PCP Car Hire Coming to an end

purple1994

Hey,
Not sure if this is the best option to help decide what to do but any advice would really be appreciated!
I have a PCP finance agreement with ford that ends on beginning of January so ill ideally have to decide and do something next month.
They have given me 3 options which are....
1) Part Exchange - get another new car, same deal but may pay a bit more.
2) Give it back - free of charge (except for any wear and tear/mileage or servicing charges)
3) Keep it - but i will have to pay the final balloon payment of £4000

Now this is my first PCP so i'm slightly confused in what direction to go in. i do not have £4000 sitting around so if i choose to keep it id have to look at either a loan or credit card to pay this off.
If i gave it back, my car is in pretty good shape so id be looking at maybe £400 to pay for service charges ect but then id have no car, also the miliage on it is so low they can easily re sell it so i feel like its almost a waste to hand it back.
If i part exchange, ill be paying more monthly for another new car and in 3 years from now ill be in the same position again.

Im wanting to get a mortgage so ideally id like to cut my losses with this but if i gave it back id have no car to use. I bought my car as new and its been 3 years and its only done 7,000 miles. Its also very reliable which is swaying me more towards paying for it but its very basic compared to new cars now days so my dilemma is, I've already paid £5000 over these 3 years for my car. Id say my car is only worth £6000 so if i pay to keep it id be paying more than its worth. My car is selling for £6000 if i chose to buy it then re sell it but it wont be for a while as ill need transport.

ANY ADVICE would be much appreciated it really would, my head is well and truly blown!

thanks

Herzlos

Do you like the car?
How much is it worth?

If you like it and it's worth £4000 or more, than get a bank loan to buy it from the finance company. You've had it from new and it's in good condition.

If you like it and it's worth a lot less than £4000, hand it back and go buy another one for less.

£4000 for a 3-year old car in good condition seems like a pretty good deal. What's the car?

System

Now this is my first PCP so i'm slightly confused in what direction to go in. i do not have £4000 sitting around so if i choose to keep it id have to look at either a loan or credit card to pay this off.
If i gave it back, my car is in pretty good shape so id be looking at maybe £400 to pay for service charges ect but then id have no car, also the miliage on it is so low they can easily re sell it so i feel like its almost a waste to hand it back.
If i part exchange, ill be paying more monthly for another new car and in 3 years from now ill be in the same position again.

Welcome to the PCP trap where you pay out a load of money to have nothing at the end and because you couldn't really afford the car in the first place which is why you got it on PCP, you've not been able to save any money to either pay the balloon payment or buy another car thus forcing you into another PCP deal so you've got transport.

I bought my car as new and its been 3 years and its only done 7,000 miles.

At that mileage it would be cheaper to use a taxi/train/bus. Every single mile you've travelled in your car has cost you more than £1 per mile. I bet you don't believe me do you? I'm being serious, do the maths.

Lets say you paid no deposit and your total was £5000 in PCP payments.

Now add three years insurance. There's another £1000

Add three years servicing - you have had it serviced haven't you as it is due not only on mileage but time. There's another £600 at least.

Fuel. Lets assume 50MPG at £5 a gallon so £700 in fuel.

Total=£7300 to do 7000 miles. Every single mile you've travelled has cost you £1.04p .

Where I live a taxi will take you anywhere in town for £2. Longer journeys work out at a quid a mile.

Shakin_Steve

You say the car is worth £6000 and your balloon payment is £4000. Surely you’ve answered your own question.

bris

Your logic is flawed, if you buy it for 4k and it's worth 6k then this is a no brainer. Just because you have already paid 5k doesn't mean you have paid more than it's worth. That deal is done, your PCP came with interest, of course you paid more than it worth.


That's in the past, what matters is now, if you have no intentions of taking out another PCP then buy the car, you would be mad not too, it's worth 2k more than you paying so look at it as a bargain.

gingerdad

hand it back and buy a car for a couple of grand - you mileage is way too low to justify the money you've lost / will loose on PCP

if you've only done 7,000 miles you will have effectively paid for 18,000 (assuming you stuck with the stand 6,000 p/a)

What car is it. you can easily check the trade in values

MataNui

Well, you say its worth 6k but how are you getting to that value? PCP deals are normally spot on with the balloon payment and the value. I assume you have seen them for sale on autotrader at around that price (presumably from dealers). If thats the case then the car is worth about 4.5k tops to you (meaning the value you would get if you did a PX or sold to someone like WBAC).

Thats still not a bad deal for you to consider paying off the balloon though. A lot of people find the balloon is more than they can buy one elsewhere.

Mobeer

Forget the money spent so far - that's gone now.

If the car is in good condition and worth 6k then borrow 4k as cheaply as you can and pay the balloon payment.

Herzlos

gingerdad wrote: »

hand it back and buy a car for a couple of grand - you mileage is way too low to justify the money you've lost / will loose on PCP

You'd be as well just paying the £4k and getting a car you like with a history you know, than going and spending £2k on an unknown that's going to be a lot older.

purple1994

It’s a ford KA zetec!

purple1994

It’s a ford KA zetec