End of PCP - What to do ?

Phil Gr · 4 Oct 2020 at 10:49

Well my 3 year PCP deal finishes in Dec on my Golf R - car has been great never missed a beat.

i put the max deposit down on the car so there is money left in the car, I have the balloon payment in the bank so I can pay up and keep the car but......

do I look for another car ( No idea what ) and use the money that’s in the car as a deposit and keep most of the balloon payment in the bank (rainy day money)
pay it off and keep a 3yr old car with no warranty
keep the balloon payment in the bank For a rainy day, get new a new finance deal, keep the 3 yr old car

Thoughts appreciated

Phil

b0rn2sk8 · 4 Oct 2020 at 11:29

The crux of the matter is one question which only you can really answer.

Do you want a new car?

On the finance front, if you got a personal loan to cover the balloon payment you'll likely only pay a few hundred in interest over the course of the loan at the moment which could well be worth it to you.

[TW]Fox · 4 Oct 2020 at 11:29

Phil Gr said:
pay it off and keep a 3yr old car with no warranty

Why not pay it off and extend the warranty?

Phil Gr · 4 Oct 2020 at 12:06

b0rn2sk8 said:
The crux of the matter is one question which only you can really answer.

Do you want a new car?

On the finance front, if you got a personal loan to cover the balloon payment you'll likely only pay a few hundred in interest over the course of the loan at the moment which could well be worth it to you.

This ! - and if im really honest with myself - I'm not that bothered - I keep thinking it would be nice, But in the current climate I'm not doing much driving - is anyone ?

Ill have a look at finance deals, there should some good deals about with the interest rate being so low

[TW]Fox said:
Why not pay it off and extend the warranty?

Didn't think about extending the warranty - ill look into this

Thanks for the replies

Phil

sideways14a · 4 Oct 2020 at 12:09

I bought mine off with another loan to cover the remaining - it was half the cost per month lol

muon · 4 Oct 2020 at 12:11

How much is the balloon payment versus the price of the car?

This is also a Golf R that you know the complete history of and will be worth more to you than others. So keep that in mind.

You also haven't lost your money. If you ever needed it, you can just sell the car. I wouldn't bother financing (paying 3 to 5% depending on what you can get) to try and keep some cash free.

Only reasons for not buying it imo is if you are bored with your car, or want to switch to a used car with less depreciation.

Trifid · 4 Oct 2020 at 12:15

Phil Gr said:
i put the max deposit down on the car so there is money left in the car

Btw, it doesn't work like this. There may be money left in the car but it would be no different to paying the maximum or minimum deposit.

I'd say keep the car if you like it. The decision around warranty is a risk vs ongoing cost analysis, keeping in mind any exclusions the warranty may have. I prefer to pocket the insurance costs and save it for a rainy day.

Raymond Lin · 4 Oct 2020 at 14:50

Is having no warranty that big a deal? Just put aside some slush fund in case something breaks. I've only bought used cars and none of them had warranty (well, they probably did from the garage but never worth the paper they are written on), and never had to use them. If you know the car's history, its reliability, it's service history, how it has been driven, it has value, more value than warranty on another new car IMO.

[TW]Fox · 4 Oct 2020 at 15:18

Raymond Lin said:
Is having no warranty that big a deal? Just put aside some slush fund in case something breaks

VW warranty is fairly cheap.

Conanius · 4 Oct 2020 at 15:20

[TW]Fox said:
Why not pay it off and extend the warranty?

I think this is the obvious choice.

Kenai · 4 Oct 2020 at 15:22

[TW]Fox said:
VW warranty is fairly cheap.

It'll pay for itself when the water pump / thermostat housing gives up, if it hasn't already.

Terminal_Boy · 4 Oct 2020 at 15:31

[TW]Fox said:
Why not pay it off and extend the warranty?

Another vote for this if the OP is happy keeping the car.

Mart2912 · 4 Oct 2020 at 19:49

Yeah, if you're happy with the car, pay it off and go for a warranty extension.

Journey · 5 Oct 2020 at 08:13

Phil Gr said:
I have the balloon payment in the bank so I can pay up and keep the car but......

Did the dealer/finance house do their job properly and ensure your vehicle is worth less than the balloon payment at the end? Or is it worth more, and they got it wrong? This will tip the scales, since if it is worth the GFV or less then buying it seems pointless.

Kenai · 5 Oct 2020 at 11:20

Journey said:
Did the dealer/finance house do their job properly and ensure your vehicle is worth less than the balloon payment at the end? Or is it worth more, and they got it wrong? This will tip the scales, since if it is worth the GFV or less then buying it seems pointless.

Wrong way round, the dealer wants it to be worth more than GFV so they can either convince you to use the 'equity' as your deposit for the next scheme or have a big margin available on the car if you hand it back. They don't particularly want you to just pay it off and keep the car in reality.

If it was worth less than GFV, everyone would be handing back cars that are worth less than what is owed on the finance and the finance companies would take a hiding.

Phil Gr · 7 Oct 2020 at 17:56

The car is worth approx 7k more than the GFV, the dealer is trying to get me to go again but there is nothing that that I’m interested in - the new VW Golf R won’t be out till prob the end of next year

LiE · 8 Oct 2020 at 08:03

Phil Gr said:
pay it off and keep a 3yr old car ~~with no warranty~~ and get a stage 2 tune

Fixed

ahar · 8 Oct 2020 at 09:30

Phil Gr said:
The car is worth approx 7k more than the GFV, the dealer is trying to get me to go again but there is nothing that that I’m interested in - the new VW Golf R won’t be out till prob the end of next year

That's a healthly amount. May be worth paying the GFV, selling the car to pocket the 7k and think about the next move (if you've got something to drive in the meantime).