Renault Zoe PCP pay off early but still return query.
Discussion
We have a Renault Zoe on PCP. Initially, we intended to take a straight bank-loan for the purchase, but a PCP incentive of about £4k made their finance worth taking for that initial bonus.
We took out a bank loan for the total cost less the incentive and our deposit just prior to collecting the car with the goal of paying off the agreement in full after a month.
With the final payment being £4,161 and used values of 3-year-old Zoes with 30k miles being barely £6k at the moment for the battery-leased models like ours, on reflection we are now considering keeping the car on PCP and returning it at the end of the agreement if it is worth less than this final figure. We expect with the newer batteries being developed, used values will plummet further and a return might be our best option.
With this in mind, and £11k sitting in the bank doing nothing but costing us interest, we're considering our choices. RCI Finance has confirmed we can make a partial payment of any amount so long as our monthly payment is at least £7.
Am I right to think that in doing this, the £7 is just paying the interest on the balloon payment? If so, this seems to make sense. We pay as little as possible at their 5-point-something APR, keeping our 3% bank loan for the bulk of the amount, but still get to defer the final £4k payment and return the car in 3 years time if it's worth little to us.
Could someone tell me if I'm making sense or if I need my head checked?
We took out a bank loan for the total cost less the incentive and our deposit just prior to collecting the car with the goal of paying off the agreement in full after a month.
With the final payment being £4,161 and used values of 3-year-old Zoes with 30k miles being barely £6k at the moment for the battery-leased models like ours, on reflection we are now considering keeping the car on PCP and returning it at the end of the agreement if it is worth less than this final figure. We expect with the newer batteries being developed, used values will plummet further and a return might be our best option.
With this in mind, and £11k sitting in the bank doing nothing but costing us interest, we're considering our choices. RCI Finance has confirmed we can make a partial payment of any amount so long as our monthly payment is at least £7.
Am I right to think that in doing this, the £7 is just paying the interest on the balloon payment? If so, this seems to make sense. We pay as little as possible at their 5-point-something APR, keeping our 3% bank loan for the bulk of the amount, but still get to defer the final £4k payment and return the car in 3 years time if it's worth little to us.
Could someone tell me if I'm making sense or if I need my head checked?
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