Car PCP balloon payment or hand back

Financial Chat
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I have a car finance dilemma. My four year PCP car finance plan is coming to an end on 1st January. I have a car that I still like and it has significantly less mileage that the PCP allowance, in four years I’ve done 15000 miles (up to 24000 was allowed under the plan). The car is also in great condition.

I would normally take a new car at the end of the 4 years, but it’s been tricky to test drive cars given the lockdown. My options at the moment are to hand the car back and start again next year once things settle down Covid wise (I have access to my husband’s car and I’m currently working at home) or I pay the balloon even though the balloon is £1600 more than the trade in price.

Am I nuts to pay the balloon? Or is it worth it given the low mileage?

I’m going around and around the houses with this so any thoughts would be appreciated.

Thanks.

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Hand it back, put what you would be paying each month into a pot pretending you are in contract and act like savings. Don’t pay the balloon, hold that back, and use some towards the deposit.

Always a better car out there, even compared to 2016. Be that a nicer electric or higher spec etc

Without knowing how much and what car, I mean £250 over six months what’s that £1500. And who knows if you might be able to continue working from home.

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I agree with the above too. Then personally I’d try to get a car on hire purchase so when it ends you’re not stuck with a balloon payment or back to square one.

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You should get your car valued first before you make any decisions. You can do this quickly on WeBuyAnyCar, or take it to a garage and see how much they’d give you in part exchange.

Let’s say the settlement figure (balloon) is £20k, and because you’ve done low mileage, your car is worth £23k, then it’s worth it for now. You’re basically buying a £23k car for £20k, and you can always look to part exchange this car later in the year when showrooms are more readily available to offer you a test drive.

But, if the low mileage hasn’t made a difference, and your car is worth say £18k, then paying this £20k settlement is basically overpaying for that car. That’s the point of a PCP, that you’ve got the option to hand the car back at the end of your agreement and walk away. You’d only pay the balloon in this instance (and therefor overpay for your car), if you absolutely knew that you were not going to want to part exchange it again in the next year or two.

Source: I sell cars for a living :slight_smile:

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Thanks very useful!

The settlement is £9464 and WeBuyAnyCar value it at £8000 so it sounds like I should be handing it back to the finance company.

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WeBuyAnyCar isn’t really a good place to get things valued up at. They offer outrageously low prices for cars and find faults everywhere to further lower the offer

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One thing to bear in mind though is that if you hand the car back the finance company will bill you for every single little bit of damage on the car, sometimes at wildly inflated prices. I’ve heard some real horror stories from people who have VT’ed their vehicles.

I know you’ve said the car is in great condition, but I would get every single little bit of damage sorted before you hand it back. That means any alloys that are scratched refurbished and chips sorted too. Make sure you take lots of photos of the condition of the car when you hand it back too so that the finance company can’t come back a few weeks later saying you owe them £££.

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I’d probably counter this with - I didn’t. And I didn’t get stung on pricing.

What company is it financed with?

Most now send out British Car auctions to do the handover, and they fully examine the car with you and you agree all extras together.

I got sent a price list before handover, and decided not to refurb the alloys as it was cheaper to hand it back and get them to do it. The compressor cannister thing for the puncture repair kit was cheaper to buy from Audi, so did that.

If you’re after a new car, get it quoted as a part exchange - then negotiate the price down on the new car etc - CarWow is great for this.

Alternatively VT the car, and switch to leasing. :stuck_out_tongue:

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This is very true. I’d add a couple thousand ontop of what they quoted.

I use AutoTrader to get a rough idea of the value of my cars. You can search on make, model, millage and features to find ones almost identical to yours. Autotrader then mark them as ‘fair price’, ‘low price’, ‘high price’ etc so you can work out a reasonable price you’d get for it should you put it up for sale.

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I don’t sell cars for a living but WeBuyAnyCar is possibly the worst place you could get an estimate closely followed by Evans Halshaw

@Ordog example of Autotrader makes the most sense.

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I’d also add that potentially a 4 year old car may need more maintenance and therefore your costs go up.

I don’t think I’ve test drove a car in last 15 years.

I bought a car over the summer - sat in a model in showroom made sure rear window was fine then bought it.

Webuyanycar is linked to auction price for the car. You will always get more at a trade-in especially same brand dealer.

January usually is not the busiest month for car sales - best deal I’ve ever had was a car bought in January.

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How do you check that. Just look and if it’s there all is good? :sweat_smile:

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Sit in it and look through rear window. My pet hate is crap vision out of rear glass.

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I’m not worried about this. I’m literally someone who cleans the alloys with a toothbrush and I have double layered carpet mats inside the car! There are no marks on the alloys, no dents and a tiny tiny, can barely see it chip on the drivers door.

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No problem! There’s a few people on here mentioning that you can get more for your car by selling it yourself, which is absolutely true. But the WeBuyAnyCar pricing is backed by BCA (British Car Auctions) so you’ll likely find the dealerships won’t give you very much more than what they’re offering. And likely not the £1500 more you’d need, just to match your settlement.

If your question was about how to sell a car and make the most money, then yes, WeBuyAnyCar is the wrong place to look. But as a quick tool to give you an initial idea as to whether buying the car, or handing it back, is the best option, I think it gives you the info you need.

If you’re actually at the end of your contract, and are in a position to simply hand the car back, then you’ve got to weigh up the simplicity of that, vs trying to sell you car yourself, and everything that comes with.

Good luck anyway!

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My comment on webuyanycar is that it produces quotes which are far below the value of the car, so aren’t great at getting a realistic £

What I believe @Ordog and myself was pointing out is simply the AT evaluation. Enter reg and mileage, and press show and see what value it has under part exchange. Takes literally 30 seconds.

I can bet if it said £15000 part ex on AT as a fair price (£16000+ in excellent) and you tried the same under webuy it would be £12000 at most. They aren’t there to show a fair price, it’s heavily stacked in their favour, and why not more profit for them if they can convince it’s worth less than it should :neutral_face:

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WeBuyAny car is good if you just want to quickly sell your car and you’re not bothered paying for the privilege.

I’ve tried them with 2 cars. Even if the online quote they give is reasonable they ask you to bring the car in and that’s when they hammer the price down further.

They inspect the car and if you have a small scuff on an alloy they’ll knock £100 off. Tiny stone chip on a panel? That’s -£500 at least.

So once you get your quote, expect it to be reduced even further after you book an appointment.

Again, if you’re on a mission to maximise your profits, get the bits they find fixed yourself. Chips are inexpensive to touch up and you can generally get full alloys refurbished for ~£50 each.

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They offered me £600 for a banger I wanted to sell. After inspection it was revised to £125, and with their various fees I would’ve received £75

Probably worth more as scrap

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Can’t find a better place to ask and thought I’d revive an old topic rather than create a new one.

Those who have p/x’d a car that was still on finance, how long did it take for the finance to be settled by the dealer? They say they sent the paperwork off on Monday but it’s still showing as an active loan and I really don’t want to pay two monthly payments on two separate cars come 1 July…

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Done this a few times over the years and very occasionally this happens with the payments.

Long story short speak to the finance company direct, they will solve this for you and if there are any additional payments refund you.

In your case assuming they are two different companies the one you’ve settled will realise and either stop the payment or refund it let if it’s taken.

If it’s the Same they’ll work it and adjust.

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