Car Loan- PCP, bank loan or just keep current car?
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Comments
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Cheers guys.
I will be able to afford the repayments. I'm really not that bothered about the car I drive, in a keeping up with the Jones's sense, but I do about 100 miles a day so I need a car that is reliable and not going to leave me stranded on the m6 (where I spend much of my life.)
Based on all that has been said, I have done some calculations.
Option 1: Keep my car on current finance deal (7.7% APR) and finance balloon payment at end. This would mean that by 2022 I would have paid £9,500ish (12 payments of £250 plus the loan repayments of a £6,161 option to purchase price). I would own a 6 year old car that had done 90k miles.
Option 2: Keep my car, and re-finance now: This seems to work out at roughly the same price as option 1. I get a loan for 9k (settlement figure) and pay £250 for 38 months. I own a 6 year old car with 90k miles.
Option 3: Go for the MINI cooper. by 2023 paid £9,599 (still owe 3,978) but just give car back and start again with another finance deal and not worry about that £3,978.
Option 4: Seat Ibiza (which from my research is a good deal for the spec and mileage of the car). by 2023 spend £9034 owe nothing else. Own a 7 year old car that has done 76k miles. Part exchange it for another car worth about 9k and finance hopefully less than this time. Be ok with the fact I have rented my current car for 3k for the past 3 years, and just hand it back.
Now to me, option 4 is the clear leader. Unless I am missing something...0 -
MINI have nearly convinced me that no one owns a car anymore and that PCP makes much more financial sense. I have read conflicting advice on web forums!
You must be a salesmans' dream. A salesman (and car salesmen in particular) will tell you anything that he has to, whether it is true or not, to get you to agree to a deal and if you are gullible enough to believe the above statement you are putty in his hands.0 -
If you want to think with your head - you have this car, you know how well (or not) you have cared for it, how the service history is etc. Given that, it's a clear no brainer to keep the car, assuming you cared for it, rather than throwing more money at a new car which costs you more in the long run. Do you know you can get a 2% or 2.5% bank loan or is that just what you have been offered without a proper credit check? Can you work more, sell stuff, earn extra money, save more through cutting back spending etc to cover the balloon? Or maybe get a smaller loan for it? 7.5k for example and ensure the car is given a proper service? Remember also you haven't mentioned the mileage of your car and if it's within your agreement as that will affect the trade in/GMV.
You say you want to think with head not heart yet all the options, except keeping your car involve risk (you don't know how the cars have been looked after - a 4 year old car with 8k miles? Smacks of lots of short runs to the supermarket and never being run anywhere) and being in debt for a long time. A 6 year old car is nothing these days except to snobs, I see 51 plate cars on the road still running, let alone the old reg style. That car could last you another 12 years easily with the right care
Incidentally PCP is perfectly fine if you understand it, particularly if you get 0% finance and have the money ready to pay the balloon. Mine was new on PCP at 0%, rather than spend all my cash in one go it say in bank accounts earning interest and then I paid off the balloon at the end0 -
If you want to think with your head - you have this car, you know how well (or not) you have cared for it, how the service history is etc. Given that, it's a clear no brainer to keep the car, assuming you cared for it, rather than throwing more money at a new car which costs you more in the long run. Do you know you can get a 2% or 2.5% bank loan or is that just what you have been offered without a proper credit check? Can you work more, sell stuff, earn extra money, save more through cutting back spending etc to cover the balloon? Or maybe get a smaller loan for it? 7.5k for example and ensure the car is given a proper service? Remember also you haven't mentioned the mileage of your car and if it's within your agreement as that will affect the trade in/GMV.
You say you want to think with head not heart yet all the options, except keeping your car involve risk (you don't know how the cars have been looked after - a 4 year old car with 8k miles? Smacks of lots of short runs to the supermarket and never being run anywhere) and being in debt for a long time. A 6 year old car is nothing these days except to snobs, I see 51 plate cars on the road still running, let alone the old reg style. That car could last you another 12 years easily with the right care
Incidentally PCP is perfectly fine if you understand it, particularly if you get 0% finance and have the money ready to pay the balloon. Mine was new on PCP at 0%, rather than spend all my cash in one go it say in bank accounts earning interest and then I paid off the balloon at the end
I have cared for it really well- fully serviced, no real wear and tear. Its done 45,000 miles- which is 4k over the excess mileage. I have been offered a 2.5% bank loan yes. I could save for the next year and get out a smaller loan. That is actually a very good suggestion.
Interesting, for some reason I have 90k as being a car that is likely to have a lot of issues and cost me a lot in repairs. Why would short runs be a problem for a car? Sorry if that is a really obvious question!0 -
You must be a salesmans' dream. A salesman (and car salesmen in particular) will tell you anything that he has to, whether it is true or not, to get you to agree to a deal and if you are gullible enough to believe the above statement you are putty in his hands.
ha! I am literally a salesman's dream. But, a newly self aware salesman's dream, hence the 1000000 hours of agonizing over this decision. :money:0 -
8.7k for a 1.0 2016 seat Ibiza?
Seems expensive to me.
I would walk away, get yourself a bank loan, shop around and get something cheaper.
I would also love to know where you can get a bank loan for 2%!0 -
Smellyonion wrote: »8.7k for a 1.0 2016 seat Ibiza?
Seems expensive to me.
I would walk away, get yourself a bank loan, shop around and get something cheaper.
I would also love to know where you can get a bank loan for 2%!
Halifax; the woman who did it for me, said it was a very unusual (but obvs great for me!) rate. I have a pretty decent credit rating so I'm assuming it's that.0 -
I have cared for it really well- fully serviced, no real wear and tear. Its done 45,000 miles- which is 4k over the excess mileage.
That will mean an excess charge if you hand it back (the VT mileage issue is a bit hit and miss) but you know how the car has been treated well, why risk that for a car that might be a money pit?I have been offered a 2.5% bank loan yes.
That's not what I asked
Offered subject to credit check? Remember only 51% of applicants have to get an advertised rate, what if they give you 5%?I could save for the next year and get out a smaller loan. That is actually a very good suggestion
Take action now, post a statement of affairs on the debt free page, maybe they can help you save more and spend less - 6k is obviously steep but each bit helps reduce the debtInteresting, for some reason I have 90k as being a car that is likely to have a lot of issues and cost me a lot in repairs. Why would short runs be a problem for a car? Sorry if that is a really obvious question!
Owner's manual should have schedule of work that is likely needed, all I can see on a quick hunt on google is spark plugs at 90k but I am not a mechanic0 -
That will mean an excess charge if you hand it back (the VT mileage issue is a bit hit and miss) but you know how the car has been treated well, why risk that for a car that might be a money pit?
That's not what I asked
Offered subject to credit check? Remember only 51% of applicants have to get an advertised rate, what if they give you 5%?
Take action now, post a statement of affairs on the debt free page, maybe they can help you save more and spend less - 6k is obviously steep but each bit helps reduce the debt
Owner's manual should have schedule of work that is likely needed, all I can see on a quick hunt on google is spark plugs at 90k but I am not a mechanic
I've had the credit check- sorry i'm not very clear. I literally have the paper work in front of me a £8500 loan with 2.5% APR
My settlement fee is pretty close to what market value is for the car.
I have decided, I am going to use the bank loan to pay the settlement fee.
PHEW DECISION MADE!
THANK YOU EVERYONE!!0
This discussion has been closed.
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