Pay off PCP with loan

sunshine_rainbows9912

Good afternoon. I hoping for some guidance. 

I have a car on PCP (69 plate car) until November 2025. I currently pay £114 a month and the final payment will be £10,322 whether that is I give the car back, trade it in or buy it. I think the APR is 11 or 12%

From now until then I will pay £1,254 in monthly payments

i can settle the loan now for £10,627 (includes the balloon payment)

I looked at a personal loan for £11,000 at 5 years at 6.5% interest making the payments £214. My worry is this seems a long time to be paying that kind of payment but affordable and the car would be mine. 

My other option I thought would be to sell the car and pay off the finance - I had the car valued at £10,200 so would need to pay £327 extra. I then thought to buy a run around, looking at 2013 car at around 4-5k which I could borrow from family instead of a personal loan. 

Please could I thoughts and guidance?

born_again

sunshine_rainbows9912 said:

Good afternoon. I hoping for some guidance. 

I have a car on PCP (69 plate car) until November 2025. I currently pay £114 a month and the final payment will be £10,322 whether that is I give the car back, trade it in or buy it. I think the APR is 11 or 12%

From now until then I will pay £1,254 in monthly payments

i can settle the loan now for £10,627 (includes the balloon payment)

I looked at a personal loan for £11,000 at 5 years at 6.5% interest making the payments £214. My worry is this seems a long time to be paying that kind of payment but affordable and the car would be mine. 

My other option I thought would be to sell the car and pay off the finance - I had the car valued at £10,200 so would need to pay £327 extra. I then thought to buy a run around, looking at 2013 car at around 4-5k which I could borrow from family instead of a personal loan. 

Please could I thoughts and guidance?

You do not pay balloon payment if you hand the car back.
Only if you keep the car, or trade it in.

You need to look at this in this way. Do you want to keep the car & which will be the most cost effective way to do so.

If you take a 5 year loan than by the time you pay it off the car will be 10 years old. Do you think the car will last that long without needing expensive repairs?

sunshine_rainbows9912

@born_again thank you so much for your quick reply! That’s my worrying, it will be 10 years old by time the the loan would be paid off although I would try pay it off much sooner. That’s why I thought by buying day 4-5k car I would save potential 6k and possibly still need to pay for repairs like I would my current car possibly