Do I plan to complete my car (lease) final payment or swap models?

jellyowl

Hello all. A couple of years ago I got a new car for the first time after the one I'd had since I first passed my test died unexpectedly (and cost four times what it was worth to fix). Luckily as it was the end of the financial year I got a pretty good deal, paid my deposit and then agreed to my 42 months paying a budgetable amount as payment, with a final payment of just over £3000 to finish off paying for the car. I also get free servicing and MOTs for the life of the car.

BUT none of my immediate family have ever had a car in this way before. Next March I will be due to make The FInal Payment of just over £3000. I know I am not going to have that much money in savings by then so my options are:

- Get a 0% interest card or other loan to pay off the final amount in combination with my savings. I then get to keep my car (which I do like)

or the culture of the dealership is one where they pretty much expect you to instead:
- hand back the car and sign up for another car/model and keep paying monthly.

Obviously there are pros and cons to each (taking out a loan elsewhere to pay for the car, but then it's mine and I like it but then again a new model would have the protection of the dealer's warranty...)

Does anyone have any suggestions as to how I can tackle this dilemma?

C_Mababejive

Public transport?

facade

The two choices you are considering boil down to-

1) pay for the car you like, own it and have several years hopefully trouble free motoring (If you continue to put the money you were spending on the PCP into a separate bank account, you can either fund the odd repair, or have most of the money to buy the replacement when it dies)

2) keep making other people rich, and yourself poor, by paying a lot of money to borrow another car you don't own.

Given those choices, I'd go for 1) every time, especially as you like the car, you know how it has been driven, and any faults that occurred.

Shaka_Zulu

facade wrote: »

Given those choices, I'd go for 1) every time, especially as you like the car, you know how it has been driven, and any faults that occurred.

You would only do this if the value of the car is greater than the final payment.

facade

Shaka_Zulu wrote: »

You would only do this if the value of the car is greater than the final payment.

True, if the GFV were significantly more than it was worth, if it was within £500 or so (on a GFV of £3000) I'd likely still buy it, as there is always hassle & expense swapping a car (change the insurance, replace a couple of tyres, change a cambelt, buy a parcel shelf* and floormats or something), and there would be money thrown away on a new PCP. (And any damage the garage "discover" to pay for on the one handed back too)

So better introduce

3) If you can buy the identical car in as good a condition from a dealer for significantly less than the final payment, hand yours back and buy that one.


* Why is the parcel shelf usually missing, and for sale on eBay? Do people actually strip their car out before trading it in?

jellyowl

That would be lovely of course, but sadly is not an option for me and my family's circumstances for a whole host of reasons, that I doubt anyone would be interested in my listing.

jellyowl

Thank you @façade and @Shaka_Zulu I will have to look up how much the car would be worth but it's great to have outside opinions. Probably keeping it might be the best option then....and I've got till March to work out how to pay for it. I have a third of the cost in savings for the final payment but am unlikely to be able to save much more between now and then. Just put in for a 0% interest card from Tesco though so fingers crossed that helps matters and then I can basically pay it off with the money I would've already been paying out monthly for the car...

System

The last few years paying several grand via a couple of hundred of quid a month for the last three and a half years to avoid doing a grand of repairs on your old car not taught any lessons?

jellyowl

Thank you to those who gave suggestions without a side order of superiority complex snark (way to make a noob feel welcome)

thescouselander

It sounds like you'd be better re-financing the current motor. If you swap models presumably you'll need to find some money for the deposit a if you're already balking at a £3000 balloon payment I cant see how finding the deposit for a new deal is going to be any easier.

fiisch

From someone who is a serial PCP'er and changes their cars constantly.... For the love of God, buy it!

I've spent an absolutely fortune in 12 years of motoring on 7 different new cars, and whilst I like cars, I could have put the money to better use.

The only exceptions to this rule:

- As mentioned, if the Guaranteed Future Value is significantly more than what the car is worth (unlikely);
- The mileage is very high and as such you are likely to incur significant maintenance costs (by high, I mean >80,000);
- You've had trouble with the car which could signal further faults/reoccurrences.