Dumb question about balloon payments

[anonymous-user]

Can this be negotiated at the start?
I am new to car finance so want to do my due diligence.

Say I find a 19 plate BMW for £36,000.
I put down a deposit of £10,000.
My monthly payment is assumed as £350 per month over 42 months.

Could I ask the dealer for a bigger balloon payment if all I want to do is hand the car back at the end of the term?

A friend said the balloon is usually the guaranteed value?

Reading up a lot but confused myself.

Thanks

[Butter Face]

Generally they are set by the finance company, the dealer doesn’t have much say in it.

You can go down but normally not up.

[LocoBlade]

Nobody will give you a bigger balloon than what they think the car will be worth after the end of the finance period precisely because they don't want you to hand back a car that's then cost them more in depreciation than the money you've paid them!

[Sheepshanks]

Super_G said:

Could I ask the dealer for a bigger balloon payment if all I want to do is hand the car back at the end of the term?

A friend said the balloon is usually the guaranteed value?

With PCP it's not really a balloon payment. It's generally called Optional Final Payment now, and that phrase has generally replaced Guaranteed Final Value.

Balloon payments are used with lease purchase - but you have to pay the balloon at the end of the deal. Could be the car will cover it, but f it doesn't you have to pay the shortfall. I don't know if that type of finance is generally available to the public.

[anonymous-user]

Thanks everyone. It makes sense. I am happy with the numbers anyway so will go for it.

[essayer]

Sheepshanks said:

With PCP it's not really a balloon payment. It's generally called Optional Final Payment now, and that phrase has generally replaced Guaranteed Final Value.

Balloon payments are used with lease purchase - but you have to pay the balloon at the end of the deal. Could be the car will cover it, but f it doesn't you have to pay the shortfall. I don't know if that type of finance is generally available to the public.

BMW did offer it, it was called Balanced Payments. HP with a final payment, which could have been more than the car was worth!

[Sheepshanks]

essayer said:

BMW did offer it, it was called Balanced Payments. HP with a final payment, which could have been more than the car was worth!

That's a business thing - the interst rate even varies through the term.

You can get simple HP with a balloon - but you have to pay the balloon. The OP wants to hand the car back.


ETA, from Stratsone: https://www.stratstone.com/new-cars/finance-explai... - and a handy explanation of all the options at the bottom of the page.