PCP Balloon Payment

jeremy1

Hello,

I am looking for a bit of advice on whether or not to pay the final payment of my PCP deal.

Here is a bit of a background:

I bought a Toyota Aygo (automatic, with Sat Nav) in April 2017 on a 42-month PCP deal, 0% APR with Toyota Finance. I paid £600 deposit and my monthly payments are around £190.

In October 2020, the final payment will be about £4,430.

I have been advised that at the end of the agreement I have three options:

- Pay the payment and own the car;
- Give back the car and walk away;
- If the car is worth more than the payment, part-exchange.

I have been told by colleagues who know about that sort of stuff that I shouldn't pay the final payment and own the car, I should instead part-exchange.

However, I feel like it would be a really good deal to have a 3.5-year-old Toyota Aygo for £4,430. It will still have 1.5 years warranty. I see them advertised on AutoTrader for over £7,000 with similar age, mileage and spec. (Whether someone buys them, a different question I suppose.)

So the reason I am thinking about this is that a family member will soon need a car and I was wondering whether I should let them have the Aygo, get a new car for myself, and then at the end of the deal pay off the Aygo and own it. Or should I get something interim with an idea that the Aygo will get part-exchanged for another car in a year's time?

Thanks a lot for your help, just looking to dip into the experience of people around here.

AdrianC

jeremy1 wrote: »

In October 2020, the final payment will be about £4,430.
I have been advised that at the end of the agreement I have three options:

- Pay the payment and own the car;
- Give back the car and walk away;
- If the car is worth more than the payment, part-exchange.

Correct. In effect, the third option is the dealer you PX with paying the balloon and buying the car on your behalf, then immediately taking it in PX against whatever you buy from them.

I have been told by colleagues who know about that sort of stuff that I shouldn't pay the final payment and own the car, I should instead part-exchange. [/quote

Why are they saying that? How are they justifying it?
Simply "you don't want to be seen owning a car that old"...?

However, I feel like it would be a really good deal to have a 3.5-year-old Toyota Aygo for £4,430. It will still have 1.5 years warranty.

There y'go, then. If you like the car, and you don't mind continuing to drive about in it... why pay thousands to "upgrade it"...?

I see them advertised on AutoTrader for over £7,000 with similar age, mileage and spec. (Whether someone buys them, a different question I suppose.)

Indeed. And they'll be trade sales, of course, so you as a private seller would have more hassle to receive less money - or you'd sell it to a dealer for even less.

foxy-stoat

Buy it and keep it, unless you want a brand new car again.

jeremy1

Thank you for your replies, I appreciate it.

I believe my colleagues were trying to say that I shouldn't pay the balloon payment because the car won't be worth the balloon payment, however I think it would be. It is a 3.5-year-old Aygo, higher spec with the alloys, the SatNav and the rear-view camera, automatic, with 1.5 years of warranty left and with about 30,000 miles on the clock - I think that's a good deal for £4,432.

Again, thank you for your advice.

AdrianC

There is a handful of 2016 Aygos on Autotrader which aren't write-offs...

https://www.autotrader.co.uk/car-search?sort=relevance&radius=1500&onesearchad=Used&make=TOYOTA&model=AYGO&price-from=4000&price-to=4500&year-from=2016&exclude-writeoff-categories=on

One entry-spec 46k
One entry-spec 51k
One entry-spec 76k
One one-step-up-from-entry-spec, auto 100k

The ones that are similar to yours are indeed substantially more.

jeremy1

Yes, that's what I observed as well.

I will be keeping it. Thank you a lot for your advice.

worried123

jeremy1 wrote: »

Hello,

I am looking for a bit of advice on whether or not to pay the final payment of my PCP deal.

Here is a bit of a background:

I bought a Toyota Aygo (automatic, with Sat Nav) in April 2017 on a 42-month PCP deal, 0% APR with Toyota Finance. I paid £600 deposit and my monthly payments are around £190.

In October 2020, the final payment will be about £4,430.

I have been advised that at the end of the agreement I have three options:

- Pay the payment and own the car;
- Give back the car and walk away;
- If the car is worth more than the payment, part-exchange.

I have been told by colleagues who know about that sort of stuff that I shouldn't pay the final payment and own the car, I should instead part-exchange.

However, I feel like it would be a really good deal to have a 3.5-year-old Toyota Aygo for £4,430. It will still have 1.5 years warranty. I see them advertised on AutoTrader for over £7,000 with similar age, mileage and spec. (Whether someone buys them, a different question I suppose.)

So the reason I am thinking about this is that a family member will soon need a car and I was wondering whether I should let them have the Aygo, get a new car for myself, and then at the end of the deal pay off the Aygo and own it. Or should I get something interim with an idea that the Aygo will get part-exchanged for another car in a year's time?

Thanks a lot for your help, just looking to dip into the experience of people around here.

Hi, I am just paying off the balloon payment on my toyota yaris. Toyota finance were very good....good apr - you can take it out over how many years suits you. i have mine for 2 years and i am paying around 300 in interest. As you say, the 4k ish is good for your car and only you have owned it.