Refinancing car at end of PCP

2koolkatz

My current car PCP deal ends in January and under normal circumstances I would trade it in and get another car on finance. However, I am going to be in the middle of a house move in January and do not want the extra hassle of changing cars. The other issue is that I am thinking of moving to an EV and will not have a charging point at the new house for a few months.

For that reason, I am looking at options for keeping the car for a further 12 months or so. I have contacted the current finance company and they have given me the option of refinancing over 12 to 60 months. I would have to go for possibly 48 months as I will be financing the full value of the car and want to keep my payments down. However, I will be settling the loan well before the end so will have to pay an early settlement fee. (I am going to ask them for a quote).

The other option is a bank loan which would appear to have a similar APR to my car finance company. This would allow me to buy the car from the finance company. Again, I will be settling early and taking a small hit on the fee for this.

My question is, are there any other options open to me? Were I not moving, I would buy the car outright but the cost of the move is preventing that.

Any advice welcome.

retiredbanker1

Don't buy an EV! is my advice, You pay a lot more than an ICE car and by end of year 3 the depreciation will be eye watering.

I suspect there is a gap in your post - you say that house move prevents you taking out a loan but at the same time you say that if you re-financed the car you would pay it off early. Where will this money come from?

Woodstok2000

Don't buy an EV! is my advice, You pay a lot more than an ICE car and by end of year 3 the depreciation will be eye watering.

This depends very much on what you are buying and what you want to use it for. You won't find many ICE cars a lot cheaper than a Dacia Spring EV. It's definitely not for everyone, but I am saving a fortune in running costs and it more than offsets the additional initial outlay

2koolkatz

I am probably getting my next car on Personal Lease Hire. On a 24 month deal, this would be cheaper than my current deal and I have no interest in owning the car. If financed by a bank loan, I would sell the car to someone like Motorway and then pay off the loan. Ultimately I have a pension pot I could dip into but the tax would make that an expensive option.

2koolkatz

Am I right in saying that going the bank loan route I could sell the car at any time and pay off the loan whereas with the finance company I would have to get a settlement figure from them as well as permission to sell the car.

retiredbanker1

https://forums.moneysavingexpert.com/discussion/comment/82160446#Comment_82160446

You would have to clear the finance before selling the car if you go the HP/PCP route.

A bank loan is not tied to the car so you can do as you please.

2koolkatz

Thanks for that. Not really sure how long I am going to hang onto the current car to be honest, it could be much longer than planned as there will be greater priorities ahead. I am going to investigate the bank loan route as this gives me greater freedom when I do want to sell it. It does let me break free from the current finance trap as well.

Nasqueron

https://forums.moneysavingexpert.com/discussion/comment/82160346#Comment_82160346

ICE are much more expensive to run and maintain especially with fuel costs, they typically work out cheaper long term

ICE and EV depreciate at the same level, average of EV is 38-42% and ICE 35-40% over 3 years

prowla

If you are paying off the balloon to buy your current car then you effectively buying a used car of which you know its history and precisely what condition it is in; I did that with my current main car and I prefer it to the newer models anyway.

On the flipside, going for a new one shouldn't be a lot of hassle and you'll be starting off with something where all of the consumables (eg. tyres & brakes) are new too; if it's the same brand & retailer then they can handle any transition payments.

retiredbanker1

https://forums.moneysavingexpert.com/discussion/comment/82160528#Comment_82160528

In your dreams LOL

EV's drop like a stone after 2or 3 years - battery dedregration (whic doesn't happen to ICE)

One little bump and you could find your EV car written off.

Altior

If the vehicle has equity you could sell it and get a run around for a year.