approaching end of PCP - what's more convenient?

manub
manub Posts: 137 Forumite
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in Loans
I'm 6 months away from the end of my 48 month PCP plan and I've received a letter telling me that I could either get another car, make the final payment or return the car. My idea is to keep the car (I'm not 100% satisfied but I don't want to start another PCP with a new car right now, also considering I don't have enough money set aside to put a deposit), and get a loan / dealer finance to pay the final payment. My credit history is pretty good, and I saw that I could get a 4 year loan for the amount of the final payment for roughly 20% less than what I pay for the car currently (I've got a stable income).

Dealer approached me to get my car evaluated and to talk about re-financing (I would suspect though they won't be able to beat the 2.8% interest on the loan) and I'm going to meet them.

Apart from my default stance of keeping the car and paying the final payment with whatever finance is cheaper, do you think there's anything else I need to consider that could make more convenient to change my mind (for example they value my car more than the final payment)? I never dealt with PCP before and there seems to be many options on the table.

Thanks!

Comments

  • Penelopa.Pitstop
    Penelopa.Pitstop Posts: 1,145 Forumite
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    If dealer values your car more than final baloon, it's even better for you. You will be buying it from finance company below it's real value. If value of the car is much lower than outstanding baloon payment, I would consider other options. Like buying similar car for less than you would have to pay for your's to keep.
  • Clive_Woody
    Clive_Woody Posts: 5,853 Forumite
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    Unless you have applied already and have a formal loan offer for 2.8% APR then there is no guarantee that you would be offered a loan with this rate. Don't take it for granted as you may get a much higher APR which would obviously affect monthly repayments.

    Having a good credit history and significant earnings are great first steps to getting a good loan rate, but there are many factors that are taken into account when a lender makes a loan offer.
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    If you have applied for the loan and received an offer with that interest rate I would just pay the final balloon payment and keep it for at least 4 years. I wouldnt even bother walking into the showroom and listen to whatever the salesperson tries to sell you.
  • robber2
    robber2 Posts: 558 Forumite
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    Corrected for you


    manub wrote: »

    Dealer approached me to [STRIKE]get my car evaluated and to talk about re-financing (I would suspect though they won't be able to beat the 2.8% interest on the loan)[/STRIKE] sell me another new car and I'm going to meet them.

    Apart from my default stance of keeping the car and paying the final payment with whatever finance is cheaper, do you think there's anything else I need to consider that could make more convenient to change my mind (for example they value my car more than the final payment)? I never dealt with PCP before and there seems to be many options on the table.

    Thanks!
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