Should I settle PCP early?

marks87

I bought a car on PCP 2.5 years ago. Not long after, circumstances changed which meant I didn't actually need to use it as much as I thought: and I mean a drastic reduction - the mileage is insanely low for a 30 month old car, which puts me in a good position in terms of resale value.

While I'm still to decide if I'll want to keep the car (I am erring on the side of "yes", but not 100%), I ran some quotes last night. In the vast majority of cases I appear to be in positive equity - my settlement figure is a little over £8k and all but one place quoted me between £8,800-£9,500.

I'm now wondering if it's worth me settling the PCP early so I own the car, even if I'm largely undecided about keeping it? Crunching the numbers I can put up £3k from savings, so would be looking to get a £5k loan for the rest. Clydesdale (one of the cheapest recommended my MSE) tell me that would be around £177 in interest over 2 years. Even allowing for a loss of interest on the savings, it still works out at around £600 less than the remaining finance on the PCP (which includes the balloon payment).

I can then decide at my leisure what I want to do. It also means if I do decide to get rid, my options are much more open. But I feel it's a decision I need to make reasonably soon to minimise the PCP interest payments.

Is there anything obvious I've missed?

Thanks in advance for any advice!

neilmcl

I'd go and get some firm figures regarding the car valuation, settlement and loan before making this decision, If it does turn out that it's cheaper the settle early then do so. Where are you currently getting your valuation figures from?

marks87

neilmcl wrote: »

I'd go and get some firm figures regarding the car valuation, settlement and loan before making this decision, If it does turn out that it's cheaper the settle early then do so. Where are you currently getting your valuation figures from?

I ran the plate and mileage through WeBuyAnyCar, Auto Trader, What Car and Confused.com. All except WBAC gave valuations of around £9k and a couple were based on it being in "good" (rather than "excellent") condition.

I guess you're right though that I should get a more concrete opinion from someone who's actually seen it.

Thanks for the advice.

neilmcl

The WBAC price is more like the price you'd get for trade but I'd look for similar cars up for sale on the likes of Autotrader, gumtree, ebay etc for a better idea of what value you may get selling the car, I'd doubt it would be that much of a saving by settling early rather than just paying off the balloon.