which options makes more financial sense

[Brandonflowers123]

Which option will save me more money in the long run.

- My current car - Abarth 500 45k miles on a PCP. I only pay £1 a month as I have paid a lot of the money off. I have another year of 12 x£1 payments.

balloon payment of 4.3k if I want to keep the car.

- Alternative option - Part ex my Abarth. I will get around 5k to 6k dealership price.

I was palling to get a car for about 7k max budget. Maybe a skoda 1.6tdi cr. (please feel free to suggest other realisable alternatives.

But I will save 4.3k instantly? I don't plan to go onto another PCP or HP. Just want to buy a car that I can take to work until the day it dies.

[Edible Roadkill]

I don't understand the implied saving?

You can pay off the Abarth 4.3k and keep that and run it.

Or px the abarth on a 7k car and pay most of this once the pcp is cleared on the next one? Possibly a grand in the current one so cost to change 6k??

What's the overall thing you want to achieve, if it's cost reduction then the current car will cost less won't it? 4K instead of 6k!?

Edited by Edible Roadkill on Tuesday 16th October 10:29

[Brandonflowers123]

Edible Roadkill said:

I don't understand the implied saving?

You can pay off the Abarth 4.3k and keep that and run it.

Or px the abarth on a 7k car and pay most of this once the pcp is cleared on the next one? Possibly a grand in the current one so cost to change 6k??

What's the overall thing you want to achieve, if it's cost reduction then the current car will cost less won't it? 4K instead of 6k!?

Edited by Edible Roadkill on Tuesday 16th October 10:29

But wont trading in my abarth, pay for the new car. Lets say I pick a car which is 6k.
I part ex my abarth for 5k, pay 1k on top.

If I want to buy my abarth 1 year down the line it will cost 4.3k.

So a 3k saving?

[Flibble]

Brandonflowers123 said:

But wont trading in my abarth, pay for the new car. Lets say I pick a car which is 6k.
I part ex my abarth for 5k, pay 1k on top.

If I want to buy my abarth 1 year down the line it will cost 4.3k.

So a 3k saving?

You part ex your Abarth for £5k, pay off the £4.3k and have £700 to buy a car. That £4.3k doesn't go away, unless you hand back the car, in which case you owe nothing, but have no car.

[rsbmw]

Maths fail.

If you PX your Abarth, you still need to pay off the £4.3k, plus any money on top for the new car.

I don't get why you wouldn't just keep paying the £1 for another year and evaluate your requirements closer to the time.

[Edible Roadkill]

Unless I'm reading this completely inside out: you don't yet own the abarth until the 4300 quid is paid, so if you trade it in you'll get the px value minus the amount still owed.....maybe a grand or their abouts.

[r-kid]

Brandonflowers123 said:

But wont trading in my abarth, pay for the new car. Lets say I pick a car which is 6k.
I part ex my abarth for 5k, pay 1k on top.

If I want to buy my abarth 1 year down the line it will cost 4.3k.

So a 3k saving?

where do you think that £4.3k is going if you part ex it? That still needs to be paid off to your existing finance company.

So your trade of the abarth will be account for that, £5k trade in you'll only see £700 of it.

[Edible Roadkill]

Glad it's not just me, it would be marvellous if it worked out the OP's implied way. I'd be in a new car every month

[Flibble]

Edible Roadkill said:

Glad it's not just me, it would be marvellous if it worked out the OP's implied way. I'd be in a new car every month

Yeah. Buy an £80k car, with a £30k balloon, part ex it after a month, £40k profit!

[Brandonflowers123]

Edible Roadkill said:

Unless I'm reading this completely inside out: you don't yet own the abarth until the 4300 quid is paid, so if you trade it in you'll get the px value minus the amount still owed.....maybe a grand or their abouts.

Okay, Im unsure about the PCP aspect.

I thought you can walk away at the end of the agreement, and not pay it?

[Flibble]

Brandonflowers123 said:

Edible Roadkill said:

Unless I'm reading this completely inside out: you don't yet own the abarth until the 4300 quid is paid, so if you trade it in you'll get the px value minus the amount still owed.....maybe a grand or their abouts.

Okay, Im unsure about the PCP aspect.

I thought you can walk away at the end of the agreement, and not pay it?

You can, but you have to give them the car. You can't sell the car and walk away, one or the other.

[GT119]

r-kid said:

Brandonflowers123 said:

But wont trading in my abarth, pay for the new car. Lets say I pick a car which is 6k.
I part ex my abarth for 5k, pay 1k on top.

If I want to buy my abarth 1 year down the line it will cost 4.3k.

So a 3k saving?

where do you think that £4.3k is going if you part ex it? That still needs to be paid off to your existing finance company.

So your trade of the abarth will be account for that, £5k trade in you'll only see £700 of it.

No, no, no, this is the UK, we never pay back anything we have borrowed, crack on OP.

[Edible Roadkill]

Brandonflowers123 said:

Edible Roadkill said:

Unless I'm reading this completely inside out: you don't yet own the abarth until the 4300 quid is paid, so if you trade it in you'll get the px value minus the amount still owed.....maybe a grand or their abouts.

Okay, Im unsure about the PCP aspect.

I thought you can walk away at the end of the agreement, and not pay it?

You can, and walk away with nothing.

But the amount owed remains if you px the car.

I'd say you would be best remaining in the abarth for the next 12 months if it's only a pound a month. Pretty much free motoring.

[Brandonflowers123]

Edible Roadkill said:

You can, and walk away with nothing.

But the amount owed remains if you px the car.

I'd say you would be best remaining in the abarth for the next 12 months if it's only a pound a month. Pretty much free motoring.

Thanks,

Would it makes sense to buy the car?

4.3k for a car I love and I know its been well looked after?

Then drive it until it dies?

[rsbmw]

It makes sense to pay almost nothing for another year and see where you are at that point (and what the car is worth vs final payment).

[Edible Roadkill]

Brandonflowers123 said:

Edible Roadkill said:

You can, and walk away with nothing.

But the amount owed remains if you px the car.

I'd say you would be best remaining in the abarth for the next 12 months if it's only a pound a month. Pretty much free motoring.

Thanks,

Would it makes sense to buy the car?

4.3k for a car I love and I know its been well looked after?

Then drive it until it dies?

I think that makes sense, so long as you have it maintained, serviced etc

With your monthlies so low (£1...really is that right??) if I were you I'd be saving a couple hundred a month over the next 12 months that will soften the blow of the balance due, then take a bank loan for the remainder.

Geeez I feel like I'm talking cars/finance with my sister here haha

[Brandonflowers123]

Edible Roadkill said:

I think that makes sense, so long as you have it maintained, serviced etc

With your monthlies so low (£1...really is that right??) if I were you I'd be saving a couple hundred a month over the next 12 months that will soften the blow of the balance due, then take a bank loan for the remainder.

Geeez I feel like I'm talking cars/finance with my sister here haha

Thanks for all this advice!

Yes £1, I lived at home with mum and dad for a year once I got my first job, so I was able to save a fair bit of money to reduce my monthly payments.

Okay, I have a little saved up, and will save more.

I haven't had to spend a penny on the car. I have just looked at my documents, and found that I still have warranty until 2021. So it makes sense to buy the car?

[anonymous-user]

This reminds me of my Auntie who decades ago bought an Austin Allegro on finance and subsequently sold it. She just assumed that was the end of the matter and stopped the finance payments.

After the finance company wrote to her threatening her with the bailiffs she explained the situation to my dad and how unjust it was, trying to justify this with "But I don't own the car anymore". She just could not understand why she was still liable for the money, in her mind she no longer owned the car so why should she have to pay for it?

Anyway, back the OP as others have said paying the £4300 will be the cheapest.

[Edible Roadkill]

That will be the best option then I think.

Running a car will always cost money whatever way you choose to do it so while paying a pound a month is great it's not sustainable. To keep on the ball you should pro actively look ahead and save towards the next car, balloon payment etc. Especially if you want off the pcp cycle.

[Brandonflowers123]

Edible Roadkill said:

That will be the best option then I think.

Running a car will always cost money whatever way you choose to do it so while paying a pound a month is great it's not sustainable. To keep on the ball you should pro actively look ahead and save towards the next car, balloon payment etc. Especially if you want off the pcp cycle.

Yes my main aim is to get of the PCP Cycle which many people are stuck on.

In truth I have seen Abarth's with over 100k miles on the clock go for 5.5k.

Any modern car should at least get to 130k. So it will be worth buying the car