Car ownership

[nicholab]

I would like to move away from PCP car financing. Our PCP come to end next year. I was in a position to buy my car finance free but my wife’s / our main car is on PCP.

 

Is it worth selling the car if it value is more than the PCP final settlement? Or would you take the car and finance the money? Or use all your savings to pay it off?

 

How would you do it and how would you encourage the other half of a good idea?

[TheHyperTechie]

I feel as though this is the issue with PCP, they are very much designed for customers who will continue to use the 3 year 'swap-in swap-out' system. If it was me and the balloon payment at the end was potentially less than the value of the car... I would probably use my savings to make the payment and then sell the car privately.

[howartp]

I took a bank loan out to pay off the balloon and retain the car.

 

Payments are less than I was paying PCP and the car is running fine so I'm not worried about it.

 

It's also still under GAP top-up insurance which I renew every year.

[AlistairB1983]

In reality, a lot of suggestions as to what to do will be very dependent on your individual circumstances.

 

If the trade value is more than the balloon payment, should you buy it and sell it? Potentially, yes. But do you then need to buy another car? In which case, is the trade value sufficient to buy what you want? No use selling a £10k car that you 'paid' £6k for, if the car you actually want to drive is £20k. Unless, that is, you plan on using it as a deposit on another PCP to bring down the monthly repayments (or similar).

 

Is it worth taking out a loan to pay off the balance? Potentially, yes. Again, it depends on the affordability of the loan repayments compared to PCP monthly cost and also whether you want to continue to have this monthly expenditure.

 

What about paying it off with savings? Again, potentially sure. But do you prefer to have some cash available 'just in case'? In which case spending it all on paying off the car will deprive you of this, but it would mean your monthly costs go down signficantly.

[PotNoodleTech]

My humble opinion - PCP simply allows you to have a car you wouldn't ordinarily be able to afford, so if you want to transition from PCP to paying up front and owning your car outright, most people would need to downgrade to a car they can afford, come down a model or two on the car or go a bit older.

 

Either way owning your own car is the way forward I wouldnt touch PCP etc with a barge pole even if I won the lottery.

[DavonPotter]

When deciding on car financing options post-PCP, it's definitely a balancing act. Selling the car if it's worth more than the final settlement could be a smart move financially. Alternatively, financing the remaining amount or using savings to pay it off outright both have their merits depending on your financial goals and situation. Communication with your spouse about long-term financial strategies is vital; showing how each option impacts savings, future expenses, and overall financial stability might help find a shared solution.

[Theblacksheep]

Is it worth selling the car if it value is more than the PCP final settlement? Or would you take the car and finance the money? Or use all your savings to pay it off?

 

If it's worth more than the final value you can buy the car cheaper than anyone could. So depends if you want to keep it or get something newer.

 

I wouldnt use all savings, personally I look at a loan if you want to keep it or newer deals.