End Of PCP-how best to keep car?
Discussion
After almost 3 years of fabulous motoring in our Civic Type-R (where did that time go?) the 3 year finance deal (a PCP) is coming to the end.
Long story short, I simply can't find another new car that I'd like as much so I really want to keep it. Being a PH Director of course the best option is to pop the remaining balance (circa £16700) on the debit card and snigger at all those who have to lower themselves to renting a car they can't afford but living somewhat in the real world this has it's drawbacks;
Second child is due this spring so that little savings pot is taken care of and we are looking to expand one business which will necessitate buying more land. In other words I'd like to invoke that other old PH excuse for PCP in keeping the cashflow for something more important than driving a hot hatch.
Currently the monthlies are circa £210 PCM however if we put the car on a new PCP with Honda the monthlies jump up to £270 with a balloon of £8500 or so in four years time. Not exactly fantastic rates I'm sure you'll imagine.
For the avoidance of doubt, extending the manufacturers warranty is a pittance at £360 PA, the car has a 5 year service plan on it and in all honesty, I imagine keeping the car until it is over 5 years old, certainly 5 and a half years or so.
So with the option of throwing in as little capital as possible what are the cheapest options, both monthly and totally? A 3% bank loan and a bit of cash in? Some other form of car finance?
Long story short, I simply can't find another new car that I'd like as much so I really want to keep it. Being a PH Director of course the best option is to pop the remaining balance (circa £16700) on the debit card and snigger at all those who have to lower themselves to renting a car they can't afford but living somewhat in the real world this has it's drawbacks;
Second child is due this spring so that little savings pot is taken care of and we are looking to expand one business which will necessitate buying more land. In other words I'd like to invoke that other old PH excuse for PCP in keeping the cashflow for something more important than driving a hot hatch.
Currently the monthlies are circa £210 PCM however if we put the car on a new PCP with Honda the monthlies jump up to £270 with a balloon of £8500 or so in four years time. Not exactly fantastic rates I'm sure you'll imagine.
For the avoidance of doubt, extending the manufacturers warranty is a pittance at £360 PA, the car has a 5 year service plan on it and in all honesty, I imagine keeping the car until it is over 5 years old, certainly 5 and a half years or so.
So with the option of throwing in as little capital as possible what are the cheapest options, both monthly and totally? A 3% bank loan and a bit of cash in? Some other form of car finance?
2.8% has got to be about the cheapest hasn't it, that's ridiculously low! Are these rates fixed or anything, or if interest rates spiral do they do the same?
I (probably somewhat naively) did wonder if there was an option to PCP that may even lower the monthlies I'm paying now but I expect due to the car's age there are simply no decent deals to be had? I imagine the figures look thus;
Car Honda Civic Type-R GT, FSH 20k miles Retail Value circa £22k
Trade in Value circa £18k (might be being generous there)
Balloon Payment Due May '19 £16700
Let's guess that in two years the trade in value is £14k? If I'm paying off the loan at £270 PCM and chucking a couple of grand at it I'll have paid off some £8k? So if I look to change in 2 and a bit years there'll be a good chance of coming out with more capital value considering the increased monthly payments and extra deposit.
It's all very "crystal ball" isn't it?
I (probably somewhat naively) did wonder if there was an option to PCP that may even lower the monthlies I'm paying now but I expect due to the car's age there are simply no decent deals to be had? I imagine the figures look thus;
Car Honda Civic Type-R GT, FSH 20k miles Retail Value circa £22k
Trade in Value circa £18k (might be being generous there)
Balloon Payment Due May '19 £16700
Let's guess that in two years the trade in value is £14k? If I'm paying off the loan at £270 PCM and chucking a couple of grand at it I'll have paid off some £8k? So if I look to change in 2 and a bit years there'll be a good chance of coming out with more capital value considering the increased monthly payments and extra deposit.
It's all very "crystal ball" isn't it?
Think the Honda rate was somewhere around 7+% APR although the sales man there is a mate, he said I’d be better off finding myself via a personal bank loan which is probing true.
His thinking was used car PCPs are a bit of a mugs game due to the high cost and once it isn’t a new car sale you’re better off looking outside the franchised dealer for a better offer.
His thinking was used car PCPs are a bit of a mugs game due to the high cost and once it isn’t a new car sale you’re better off looking outside the franchised dealer for a better offer.
That seems to be the thinking, borrow long on low interest.
For my personal circumstances the extended manufacturers warranty is a no brainer for £360-they even let you pay monthly on 0%. I put the 5 year service plan on the car so in reality I'm probably only looking at consumables for the next two years.
If the loan payments are circa £270 pcm I'd be looking at getting rid of £6.5k plus whatever I throw into the deal-say £2k-ish?
So I'd be looking at owing say £8-9k on a 5 year old Type-R at the end of year 5 and how much will it be worth? More than that I imagine.
All of that is pretty irrelevant however when I know I want to keep the car for at least that two years and enjoy it as I have been-something I've never done before!
Someone asked about the deposit and I think it was around £11k as we part exchanged an MX5 we owned outright.
For my personal circumstances the extended manufacturers warranty is a no brainer for £360-they even let you pay monthly on 0%. I put the 5 year service plan on the car so in reality I'm probably only looking at consumables for the next two years.
If the loan payments are circa £270 pcm I'd be looking at getting rid of £6.5k plus whatever I throw into the deal-say £2k-ish?
So I'd be looking at owing say £8-9k on a 5 year old Type-R at the end of year 5 and how much will it be worth? More than that I imagine.
All of that is pretty irrelevant however when I know I want to keep the car for at least that two years and enjoy it as I have been-something I've never done before!
Someone asked about the deposit and I think it was around £11k as we part exchanged an MX5 we owned outright.
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