Balloon payment at end of PCP deal

DrEskimo

Afc69 said:

So, to put some meat on the bone with some figures….

To settle up today, would cost me £22256. To continue paying £200 per month for 17 months and then settle up, £23414 (which includes the £20140 balloon payment)

Quick valuation is £31500 from webuyanycar, albeit we know they will reduce that figure.
Plan was always to buy the car, at end of the term.

Even buying the car then flogging it looks an attractive option

If you have the capital, settling now would be better. You've already spent a lot in interest, but looks like you could still save over £1,000 by settling today rather than waiting.

PCP can be a very expensive way to borrow money for a car....

iwb100

DrEskimo said:

born_again said:

Afc69 said:

So, to sum up, advice is to get out of any PCP deal pronto by either purchasing the car outright, or, hand the car back to the finance company and purchase your next car cash?

Well that is going to depend on if they have the car you want in stock.

I know someone who did this. Traded car in earlier this year for cash, and was awaiting their new car to be delivered. Have now been told that due to delays (Ukraine conflict) that there will be at least 12 week delay before car turns up. To say they are not happy is putting it mildly. But it was their choice to sell car when they did rather than wait till they go the new car.

Precisely. Theres a reason they are inflated. Fine if you don't need a car, but if you do you could be without a new car for months, or just end up using that money to buy an equally inflated used car.

It’s why it makes sense to use the equity in the car now to secure a cheaper PCP deal as that way the equity is protected even if new car is a long wait. And still have a car to use now. 

Grumpy_chap

DrEskimo said:

Precisely. Theres a reason they are inflated. Fine if you don't need a car, but if you do you could be without a new car for months, or just end up using that money to buy an equally inflated used car.

Or buy the cars that are new and available from stock.  There still are some and even with offers from list price.  The latest marketing spiel I received this week was for "22 plate first registered keeper stock Audi cars".  Clearly, there is a dealer somewhere with a handful of A4's (as that is what they said) that they want to shift to make their sales targets for March.