Do many people pay the GFV and keep the car?

[carparkno1]

So we're coming to the end of our 3yr PCP on a Ford Focus estate. Car has been excellent, no complaints, and we're coming in at 27k mileage, well down from the 36k we set the PCP up on. Final balloon is £7500, which we can afford to pay outright.

Missus loves the car, but it is getting a bit tight with the expanding family, but no sudden rush to change. I've suggested we buy it outright and then either sell it privately or keep going with it for a while, as I believe it is worth more than the GFV. Missus in agreement which is good and has no desire to traipse the forecourts right now and have another manufacturer buy it etc.

I mentioned this to the dealer who was incredulous - my assumption is he wants to roll us into a new car using any positive equity etc. Canvassed a few neighbours and they all seem to do it as well - no leasing, just all on PCPs and swap after 3 years.

So I guess the question is am I being smart or am I missing something obvious? It seems to me to make financial sense as the car will be worth more (indeed even WBAC are offering £1500 over the GFV), so am I a madman here? Does everyone else just roll into a new one? I fancy a Skoda Kodiaq down the line but at a time of our choosing and maybe even by lease (which means selling the Focus privately).

All experience / opinion welcome!

[troika]

If the car is good and serves you well, pay it off and keep it rather than be on a perpetual wheel of debt.

[djc206]

I think the majority get a new car but like you say if you like it, it works, it’s worth more than the final payment then your plan is perfectly sensible. The dealer is probably disappointed but then he need not be involved as it’s between you and Ford Credit anyway.

[Nickp82]

The answer to the question is no, not many people pay the GFV, I very rarely heard of it happening in my time in car retail (although admittedly if the customer does this they obviously may not contact the dealer). In your situation it sounds like a good idea though.

[carparkno1]

Thanks - helps confirm my thinking. I think sometimes people don't separate "dealer" from "credit provider" I guess? The car is excellent, and my only concern was the known ecoboost issues although ours came out with the refit already in so should be okay.

We will need something bigger soon, but am desperately trying to sell the idea of a much bigger estate rather than some big SUV with poor boot space - the Kodiaq looks like a bit of a compromise between us but I don't want to rush in if we don't need to, hence paying the balloon and giving us time to think. I've asked for a trade in value anyways, but I guess that might be artificially high to get us to roll into a new deal so will take it with a pinch of salt.

[Sheepshanks]

carparkno1 said:

I mentioned this to the dealer who was incredulous - my assumption is he wants to roll us into a new car using any positive equity etc. Canvassed a few neighbours and they all seem to do it as well - no leasing, just all on PCPs and swap after 3 years.

I don't know if salemens' incredulity is genuine, or just designed to make you feel you're doing the wrong thing, but one of our daughters had a Honda on a 2yr 0% PCP and the dealer called and wanted to put her in a new one for the same monthly, but over 3yrs. He was completely gobsmacked when we said no. I asked him what the GFV was and he seemed genuinely baffled by why I would want to know that.

Other daughter has just ordered a SEAT Ateca and I asked about the 4th & 5th warranty as it's realtively cheap if ordered at the same time as the car. Salesman looked at me like I was mad - he said "no-one" keeps their car that long - he sells on 4yr PCPs and then changes people out at 3yrs.

It does strike me that if people are going to do this, then leasing would often be better - although I looked at the numbers on the Atcea and lease and PCP come out about the same over 3yrs.

[PistonBroker]

My folks rolled over every 3 years on each of their PCPs since 1993 and 1994 respectively. But they paid the GFVs on their MINI and Jazz - I think Dad's MINI is 57 and Mum's Jazz is 58. They were both retired by then so the cars were getting less use and the money was there.

I'm sure it's disappointing for the salesman, but I don't see any reason not to if you have the funds, think the car's worth more, and you're happy to stick with it. If I'd had the cash, I'd have taken up BCA's offer to buy the 2yo Tiguan we had on lease until last September.

[BMR]

troika said:

If the car is good and serves you well, pay it off and keep it rather than be on a perpetual wheel of debt.

I did this with a Fiesta ST as I had plans to get a mortgage, it was hard to turn down the extra £2.5k over the GMFV the dealer offered me. But at the same time new cars had also went up by £1k so not as good a deal as it seemed.

[Mr2Mike]

carparkno1 said:

So I guess the question is am I being smart or am I missing something obvious? It seems to me to make financial sense as the car will be worth more (indeed even WBAC are offering £1500 over the GFV), so am I a madman here? Does everyone else just roll into a new one? I fancy a Skoda Kodiaq down the line but at a time of our choosing and maybe even by lease (which means selling the Focus privately).

I strongly suspect that of the many people 'buying' cars on finance, only a minority would have the means to pay off a large balloon at the end of a lease, and of that minority most will opt for a new car anyway. However there's nothing wrong with going this way if numbers look good, that's why the option is there. The dealers attitude is no doubt due to the £££s he will be missing from a new finance deal.

[carparkno1]

Thing is, if Ford had something I wanted, I probably wouldn't have an issue going into another of their cars - but the Mondeo feels too old already and the CMax/Smax are utterly inspiring. I guess if we went with something like that we'd effectively be like everyone else and straight into another car from the same brand. Can see how easy it is!

Makes me wonder if leasing is the answer at some point - have seen some great deals with Simpsons Skoda etc. I always worry with dogs and babies about damaging the car but I suppose on PCP you have to get it fixed if you are handing back/trading in anyways - it's only if you pay the balloon you don't need to sort those bits out.

[Monkeylegend]

Even if you don't want it you have an opportunity to make a quick £1500 if you buy and sell to WBAC. Seems like a no brainer to me.

[ilikejam]

Monkeylegend said:

Even if you don't want it you have an opportunity to make a quick £1500 if you buy and sell to WBAC. Seems like a no brainer to me.

This is my thinking - although it assumes that you have the funds to pay the GFV and can manage without/to buy another car before the funds transfer back to you.

Wishing now that I had bought out our old Sportage. Took it on PCP in 2012 and chopped it in for a Honda CR-V in 2015 (2.5 years into the 3 year deal) as we had a load of equity to carry over. Inexplicably the GFV was £9000 but the market value was £14,000 - only now are comparable Sportages (year, engine, spec, extrapolated mileage) coming down to £9k. Hindsight's a wonderful thing...

[djc206]

carparkno1 said:

Thing is, if Ford had something I wanted, I probably wouldn't have an issue going into another of their cars - but the Mondeo feels too old already and the CMax/Smax are utterly inspiring. I guess if we went with something like that we'd effectively be like everyone else and straight into another car from the same brand. Can see how easy it is!

Makes me wonder if leasing is the answer at some point - have seen some great deals with Simpsons Skoda etc. I always worry with dogs and babies about damaging the car but I suppose on PCP you have to get it fixed if you are handing back/trading in anyways - it's only if you pay the balloon you don't need to sort those bits out.

You do not have to get the car fixed if trading in on a PCP, the condition of the car is determined on a scale and valued accordingly. This will affect any equity you have (potentially pushing it into negative and forcing your hand).

[carparkno1]

ilikejam said:

Monkeylegend said:

Even if you don't want it you have an opportunity to make a quick £1500 if you buy and sell to WBAC. Seems like a no brainer to me.

This is my thinking - although it assumes that you have the funds to pay the GFV and can manage without/to buy another car before the funds transfer back to you.

Wishing now that I had bought out our old Sportage. Took it on PCP in 2012 and chopped it in for a Honda CR-V in 2015 (2.5 years into the 3 year deal) as we had a load of equity to carry over. Inexplicably the GFV was £9000 but the market value was £14,000 - only now are comparable Sportages (year, engine, spec, extrapolated mileage) coming down to £9k. Hindsight's a wonderful thing...

I did think about flipping it to WBAC quickly if we had already agreed a deal for something elsewhere with a fairly nailed-on delivery date - be it lease or PCP. My car seems to retail around the 9500-10500 mark, so I assume a dealer would probably give about the same as WBAC anyways e.g. £9000?

I have looked at Sportages before - they have kept their value surprisingly well.

[PistonBroker]

carparkno1 said:

Makes me wonder if leasing is the answer at some point - have seen some great deals with Simpsons Skoda etc. I always worry with dogs and babies about damaging the car but I suppose on PCP you have to get it fixed if you are handing back/trading in anyways - it's only if you pay the balloon you don't need to sort those bits out.

We're on our second lease because I couldn't get PCP numbers to stack up when we were looking to upgrade back in 2015. PCP seemed to be more upfront, more monthly, and with the same likelihood that I'd just end up rolling into another deal.

I had to pay about £75 to VWFS for a couple of scratches on the exterior of the car but, otherwise, no issues handing back a car that had been used for 2 years and 25k miles by me, Mrs PB, the 2 little PBs and our eternal puppy Cocker/Lab cross who'd scratched the rear of our outright-owned CRV to pieces scrabbling up the sides of the boot to get a look out of the windows.

Admittedly, I invested in a cage for him at the beginning and spent £100 getting the Tiguan valeted to within an inch of its life just before the BCA inspection.

[anonymous-user]

troika said:

If the car is good and serves you well, pay it off and keep it rather than be on a perpetual wheel of debt.

This, I don't understand why people are so eager to change cars every three years. Surely a car with 30k on the clock is still effectively brand new, do they get in a brand new one and think "this is so much nicer to drive than the three year old one"

People paying to get out of a PCP early just so they can get a new car is madness, do they literally get so excited that they can't help themselves?

Or is it that paying £10k to buy the car at the end seems a lot more expensive than just continuing to pay £250 a month forever and getting a new one?

[carparkno1]

Joey Deacon said:

troika said:

If the car is good and serves you well, pay it off and keep it rather than be on a perpetual wheel of debt.

This, I don't understand why people are so eager to change cars every three years. Surely a car with 30k on the clock is still effectively brand new, do they get in a brand new one and think "this is so much nicer to drive than the three year old one"

People paying to get out of a PCP early just so they can get a new car is madness, do they literally get so excited that they can't help themselves?

Or is it that paying £10k to buy the car at the end seems a lot more expensive than just continuing to pay £250 a month forever and getting a new one?

I would hazard its part "shiny new things" and part "no cash in the bank to pay the balloon"

[carparkno1]

PistonBroker said:

carparkno1 said:

Makes me wonder if leasing is the answer at some point - have seen some great deals with Simpsons Skoda etc. I always worry with dogs and babies about damaging the car but I suppose on PCP you have to get it fixed if you are handing back/trading in anyways - it's only if you pay the balloon you don't need to sort those bits out.

We're on our second lease because I couldn't get PCP numbers to stack up when we were looking to upgrade back in 2015. PCP seemed to be more upfront, more monthly, and with the same likelihood that I'd just end up rolling into another deal.

I had to pay about £75 to VWFS for a couple of scratches on the exterior of the car but, otherwise, no issues handing back a car that had been used for 2 years and 25k miles by me, Mrs PB, the 2 little PBs and our eternal puppy Cocker/Lab cross who'd scratched the rear of our outright-owned CRV to pieces scrabbling up the sides of the boot to get a look out of the windows.

Admittedly, I invested in a cage for him at the beginning and spent £100 getting the Tiguan valeted to within an inch of its life just before the BCA inspection.

Thanks for this - we got a cage and a boot protector for our Focus for the lab and its been a lifesaver no doubt. A good valet and the car will look perfect. I do think we'll keep it until size is a real issue - if we weren't planning on more kids/dogs/Godknowswhatelse I'd keep the car for another decade as it's been faultless, but things will likely change over the next year so just want to have options on the table and leasing looks good. Seems I can get a new Volvo estate on the cheap which is mighty tempting if I can convince the other half.

[Zetec-S]

I'm in a similar position to the OP - 2/3 years into the PCP although more like 75% into the mileage allowance. Fully intended to buy outright at the end as I like the car and don't want perpetual payments...


... however... there are 2 things which might change my plans:

1) we've had some unexpected bills to pay over the last 6 months which mean we'll unlikely to be able to save the full balance in time. Might be "easier" to swap the car and stick with low monthlies...

and also...

2) the new Focus ST will be out by then, so, you know, temptation...

[Sheepshanks]

Joey Deacon said:

This, I don't understand why people are so eager to change cars every three years. Surely a car with 30k on the clock is still effectively brand new....

I think it must be a UK thing - a colleague based in the Netherlands told us he had a new car with only 160,00kms on it. When one of the UK guys scoffed and said "that's not new" he was quite hurt, and insisted "it's good as new". He'd paid at least 2x what the same car would have cost in the UK. He likes to change just before they hit 400,000 kms - there's still some value in them at that point.