Best or quickest way to pay off PCP!

Beatles4

I really need a house, but really struggling!

I realise my car finance and other money issues (Like child care etc) are getting in the way and I need advice on paying off my PCP as quickly or best way possible.

Have around 12K left to pay off on finance, with a little less then two years, plus a balloon payment at the end, do I get a bank loan out to pay off in one go or just carry on paying off my PCP till it ends?

Help!

Thankyou!

Grumpy_chap

What is the current value of the car?
What is the current settlement figure?

A solution may be to sell the car, clear the finance, buy a cheap car and then use the money released from the monthly car payment to save a house deposit.

MalMonroe

Hi, I can sense panic here - maybe it's the exclamation marks . . . 

Don't act in a rush though. 

I also have a car on PCP and contacted the finance company a couple of weeks ago to ask if I would be allowed to sell the car and use any profit to pay off the PCP early, without penalty - and was advised that yes, I would.   

My PCP is with the dealer's own finance company. (Toyota)

Is that a possibility for you? As Grumpy_chap suggests above, you could then buy a cheap car and use the money released from the monthly car payment to save a house deposit.

It makes sense to me and you wouldn't then be tying yourself to a loan that will possibly cost you more, will show up on your credit report and won't benefit you in the long run. 

macman

To state the obvious, if you borrow £12k from your bank to pay off a £12k PCP debt, then you'll still have a £12k debt showing on your credit history.
And you'll have £12k less credit available should you need to borrow again in 2 years to make the balloon payment.
If you don't have £12k in savings now, how do you intend to raise the deposit for a property purchase? 

Herzlos

Car prices have gone bonkers since you took out the PCP (I'm assuming 2 years ago on a 4 year term), in which case you may find that it's worth more than the outstanding balance.

That'd then mean you could either sell it and walk away with some spare money, or more reasonably trade it in for something cheaper.

What does webuyanycar.com think it's worth?

Clive_Woody

Beatles4 said:

I really need a house, but really struggling!

I realise my car finance and other money issues (Like child care etc) are getting in the way and I need advice on paying off my PCP as quickly or best way possible.

Have around 12K left to pay off on finance, with a little less then two years, plus a balloon payment at the end, do I get a bank loan out to pay off in one go or just carry on paying off my PCP till it ends?

Help!

Thankyou!

That sounds like you would just be shifting a car loan to a personal loan. The actual debt amount would not change (you might get a better APR on the personal loan). Would you be in a position to make over payments to clear the debt sooner?

As mentioned, selling the car to clear the debt is another option - check with your lender first.