Taking a Loan to settle my PCP
Discussion
Hi,
Looking for some opinions if this is a good option to get out of my PCP agreement. It's not a matter of not being able to afford it at all, my circumstances have changed in the last year...
I have a 61 plate Audi A1 1.6 TDI S-Line which I purchased in 2014 whilst I was living with my parents and had a daily commute of 15 miles to and from work. So as you do I agreed to an annual mileage and all was well and good. Fast forward 2 years and I moved in with my partner and the commute is now a 55 mile round trip, so as you can imagine, I'm now at a real risk of going over my mileage and will have a few thousand to pay at the end of the agreement if I wanted to keep the car.
For the last couple of months I has access to another car which I was using to commute to keep the mileage on my own car down, at least until such times that I could start using it again without fear of going too far over the total mileage at the end of the agreement.
I have another 15 months left on my agreement and the optional amount to pay at the end. I don't want to be stung at the end of the agreement with excess mileage charge and be in a position where I owe more than the car is worth obviously. I checked and I have a settlement figure which is much better than I ever imagined it would be £7048, companies like We Buy Any Car would offer close to £7300 for my car just now but then of course I'd be paying it off but have no car. I'm now thinking about potentially taking out a loan, paying the settlement figure and then I have my car which is reliable, well looked after and a good brand with good resale potential with no cap on mileage for another few years. Plus I might even get a little something back in a few years time when the loan is settled and the car is still looking great albeit with a good bit of mileage. Yes, it means I'll be paying a loan for a few more years, but the car will be mine.
Has any one gone down this route before? Do you see any cons to this? Any one think of a better option?
Thanks,
J
Looking for some opinions if this is a good option to get out of my PCP agreement. It's not a matter of not being able to afford it at all, my circumstances have changed in the last year...
I have a 61 plate Audi A1 1.6 TDI S-Line which I purchased in 2014 whilst I was living with my parents and had a daily commute of 15 miles to and from work. So as you do I agreed to an annual mileage and all was well and good. Fast forward 2 years and I moved in with my partner and the commute is now a 55 mile round trip, so as you can imagine, I'm now at a real risk of going over my mileage and will have a few thousand to pay at the end of the agreement if I wanted to keep the car.
For the last couple of months I has access to another car which I was using to commute to keep the mileage on my own car down, at least until such times that I could start using it again without fear of going too far over the total mileage at the end of the agreement.
I have another 15 months left on my agreement and the optional amount to pay at the end. I don't want to be stung at the end of the agreement with excess mileage charge and be in a position where I owe more than the car is worth obviously. I checked and I have a settlement figure which is much better than I ever imagined it would be £7048, companies like We Buy Any Car would offer close to £7300 for my car just now but then of course I'd be paying it off but have no car. I'm now thinking about potentially taking out a loan, paying the settlement figure and then I have my car which is reliable, well looked after and a good brand with good resale potential with no cap on mileage for another few years. Plus I might even get a little something back in a few years time when the loan is settled and the car is still looking great albeit with a good bit of mileage. Yes, it means I'll be paying a loan for a few more years, but the car will be mine.
Has any one gone down this route before? Do you see any cons to this? Any one think of a better option?
Thanks,
J
I bought my car on a 2 year PCP on a 6,000 year agreement and ended up with 40,000 miles on the clock due to a change of job. I took out a personal loan in February this year to pay the balloon and a recent We Buy Any Car Valuation is broadly the same as I owe on the personal loan despite the high miles, which is reassuring.
Assuming loan rates stay low you're better off keeping the car till the end of the agreement and taking a loan to clear the 7 grand owed imo.
Assuming loan rates stay low you're better off keeping the car till the end of the agreement and taking a loan to clear the 7 grand owed imo.
Edited by anonymous-user on Wednesday 3rd May 17:08
Chances are that in your third year, you may want to part ex the car for something else, which means the mileage becomes irrelevant. I would not be worrying about it too much.
Many people take on PCP agreements on minimum mileage to bring their payments down and will not face the excess mileage clause as they do not intend to keep the car.. I hear the average person on PCP keeps a car around 3 years, then they chop it in for the latest and greatest model..
G
Many people take on PCP agreements on minimum mileage to bring their payments down and will not face the excess mileage clause as they do not intend to keep the car.. I hear the average person on PCP keeps a car around 3 years, then they chop it in for the latest and greatest model..
G
It seems a pretty sensible thing to do.
You can get a car loan for around 3% apr at the moment thorugh places like Hitachi Capital and the like, so over 36 month £220, 48 months £170, or £140 over 60 months.
You can put as many miles as you like on it, you will owe nothing but the car will still be worth something at the end.
I bet you are paying 10-12% apr from Audi?
You can get a car loan for around 3% apr at the moment thorugh places like Hitachi Capital and the like, so over 36 month £220, 48 months £170, or £140 over 60 months.
You can put as many miles as you like on it, you will owe nothing but the car will still be worth something at the end.
I bet you are paying 10-12% apr from Audi?
Gio G said:
Chances are that in your third year, you may want to part ex the car for something else, which means the mileage becomes irrelevant. I would not be worrying about it too much.
Many people take on PCP agreements on minimum mileage to bring their payments down and will not face the excess mileage clause as they do not intend to keep the car.. I hear the average person on PCP keeps a car around 3 years, then they chop it in for the latest and greatest model..
G
Not sure that makes sense. Shirley if you don't intend on keeping the car then the excess mileage clause is very relevant?Many people take on PCP agreements on minimum mileage to bring their payments down and will not face the excess mileage clause as they do not intend to keep the car.. I hear the average person on PCP keeps a car around 3 years, then they chop it in for the latest and greatest model..
G
crouchingpigeon said:
Gio G said:
Chances are that in your third year, you may want to part ex the car for something else, which means the mileage becomes irrelevant. I would not be worrying about it too much.
Many people take on PCP agreements on minimum mileage to bring their payments down and will not face the excess mileage clause as they do not intend to keep the car.. I hear the average person on PCP keeps a car around 3 years, then they chop it in for the latest and greatest model..
G
Not sure that makes sense. Shirley if you don't intend on keeping the car then the excess mileage clause is very relevant?Many people take on PCP agreements on minimum mileage to bring their payments down and will not face the excess mileage clause as they do not intend to keep the car.. I hear the average person on PCP keeps a car around 3 years, then they chop it in for the latest and greatest model..
G
A bit late to the thread - my suggestion would be to keep the current finance agreement - your monthly payments will predominantly be paying off capital now and a new finance agreement will see you starting afresh with another load of interest.
If you want to keep the car at the end - get a loan to pay the balloon payment then.
If you want to keep the car at the end - get a loan to pay the balloon payment then.
A bit late to the thread - my suggestion would be to keep the current finance agreement - your monthly payments will predominantly be paying off capital now and a new finance agreement will see you starting afresh with another load of interest.
If you want to keep the car at the end - get a loan to pay the balloon payment then.
If you want to keep the car at the end - get a loan to pay the balloon payment then.
Keep the current loan going.
As others have said, best case you want the car and can finance he balloon then or if you don't want the car WBAC or similar may give you more than the GFV.
Worst case, you don't want the car, value is below GFV and your miles ahead on the limit VT the finance contract a month or 2 before it expires (or when paid 50% of the total amount of credit inc balloon) and give the car back with nothing owing.
As others have said, best case you want the car and can finance he balloon then or if you don't want the car WBAC or similar may give you more than the GFV.
Worst case, you don't want the car, value is below GFV and your miles ahead on the limit VT the finance contract a month or 2 before it expires (or when paid 50% of the total amount of credit inc balloon) and give the car back with nothing owing.
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