etc and be aware of deductions from the GMV for any bumps / scratches etc - don't be fooled by salesmen promising the earth

foxy-stoat

Daria22P10 wrote: »

It's a loan. I bought the car through Evans and the loan got approved through Barclays. There is nothing in my contract about me no owning the car until it's paid off. In fact the car is not mentioned at all.

PCP seems like an attractive deal since I can get something much cheaper and never pay for any repairs and can get something new every 2 years but then on the other hand I will forever pay for cars... just wish I took something cheaper in the first place :huh:

Get a settlement figure and find out roughly what you can expect to sell the car on the private market, then as a trade in.

If this is a straight loan then you can sell the car when you like and settle the finance afterwards, best to read the credit agreement again just in case.

forgotmyname

Are you sure a PCP is a cheaper option? Not always.

Never pay for repairs? Except even small scratches and dinks to the paintwork will need to be repaired and brakes and tyres still wear out.

It still needs servicing etc.

System

And lets not forget you'll be paying for the first 2 years depreciation which is the most expensive plus it'll have a mileage limit like 6000 or 9000 miles a year and once you go over that you pay a per mile penalty.

Nasqueron

Tarambor wrote: »

And lets not forget you'll be paying for the first 2 years depreciation which is the most expensive plus it'll have a mileage limit like 6000 or 9000 miles a year and once you go over that you pay a per mile penalty.

Mileage limit is set beforehand and agreed with the dealer as it affects the GMV - only an issue if you want to trade in at the end, otherwise mileage is irrelevant

Depreciation is only an issue if you want to sell the car or trade it in at the end, for people who want the car it's utterly irrelevant