PCP car finance quandry advice needed

jmb1

Oh thank god for that I was starting to panic. So that looks like my only avenue, end the pcp and buy it

motorguy

jmb1 wrote: »

Oh thank gif for that I was starting to panic. So that looks like my only avenue, end the pcp and buy it

You've options that dont involve handing it back -

* Trade it in now (but you might owe more than its worth)
* Take a loan out now for the current settlement figure
* Keep it until the end of the PCP term and trade it in
* Keep it until the end of term then pay the residual (loan or cash)

The last 3 would involve getting the timing belt done now.

jmb1

Ok thanks again. So given those last three will all cost the same (albeit interest on a loan rather than cash purchase) I may as well wait to see what the value and condition is at the end of the pcp and decide then. Do you concur?

motorguy

jmb1 wrote: »

Ok thanks again. So given those last three will all cost the same (albeit interest on a loan rather than cash purchase) I may as well wait to see what the value and condition is at the end of the pcp and decide then. Do you concur?

Yes.

If you've otherwise no firm plans at this point to keep the car beyond the end of the PCP term, i'd be inclined to get the belt done and then review when you're at the end of the PCP term and decide then if you want to keep it (pay the residual with cash or a cheap loan) or trade it in. If theres some minor damage i'd probably avoid handing it back for the reasons discussed.

Also, next time, consider a cheap personal loan - even over 5 years - rather than a PCP as it will give you more flexibility and control.

jmb1

motorguy wrote: »

Yes.

If you've otherwise no firm plans at this point to keep the car beyond the end of the PCP term, i'd be inclined to get the belt done and then review when you're at the end of the PCP term and decide then if you want to keep it (pay the residual with cash or a cheap loan) or trade it in. If theres some minor damage i'd probably avoid handing it back for the reasons discussed.

Also, next time, consider a cheap personal loan - even over 5 years - rather than a PCP as it will give you more flexibility and control.

Yep I've certainly learnt a lesson about PCP's and won't be touching again!

Massive thank you to you and all other answers, this all has been such a crucial help .

motorguy

jmb1 wrote: »

Yep I've certainly learnt a lesson about PCP's and won't be touching again!

Massive thank you to you and all other answers, this all has been such a crucial help .

No problem. Glad to help

AdrianC

jmb1 wrote: »

Yep I've certainly learnt a lesson about PCP's and won't be touching again!

PCPs have their place. But if you don't think that you want to stick to the duration of the contract, that place may not be for you.

jmb1

motorguy wrote: »

Theres only a (risk of a) headache if you VT.

You can trade your car in no problem and they will value it as is - just like your last car. Had you VT'd your last car you'd have been up against this too.

Just to clarify, if I did want to trade it in (risking the car value being less than still owed) I wouldn't be charged the fees for its condition, they just value it and pay that value, right?

The other thing that occurred to me is whether it would be cheaper to get a loan now for the settlement fig, paying less per month and pay interest on that for an extra year, or wait, paying 250 a month (more than the loan would be). Perhaps its about the same? Don't know I'll have to compare that. But it has the advantage of paying less per month as far as I can see? Ow my head.

motorguy

jmb1 wrote: »

Just to clarify, if I did want to trade it in (risking the car value being less than still owed) I wouldn't be charged the fees for its condition, they just value it and pay that value, right?

Correct, yes.

jmb1 wrote: »

The other thing that occurred to me is whether it would be cheaper to get a loan now for the settlement fig, paying less per month and pay interest on that for an extra year, or wait, paying 250 a month (more than the loan would be). Perhaps its about the same? Don't know I'll have to compare that. But it has the advantage of paying less per month as far as I can see? Ow my head.

Yes, you could take out a loan now for the settlement figure owed on the car right now (ring the finance company and ask for one).

The interest rate would most likely be lower (check online for cheap loans) and you could vary the duration to suit yourself.

jmb1

motorguy wrote: »

Correct, yes.



Yes, you could take out a loan now for the settlement figure owed on the car right now (ring the finance company and ask for one).

The interest rate would most likely be lower (check online for cheap loans) and you could vary the duration to suit yourself.

Is this maths right?

Settlement £8581.25. So, either:

1. Continue paying £250 month for 14 months =£3500. Then take out £5072.50 loan for balloon payment, £114 per month over 4 years(£360 3.5% interest ) = £5472. Grand total payable = £8,972.
2. Pay £8581.25 settlement, on £190 per month personal loan over 4 years (£529 3% interest) = Grand total payable = £9120.

So
1. Is cheaper option overall but £60 more per month.
2. Is £148 more overall but £60 cheaper per month.