End of PCP and wait for new car

talltom79

We are two years into a three year PCP on a new car. I haven't had PCP before. What happens at the end of the PCP term if I go to the garage and try to do a deal on a new car (using extra equity as deposit) but it then takes another 8-10 months to receive the new car, which is the current predicted waiting time (maybe it will have gone down by then, but who knows)? Would the finance company (Ford) and/or the garage (also Ford) do some kind of extension on the PCP on the current car till the new one arrives? Do monthly payments generally stay the same in this scenario (if it's possible at all) or do they change radically?

iwb100

They might extend it but you should be doing it now given the wait. You don’t need to wait till the end of your deal. 

shiraz99

Generally you may get an extension for a month or two, I did when my new car was delayed, but that's at the discretion of the dealer/finance company and usually if it's an unexpected delay. They won't extend for a normal build period and certainly wont for 8 months or more, so if you want to change to a new car, now's the time to start making enquiries.

Grumpy_chap

I agree with others that it is pertinent to start making enquiries early.

If your Dealer was on the ball, they would be reaching out to you making an early offer to change with the surety on timescales.

I suspect the ability to extend the PCP will depend on whether you are staying with the same brand. 
If you choose to swap the Ford for another Ford, then they won't want to give you any reason to buy anything else from anywhere else.
If you choose to swap the Ford for, say, a VW, then Ford won't want to be helpful in facilitating that and will possibly try to tie any flexibility to returning to Ford again.

Ectophile

An alternative is to find a source of finance (e.g. a bank loan), and pay the balloon payment at the end of the PCP.  Then you can keep the car for as long as you want.

Given that the lifespan of the average car in the UK is about 13 years, you could even decide that a 3 year-old car is nearly new, keep it a few more years, and not lock yourself into an endless sequence of finance deals on shiny new cars.

iwb100

Ectophile said:

An alternative is to find a source of finance (e.g. a bank loan), and pay the balloon payment at the end of the PCP.  Then you can keep the car for as long as you want.

Given that the lifespan of the average car in the UK is about 13 years, you could even decide that a 3 year-old car is nearly new, keep it a few more years, and not lock yourself into an endless sequence of finance deals on shiny new cars.

Well yes. But where is the fun in that?

If you want to keep the car then do that at the start to avoid interest.

I’d advise the OP to look at PCH lease deals too as these may be more competitive than a PCP. 

talltom79

Ectophile said:

An alternative is to find a source of finance (e.g. a bank loan), and pay the balloon payment at the end of the PCP.  Then you can keep the car for as long as you want.

Given that the lifespan of the average car in the UK is about 13 years, you could even decide that a 3 year-old car is nearly new, keep it a few more years, and not lock yourself into an endless sequence of finance deals on shiny new cars.

It's a fair point. We haven't had a brand new car before, or a PCP plan, always bought second hand cars with full payment up front. The low cost of servicing and maintaining a brand new car for the first three years is a massive plus. With second hand cars it's more of a lottery and stuff goes wrong more often. So the predictability of a monthly payment and few extra unforeseen costs and high reliability are all good. We got a really good deal on a showroom model in August when they needed it off their books. The monthly payments (0%) over three years aren't all that different to what we might have spent on a second hand car (not including the extra bills) and there is a lot of extra equity building up in the car due to second hand prices going up at the moment. I appreciate it's not an exact science and there are plusses and minuses on both sides, and that equity could go down again. But it's quite a good way of owning a car without having to save up for one first.

Grumpy_chap

If you buy the current car from the end of the PCP you know how well it has been looked after and whether it is reliable (or not) so can keep the older car without the same level of unknown about the maintenance costs.

Ectophile

In my experience, cars tend to be pretty reliable up to about 10 years or 100,000 miles. They will require some maintenance, but a year's repairs (not including regular servicing) will usually only be the equivalent of one or two month's finance payments on a new car.

Once they do get older, it becomes a case of deciding if the latest problem is worth fixing, or if it's time to get rid of it.