[Closed] Paying the balloon payment and actually buying the car

Exploding is fine as you're still covered for another 3 years with Kia 🙂

Keep the car IMO

Keep the car for another 4-5 years, then you will have enough forward deposit.

We've done what you are suggesting twice. Worked well for us.

You're servicing costs won't be much different to now and like weeksy says your major items are still covered under warranty.

PCP finance is only stupid if you don't buy the car at the end of it.

The first 3 years is where a car suffers the greatest deprecation.

Buy it and run it for another 5 years then buy a 3 - 5 year old car s/h to replace it.

given the 7 yr warranty with Kia, and the fact that you know and like the car I'd say keep it.

We have an 11 Kia Soul (wife's car), which we bought on 3 yrs interest free Kia finance as an ex demo. It was paid off end December there and still only has 24K miles on it, so hoping for hassle free cheap motoring with it for next few yrs

Why does your wife want a bigger car? Most cars are bigger externally but internally they can have shocking use of real volume/space.

People are convinced they have new/better but really it isn't.

If its due to bikes- why not fit a towbar and invest in a carrier? (better than a roof/faff etc).

I'm shocked, a car thread and every post is sensible, down-to-earth advice!

Keep it.

Keep it, as much as it is nice to get a new car, its only new for the first day but the payments keep going.

I'm shocked, a car thread and every post is sensible, down-to-earth advice!

get rid, and buy a fast estate for 'making progess'. any less than 300 BHP and I think it will feel underpowered and unsafe.

Your wife wants a new, bigger car. That is the correct answer.

keep it but make sure you have a huge gap when pulling into traffic - its just not fast enough to keep with the [s]traffic[/s] (knobs making progress)

Do exactly what hora says. Removable tow ball racks are awesome and modern cars just get bigger on the outside to accomodate larger crash protection zones, at the expense of interior space for a given body size.

The Kia, while probably dull and bland (I'm assuming they fit the stereotype) will just run on forever, or until corrosion eventually kills it some time past 2020. By which point you'll have laughed all the way to the bank and back again.

What was the reasoning behind getting the contract in the first place?
If it was to run a new car for peace of mind then trading in for a similar 'new' car keeps that ball rolling.

If you pay the final payment you end up paying top whack for that car, was that part of the original plan?

PCP finance is only stupid if you don't buy the car at the end of it.

Equally unstupid for me is trading in having looked after the car and done less than the agreed mileage, getting more for it than the final payment, using that as deposit on a new one, and keeping my wife happily in a new car every 3 years.

Because when she's happy, we're all happy 😉

OK, we're 'resigned to' the fact that we will probably never 'own' a car for her again, equally as they're always under warranty we won't get any unexpected repair bills either.

Hora, just as you assume she wanted a bigger car for reasons unknown (she wanted a mum wagon basically, and a newer car just for the sake of having a newer car) , and pointing out that they are only really bigger on the outside for the most part seems to have got through.

Theocb there was no great plan when the car was bought and she did it on her own which resulted in no haggling etc. It was an 8 month old factory demo and as such fairly good value in that respect.

In two years time our financial situation will have changed for the better and we will have a better idea where we are in terms of another kid so I think decisions on size and type of car are best put off till then when we aren't just gu swing about what we need (notwithstanding the fact that the ceed is plenty big enough for two children of any age).

Thanks for the advice so far folks.

To enable you keeping the car/i.e. keeping the missus happy you need to give her a diversion/reward- talk about a nice holiday instead.

I have similar situation but I saved the final payment throughout the period of the initial finance. I am going to have a nice smile on my face paying off the balance.

FYI I was astonished at the deal they offered me to trade in. Considering its a £10k car new they offered me £5200 trade in which is probably about £800 off what I would get selling it privately quickly.

BUT the big thing that took me back was the deposit contribution they offered to renew the finance on a new one. £2500.

Basically meant I was getting the new car for way less than they sell for (Even discounted). Oh I still intend to pay off the car though. Just turned 3yrs old. 15,000mls and will do the kids in 4-5yrs time as a 1st car. By which time I will buy the wife something else

Point of the post is to ensure you are not just being offered the standard costs for a bigger car. If you are renewing a PCP type deal there is usually a much bigger incentive for it.

Equally unstupid for me is trading in having looked after the car and done less than the agreed mileage, getting more for it than the final payment, using that as deposit on a new one, and keeping my wife happily in a new car every 3 years.

It may make the wife happy but it's a massive waste of money.

Unless you're really unlucky, a modern car will run without any major issues for 5 - 7 years. The OP has a Kia Ceed, which by all accounts is a pretty straight forward and robust car, just about bomb proof and it's still under warranty. I would keep it and run it into the ground.

No I'm afraid the deposit contribution I have been offered is 1 grand.

And again, hora is right, for the hard work she does my wife deserves to be driving around in a proper Bentleycedes SuperGTcontinental Sportback and she does deserve that new car feeling, but maybe in two years time.

BUT the big thing that took me back was the deposit contribution they offered to renew the finance on a new one. £2500.

Why do you think they do that?

From the goodness of their hearts? Or because they make shed loads of money from selling a new car and a finance package? Also, they can probably quite easily shift a well maintained 3 year old mainstream car.

New cars are an indulgence. They make no financial sense whatsoever. I bought a brand new car in 1998, when I had far too much money to burn. Never again.

How much is a 4yr old Kia Ceed worth these days in similar spec to yours?

If its less than £4500 you may want to consider comparing the deal you would get for going in again and starting afresh. Unless they are giving you MORE than the £4500 PLUS the £1000, where is the incentive?

I have just checked out Evans Halshaw site and they are giving £1500 deposit contribution on Kia Ceed 1.4 Hatch. Just make sure you are getting the full whack mate

In your position I would get the loan and pay the balloon. The depreciation has now substantially slowed so keep it another 2 or so years and you should have a car worth roughly 2 - 2.5k. Decent dipper for another that.

However you could get a personal contract hire where more of the depreciation is taken care of by the vast (usually much bigger than retail) manufacturer discount available and therefore get a much better car for your money.

gobuchul. Trust me I know exactly why they did it and with nearly 20yrs of dealing with these type of deals in my job I would hope I did.

New cars are an indulgence. They make no financial sense whatsoever.

Yep. Sometimes my wife makes no sense either, but I love her dearly and if having a new car every 3 years keeps her happy, who am i to argue.

Buying new bikes makes no sense either..........

For me it just comes down to the choice of 'new' car or old car..
A new car for some is 'worth' quite a bit extra (worth is not always financial.)
But financially an older car is always going to be a better bet.

I have always bought old cars and my current car has travelled 30000 miles without any issue and is still worth the same as what I bought it for. (This makes me happy!)

A friend has had a 'new' monthly contract for the last 8 years and seems to manage to swap without any big deposits before the term is up.. they seem very happy with the hassle free motoring for small weekly payments!

I have similar situation but I saved the final payment throughout the period of the initial finance. I am going to have a nice smile on my face paying off the balance.

ocb you misread me. I will have a big smile on my face as I will own the car entirely. No other reason.

I actually stated the annual mileage on the car as 25,000 per annum to intentionally bring the payments UP and the final payment down. I intend to own the car forever so it is £4000 for now but in reality it has been £10000 plus 0.2% interest (Yep that's how much I paid) for as long as I own the car.

Gotcha 😉 thought I was missing a good deal (I love a bargain.)

For you I am assuming the good deal was in the 'worth' of a new car plus the very good interest free deal (more or less.)

I can see how that balances out against the 'financial only' reasoning of others.

Whens the last time it had a proper good interior/exterior valet? I had a £15/come to your work jobbie done. It looked like a new car inside. I was gobsmacked.

Within 2 weeks it looked like I'd lost it in a flood/flood damage again though 😀

I worked this out a while back when looking to change.
It was (over total lifespan) considerably cheaper to buy on contract, change it every two years than it was to buy it either outright or on finance.
By the time the depreciation kicks in, running costs, interest, etc - not owning it was cheaper!
With a nominal balloon option to keep it if I wanted to it was a no-brainer.
Unless I was planning to run it into the ground for 10yrs+ it made no financial sense.

Littlest Hobo. Apologies I used deposit contribution wrongly there. The balloon/gft is 4500.they have valued it as trade in of 5500 thus giving me a grand to use as deposit. This is roughly in line with the parkers blue book valuation.

They will either sell it at auction or give it a good clean and refurbish one alloy wheel and sell it themselves . If I was to get rid then I imagine someone will be buying it for 6500 eventually, which again is the parkers blue book price for a car of it's age and spec from a dealer.

Again thanks for all your comments guys.

£4500 final payment
£5500 value for trade in
£1000 equity

So what is the deposit contribution they are offering you? Is it more than Joe Bloggs gets for just walking in off the street? They usually give more because you are a loyal 'captive' customer. It was £1500 on that Evans Halshaw one I looked at

Without wanting to confuse you, one of the sneaky things dealers do is not mentioning the deposit contribution. They get you to focus on the value they are giving on your car and you think "oh, a grand towards the next one". But then they write the deposit contribution out of your car and suddenly they have given you the equivelant of £4000 for your car (Based on the example I found of £1500 dep contribution).

Remember you don't have to take it back to the supplying dealer. If another dealer wants your custom, they might offer you more. When we changed ours, we got an initial offer from the supplying dealer, shopped around and got a better offer from another, which the supplying dealer then matched so we stuck with them for convenience*.

* from what i understood at the time, we'd have had to pay the balloon payment and own the car, then use that as deposit with the 2nd dealer at their higher offer rate for the new contract - and given we were only really using them for a counter offer i didn't pay a lot of attention as to whether that really meant paying over cash or if it could be done by offsetting transactions.

If the final payment is £4500, and its worth substantially less than this (which it sounds like it is if its only worth £1000 as a trade in), then just hand it back, and buy another identical one on the open market for its true market value.

You wouldnt pay £4500 for a car thats worth £1k.

Edit - just read the rest of the thread, so the misunderstanding about it being worth £1k. You could see what a used equivalent sells for on the open market and if substantially less than you would need to pay, just hand yours back and buy on the open market. Although you will be buying a car you dont know the history of, so it may be worth paying a premium for that alone.

I don't think you have to settle the finance just because you aren't taking it back to the supplying dealer. As long as its a Kia dealer I would expect them to be able to deal with it as though they were the supplying dealer and settle it off themselves as part of the deal. I have done this hundreds of times for trade ins which have outstanding finance on them both within the same brand and those outside of our brand

You have that incorrect julians. Its worth £5500 and the settlement is £4500. Equity is therefore £1000

Keep it, but you'll obviously need a remap to maintain progress

I'd keep the car, Ce'eds are pretty decent.

The 'funny' thing is followers of TopGear will tell you its shit.

The ironic thing is May owns a Panda, Clarkson owned for a bog-standard MKI Focus for years. Clarkson even said the Focus was great as it was soo anonymous. you could leave it for days in a train station carpark and no one would bother with it. Both of these have far less than the magic 300bhp+ 😀

I see nothing wrong with keeping the Ce'ed. For 11months I ran a Xsara Picasso as a stop-gap. I actually miss it and that was a terrible car compared to the Ce'ed! 🙁

It may make the wife happy but it's a massive waste of money.

Unless you're really unlucky, a modern car will run without any major issues for 5 - 7 years. The OP has a Kia Ceed, which by all accounts is a pretty straight forward and robust car, just about bomb proof and it's still under warranty. I would keep it and run it into the ground.

By your own calculations the OP has 1-3 years before it has any 'major issues'. By the time the 'major issues' come about the car will be worth less so when it goes wrong and the wife says she needs a new one because the old one is unreliable the OP will have more money to find.

If he trades in he can continue paying an amount he's comfortable with and hopefully not have to worry about it costing anything extra.

Modern cars cost loads to fix so even running one in to the ground will cost you and probably at a time you can least afford it.

That's the point of new cars. Oh, and they're new, which is a good thing.

chestrockwell - those expensive repairs that may or may not happen are nothing compared to the guaranteed depreciation you will get in the first few years of owning a new car.

By all means have one if that's what you want but it's the best thing to do financially.

"By your own calculations the OP has 1-3 years before it has any 'major issues'. By the time the 'major issues' come about the car will be worth less so when it goes wrong and the wife says she needs a new one because the old one is unreliable the OP will have more money to find."

mean while you are counting that these issues WILL happen.

i run cars between 9-15 years old and yes they do happen occasionally.... but by the time the car is a bit older the costs seem to have come down from the headline problem costs back in 19oatcake when they were built.

Ive done 1 clutch in 6 cars in my life only other big bill was a vw where the engine melted.

[quote=julians ]Edit - just read the rest of the thread, so the misunderstanding about it being worth £1k. You could see what a used equivalent sells for on the open market and if substantially less than you would need to pay, just hand yours back and buy on the open market.

He also covered that - £4.5k is £1k below the trade book price, so the last thing he should do is just hand the car back.

[quote=chestrockwell ]By your own calculations the OP has 1-3 years before it has any 'major issues'. By the time the 'major issues' come about the car will be worth less so when it goes wrong and the wife says she needs a new one because the old one is unreliable the OP will have more money to find.
...

My current car I bought age 4.5 years with 120k on the clock. Major issues? Yep, have had to change the clutch and DMF, may well have some other expensive things to fix. The total cost of all the likely major issues is less than the first year's depreciation.

(in this particular case I'm actually into bangernomics territory on a car which is still only 7 years old - was £3k or so cheaper than similar age cars with 50k less miles {~£14k less than new}, which is more than enough to cover the cost of any major jobs - jobs which the lower mileage ones might see soon anyway)

Sure if you want to regularly have new cars PCP is a good option, but don't kid yourself that it is cheaper to own a car that way than buying s/h.

Edit: having checked the actual depreciation on a new one, the total amount I've paid for 2.5 years ownership, including purchase price, repairs, tax, insurance is less than the first year's depreciation!

of course theres a hassle factor involved too aracer - how ever i dont believe a new car negates that - infact im sure the bathtub statistics model would suggest your more likely to have issues with a new car than a middle age car - curving towards more issues again towards end of life.

I actually put value on the fact that only me and my wife have driven the car we have. I put value on the fact that I have had it serviced regular, never bumped and basically I know its history.

I am planning to keep ours forever so the PCP at an astonishingly low 0.2% made sense.

Not everyone wants a second hand car with the issues it can bring. Bangernomics make no sense when your wife is stranded at the side of a road with 2 screaming kids demanding that you come and sort the car out.

Anyhow, interested to know what deposit contribution the guy was offered still

TheLittlestHobo - Member
never bumped

You would be surprised at how many new cars have already had paint repairs before they hit the show room.

Not everyone wants a second hand car with the issues it can bring. Bangernomics make no sense when your wife is stranded at the side of a road with 2 screaming kids demanding that you come and sort the car out.

That's what breakdown cover is for, AA, RAC, The Other One........

thelittlesthobo - did i miss where the OPs car was a second hand banger about to fail at the side of the road....

Modern cars cost loads to fix so even running one in to the ground will cost you and probably at a time you can least afford it.

That's the point of new cars.

Yes but with an old car, it might go wrong and cost you lots of money. But a new car will DEFINTEILY cost you loads of money.

Best thing is to buy a 5 year old car and put the extra money in the bank. IF you need to fix it, you're covered many times over. If you don't - bonus. Buy a new bike or three with the money you've saved.

then theres the other side of the coin - theres the folk i know about here that every 3 years religeously they must have a new car so they dont have to MOT it .....

hell one guy i had a conversation with was going to trade in his year old clio just so he didnt have to service it.....

mentalists - how ever they create pools of cars for me to chose from , the more new cars bought now the more chance of bangers being cheaper when i need another.

[quote=TheLittlestHobo ]Bangernomics make no sense when your wife is stranded at the side of a road with 2 screaming kids demanding that you come and sort the car out.

For that you have breakdown cover 😉 Though actually I haven't used mine for a broken down car for over 20 years (a couple of times following crashes, once when I was injured and couldn't drive). That's despite running my last car until it was 14 years old. Though actually my current cheap car isn't bangernomics at all, it's just the cost is tending that way, and you don't need to do bangernomics to get the benefit of cheaper s/h cars.

As suggested by trail rat up there, the chance of needing to use breakdown cover with a new car is actually higher than that.

I actually put value on the fact that only me and my wife have driven the car we have. I put value on the fact that I have had it serviced regular, never bumped and basically I know its history.

I am planning to keep ours forever so the PCP at an astonishingly low 0.2% made sense.

Not everyone wants a second hand car with the issues it can bring. Bangernomics make no sense when your wife is stranded at the side of a road with 2 screaming kids demanding that you come and sort the car out.

How dare you say such a thing, the STW brains trust will not allow it.

You're an idiot if you buy anything newer then 10 years old and the more miles it has on it, the better. Don't even bother talking to me unless it's done at least 120k as you will clearly be stupid.

Having your wife stranded at the side of the road will be her own fault for not having a hardtail with 26" wheels.

[img] [/img]

the littlesthobos idea actually makes significantly more sense than blindly changing cars every 3 years.

TheLittlestHobo » Bangernomics make no sense when your wife is stranded at the side of a road with 2 screaming kids demanding that you come and sort the car out.

My dad's new Jag left him stranded at the side of the road.

I did a few sums on new and used (in France where depreciation is slower) and concluded that if I keep a car a long time then new makes a lot of sense. A lot of failures are driver related and cars get moved on by people who consider them consumables to be used and abused. I've never worn a clutch out in my life, I don't thrash a cold engine, I leave the engine running for a few seconds at motorway service areas to let the turbo cool down and avoid carbonising the oil, I don't drive over kerbs and bend things, I wash the salt off at the end of the ski season, servicing is done when it should be, I know exactly how many kms it's done.

If I do buy second hand then I want something with 60 000km per year on it. That way I know it's never cooled down and if it's been clocked then it's not by much.

[img] [/img]

i bring you this.

also edukator - i agree on everything you said esp turbo cooling - but dont let the folk on here see that , turbos are fine working right up till the point when you park up and turn the key off ASAP - its the law around here , dont try and fight it..........

and one wonders why this place seems to account for more turbo failures i've ever heard about.

No toys out of the pram here as I really couldn't care less what the STW masses car buying habits are. I just amuses me that the answer to any car related question seems to be a 7 year + 3 Series or T4/5 with 150k on the clock. Extra smarm points are awarded for refering to the car in question by it's series number.

I'm glad Edukator turned up and reminded us how awesome he is.

i agree on everything you said esp turbo cooling

Well it's fine in theory but I cannot for the life of me imagine a service station where you'd brake hard from 70mph then suddenly kill the engine. They all involve quite a bit of gentle trundling. Likewise almost any parking situation, unless you go to visit someone who lives alongside a main road.. or perhaps stopping in a layby.

How about arriving in a ski resort, molgrips? People drive up the col, into the car park and cut the engine. Their cars smells hot, the fans are running flat out and the exhaust can be heard clicking as it cools.

So awesome I don't fell the need to drive around in a posy Alfa or Beemer.

[quote=Edukator ]If I do buy second hand then I want something with 60 000km per year on it. That way I know it's never cooled down and if it's been clocked then it's not by much.

Only 50000km a year for mine, which isn't German and has no prestige at all. I'm not doubting your sums, but not so convinced here where there is cliff fall depreciation for the first couple of years - that covers a lot of replacing bits which have been thrashed.

[quote=chestrockwell ]No toys out of the pram here as I really couldn't care less what the STW masses car buying habits are. I just amuses me that the answer to any car related question seems to be a 7 year + 3 Series or T4/5 with 150k on the clock. Extra smarm points are awarded for refering to the car in question by it's series number.

Wrong pic - here you go:

[img] [/img]