Coming up to the end of my PCP in July… Long story short the final payment is around £2,700.00 but I’ve had a sudden breakdown which is gonna massively dent my ability to save up for this bill, which was the plan for the next six months.

Basically do I ask the finance company to extend the deal effectively and pay the remainder off over say 1 more year, do they even do this?

Or am I better off getting a 0% credit card and using that to pay off the balloon payment, do they treat this as a proper purchase or do they treat it as a cash payment and charge a fortune for it.

Weighing up options and tbh Google has been very conflicting.

I assume you want to keep the car? I’ll be giving my mini back to the dealer at the end of the 4 yrs but I only looked at it as a cheap rental as I got a great deal.
There’s great second hand prices at the moment, you could also consider we buy and the like and just get another pcp or rental.

I’d zero card it myself but….

I could but the car currently has an annoying auto gearbox fault that is not economical to fix (about half the value of the car) so nobody will touch it but I know how to avoid it causing problems when using it, so I’d have to not tell someone when selling it to them which is a touch cheeky even for me. At least if I own it and run it for another year or two it owes me nothing and I can scrap it then move onto a new car.

Worst thing you could do would be to give it back… Especially if it isn’t in a condition they would expect.

0% credit card would make the most sense. Bank loan at about 3% next most preferable. Refinancing would cost significantly more I would guess.

I’m going to suggest that a car that has £2700 left to pay on the final payment is going to be worth significantly more than this in good fettle, and albeit it has a fault with the gearbox, there will be independent specialists out there who will fix it for a lot less than a main dealer would charge. You’re also well within your rights to sell the car to a new owner, as long as you then use the money they have paid you for the car to pay off the finance immediately (wise to do this in front of the person buying the car off you).

The concept of a car “owing you nothing” is a fallacy sold to the gullible by people trying to push expensive finance deals onto you!

we’ve just refinanced a PCP, but only because our next PCP has a delivery date beyond the end of the deal, so we can keep using the car until the new one comes.

The finance co (Fiat) just fiddled the numbers around on their standard terms and interest rate to get as close as they could to our existing monthly payment so we’ve ended up on a 34 month deal, with zero balloon at the end, and we’ll be on that for a couple of months before the new one comes. Then we get a settlement which plugs into the deal on the new one with agreement with the dealer that the PX on the car when we hand back will be reduced by the same amount so the positive equity towards the new deal remains the same, unless of course she trashes it in the meantime.

IDK whether they’d do the same if there wasn’t the bait of a new deal at the end, and in any case you’d get a better deal on interest from the bank or on a 0% card anyway.

However – my Fiat paperwork specifically says that they don’t take CC’s for final payment, IDK why. But there are cash transfer deals out there as well, if that’s the route you’d take. Just not as many / as good and IDK if you can get a new 0% card and then do a cash transfer – all the ones I have seen recently are my existing cards giving me an offer to get cash on it. Do you have existing CC’s, one of them may have an offer already?

The concept of a car “owing you nothing” is a fallacy sold to the gullible by people trying to push expensive finance deals onto you!

And yet it’s entirely the opposite by appointment of basic maths.

Everyone has a break even point in their mind where the cost of the car – the sale.of the car / number of years is true cost of ownership it has nothing to do with “the finance” anything below the number in your mind- car owes you nothing.

I suspect your confusing this with inflated final value to make your new car look a better deal….. If op is scrapping it at the end then it’s not relevent
I’ve yet to have a car that costs more than a PCP deal on the equivalent car/milage Admittedly I’m only one break down away from it but then as this post demonstrates a PCP doesn’t shield you from that.

If you can live with the car and it suits you I’d zero % it and chip away at it.

While also looking for a specialist who can sort it outside maindealer net work.

If it’s got a fault just throw it back then….

I could but the car currently has an annoying auto gearbox fault that is not economical to fix (about half the value of the car)

was this a dealer PCP from new, not under warranty or whatever? Is there not an obligation for them to fix or replace?

the car currently has an annoying auto gearbox fault that is not economical to fix

It’s on PCP, can’t you get the dealer to fix it?

What caused the fault? Surely the benefit of PCP is you decide if you want to keep the car or not. If fault wasn’t caused by you then hand it back and get a new car. If it was caused by you, fix it as it’ll need done at some point.

Thanks guys, it’s a second hand car so it ran out of warranty a bit before the fault occured. As far as I know the finance company has no obligation to repair it. If I handed it back as it is, they’d charge me a bomb for the condition of the car not meeting the criteria for handing it back.

Lesson learned never PCP a second hand car ! It was my first car purchase having only ever had company cars before that so I didn’t know any better.

Both my PCP cars I have gone and found a CC that does 6 month money transfer (cash into my bank) at 0% interest. Sign up for that, transfer the balance required into my account, pay off the PCP, then in 6 months get a card with 2 years balance transfer at 0% (plus usually a small fee). Net result is giving myself a couple of years to pay off the ~8k balloon payment for a small cost in balance transfer charges.

ouch – possibly expensive lesson.

Second hand’s OK but I’d be making sure that the deals either cheap enough to self insure or ensuring that there’s a warranty to cover the PCP lifespan (and aftermarket warranties are I know another minefield)

That’s now got me thinking; to answer

“I’ve yet to have a car that costs more than a PCP deal on the equivalent car/milage”

it’s the wife’s car, she likes having a new car and if she’s happy then I’m happy. I possibly can get a better deal on a lease nowadays but when we got in (this’ll be her 6th!) there weren’t the lease deals around and we’ve always got good deals on the PX and future deposits. I seriously looked at lease this time but I couldn’t find a deal as good as the offer we have by about £25 a month, and finally this time with a 17yo daughter in another 3 year’s time we might seriously consider buying it out at the end!

But the other advantage is as long as we keep it serviced there’s no repair costs as it’s in warranty. But because of the delay we’re going to go 2-3 months past the 3 years, I need to make sure MOT’ed and fingers crossed it doesn’t go wrong in the meantime!!

Both my PCP cars I have gone and found a CC that does 6 month money transfer (cash into my bank) at 0% interest. Sign up for that, transfer the balance required into my account, pay off the PCP, then in 6 months get a card with 2 years balance transfer at 0% (plus usually a small fee). Net result is giving myself a couple of years to pay off the ~8k balloon payment for a small cost in balance transfer charges.

Usually about 3% isn’t it, so 2x 3% at 8k is about £450 accounting for what you’ll have paid off in the 6mo between transfers. Might not be that much cheaper than a loan.

Pro’s – you can pay it off more flexibly (some loans also)

Con’s – I know probably granny and eggs, but DON’T MISS A PAYMENT!!!!! or you’ll be moved to the standard rate and paying 20% CC interest rates. Obvious but people screw up all the time, it’s part of their model!

Both my PCP cars I have gone and found a CC that does 6 month money transfer (cash into my bank) at 0% interest. Sign up for that, transfer the balance required into my account, pay off the PCP, then in 6 months get a card with 2 years balance transfer at 0% (plus usually a small fee). Net result is giving myself a couple of years to pay off the ~8k balloon payment for a small cost in balance transfer charges.

Thanks this is a good explanation, so a money transfer card would be what it’s called.

Sell it to We Buy Any Car or a Car Supermarket with the gearbox fault. They’ll not check and it’s their problem.

My dad did that with a 3 series with a knackered turbo.

It’s all in the game yo

Sell it to We Buy Any Car or a Car Supermarket with the gearbox fault. They’ll not check and it’s their problem.

They’ll find out pretty quickly when they drive off and from what I understand you don’t get paid on the spot – I have read many stories where they have called an owner and asked them to come and collect their broken car from the other end of the country and withheld payment.

What is the gearbox fault? Is it immediately obvious?

What is the gearbox fault? Is it immediately obvious?

Intermittent fault where it loses drive pulling away from a standstill and sometimes the check engine light comes on. Occasionally it gets stuck in the even gears only until you turn it off and on again.

You might go 4 minutes before it happens or you might go 4 days, so it would be chancing it I think trying to dump it on WBAC.

If it’s got a fault, don’t hand it back at the end of the PCP, do a Voluntary Termination on the finance agreement if you just want shot of it. Then condition matters not. If you’re almost at the end of the PCP deal, then you’ll likely have made payments covering half the total.

Rule of 72 is it Ben?been a while!

Car finance: Voluntary termination of a PCP or HP

You can’t do that if the car is damaged, though.