.. probably because I’m an idiot.  I never intended to buy the car at the end of the contract. I had an inkling it might be worth a bit more than the balloon as it was 10k under the 50k miles I’d specified. But finding the cash to buy it and then the ball-ache of selling it did not appeal.

Then I found if you ring any franchise (in my case all the BMW ones) and ask to speak to the group car buyer, they’ll likely make you an offer which pays off the balloon and returns a bit of cash.

Apparently there’s a shortage of 2nd hand cars, so I had two dealers really interested even tho I hadn’t intended to sell it until Nov when contract ended. One made me an offer I couldn’t refuse, sent a bloke to look at it, honoured the price, got a settlement from BMW finance, paid that off, paid us a healthy chunk of cash on top of that and then collected it.

Total effort on my side, two phone calls, three emails, an hour to give it a quick clean.  The icing on the cake was the dealer I bought it from insisting it wasn’t even worth the balloon payment. They obviously were flagged when the settlement figure was requested, and rang me to ask if they could in fact make me an offer.

I enjoyed that conversation 😉 Anyway I’m sure this is common knowledge, but thought I’d share if not.

Mmmm – I might do some thinking around this now.

We got ride of my wifes car just before lockdown. Sold it to Evans Halshaw and they paid £800 more than the balloon payment. Pretty happy with that as it was only a cheap car that cost £7k in the first place. Def get a quote from somewhere else and they all settle the finance for you.

I was surprised how much interest there was. It’s obviously a common thing as the process is very slick and well organised. The buyer told me not to bother over-cleaning it as they do that. Just clean enough so assessor could check paintwork etc.

He also told me what he thinks he can sell it for (and how that related to the price he’d pay me). I’m going to keep an eye on their web site to see whether he was being entirely honest 😉

He did offer me £500 more than anyone else though so I’m happy. Bit strange not to see it on the drive tho!

Cheers for this – my wife’s car ends in Jan and we were just going to hand it back.

That’s really interesting – I wasn’t aware of that also.

Silly clarification question – you had a BMW and you were ringing around BMW group car buyers to basically get a better deal than the dealership you took the PCP out from was offering? (Which was effectively £0).

I was planning to do the whole buy out the car & sell it route when my PCP is up as my car will be worth a far few grand over the balloon payment. Something like £5-7k by my rough educated guesses.

But if this route is competitive enough within a grand or so it does sound like much less hassle ey!

Silly clarification question – you had a BMW and you were ringing around BMW group car buyers to basically get a better deal than the dealership you took the PCP out from was offering? (Which was effectively £0).

Mostly. The car was bought with BMW Finance. The dealer I ‘bought’ it from told me they couldn’t offer me anything for it at the end of the contract.  So the settlement figure was the same for any BMW dealer, the difference is what they thought it was worth.

My supposition is my local dealer were just going to trouser the difference between Balloon and onward sale price. Other dealers were prepared to bridge the difference.  I’d have made more in a private sale (I checked a few sites) but the difference wasn’t enough for me to do it.

Works even better if you buy another car from them.

On the same basis as Alex OP, I sent my 120d back which would then nullify the £10k balloon if I walked away.  I negotiated my 320d from them and got:

£12,500 for the 120d

£1000 & a tank of fuel to buy the 320d

They paid the balloon, did all the admin and I walked away with £3500 off the new vehicle which represented 15% off the Sale price (ex demo).   I washed and hoovered the 120d which had illegal worn tyres and several dents where people had opened doors against it in car parks which made me very nervous but they didn’t bat an eyelid over it.  This whole process took 90 minutes and two signatures on my behalf.

Good to hear this has improved. I tried something similar about 15 years ago and was stonewalled all the way.

Works even better if you buy another car from them.

I did give them that option! That’s when they told me it wasn’t worth more than the balloon. You did really well out of yours. I didn’t really want another BMW anyway, but initially it never occured to me another dealer might want mine!

It was only when I decided to check some retail prices it became apparent there was this third option.

I washed and hoovered the 120d which had illegal worn tyres and several dents where people had opened doors against it in car parks which made me very nervous but they didn’t bat an eyelid over it

Mine was pretty much perfect. I told him that over the phone and he made his offer based on the fact they’d need to do very little work to get it on the forecourt. The assessor flagged one scuff on a wheel (which I’d told them about) and that was it.

When the term was up on my wife’s Clio the dealer initially offered us £500 less than the GFV but only if we PX’d it for a new car. With no PX they offered £1000 less! The car was completely unmarked and 15K miles under the allowed 6K PA. After reminding them that the GFV was “guaranteed” they reluctantly agreed to match it. Bunch of shysters.
We decided to keep it and I paid the balance off in cash just to inconvenience them.

I certainly knew you could do it if you were touting your car around dealers with a view to having another. And in fact, it doesn’t even have to be the same make, many dealers will still offer above the balloon payment to get your business for a new one, same as they would with any PX.

I also knew if you were only offered the balloon then the option was always there to buy it and sell privately and trouser the difference.

hadn’t realised that you could hand it back for clearing the crdit and then a handful of cash as well, but it makes perfect sense financially why they’d do it.

I think some people think that all [insert make] dealers are on the same side; of course they aren’t.

I did try and get the Skoda dealer to buy it, but he spurned me like a rabid dog 🙂

I have had really poor service from car dealers. I’ve assumed they’re all a bunch of ….., but Listers BMW were great. Really straight with me, one offer, no horse trading and then sorting it all out including paying off the remaining finance.

I reckon you’re right about dealers, they’re all in competition with each other – especially the one make franchises.

@doomanic – that’s really poor. Can’t even manage to follow the rule of law!

I think some people think that all [insert make] dealers are on the same side; of course they aren’t.

All the dealers are franchised out right? So a franchise might have 4 dealerships country wide, so you just gotta find a competitor franchise of the same brand and i’m sure they’ll happily clear your PCP and give you some cash if it means they can resell for another PCP deal fairly simply.

yep – what i mean is there’s an assumption that because [dealer] offers you this much, so will all the others for that make. Whereas they’d cut each other’s throats for the sale. Even within the same franchise, possibly.

Why would you PCP rather than hire in the first place if you’d no intention of buying it?

Genuine question, I assume I’m missing something here.

This is what scares me about car ownership. I like things I can understand!
New fangled PCP / lease / hire schemes seem too good to be true (everyone loves them) – kind of wary, a bit like endowment mortgages (you’ll recall those @Alex :))

Why would you PCP rather than hire in the first place if you’d no intention of buying it?

A few reasons

1) Hire is more expensive per month (see below!) except if I used Business Hire through the company. We did that once and analysis of cost/personal tax implications made it unattractive to do again.

2) I’m stupidly ‘price sensitive’ on cars. So I tend to ‘buy’ ex-demo/pre-reg that have hung about at the dealers for too long. They aren’t available on hire. The one that’s just gone back was 28% off list with 5 miles registered. It didn’t have all the options I wanted but you know 28% 😉

3) If you’re a stubborn git you can generally haggle APR down. This is where 2nd hand PCP is rubbish. The BMW was 3.7% and because it has high residuals as well it made the ‘loan’ / amount of credit fit into my budget.

4) I’m never sure what I’m going with cars. I’ve vacillated between having none, going hybrid, full electric or something else. WIth PCP it’s way less financially painful (esp after 50% contract length) to get out of a deal if it’s not working for you.

We looked at BCH for the replacement and it wasn’t going to work as it’s not a full electric. So again I went for the cheapest 4 year rental option. This one I plan (hah!) to buy at the end and keep. But that’s not why I chose PCP again.

Why would you PCP rather than hire in the first place if you’d no intention of buying it?

No intention of buying it? Does anyone really know for sure what they will do in 3 years?

In our case we were not 100% sure we wanted to keep it for more than the term (we were trading up to have a car capable of taking a pram). We just treated it as a finance deal; it was the cheapest overall cost and the lowest monthly payment when we looked into it.

I am also happiest to know the history of a vehicle, at the end of three years it had never been crashed and was proven to be reliable. We decided to keep it and took a loan to pay the final payment/value.

15 years later it is still going strong, but has had a new door panel (thanks neighbour). TCO is now close to £500.00 per annum plus insurance and tax. Biggest repair bill was about £500 for AC. Bangernomics money but we had a shiny new car for a while 🙂

I’m stupidly ‘price sensitive’ on cars

I like that phrase and will start using it, my wife just calls me tight 😉

1) Hire is more expensive per month (see below!)

Is it? It hasn’t been whenever I’ve looked, that was why I’ve gone PCH.

The one that’s just gone back was 28% off list with 5 miles registered.

How do you find such things? “Nearly new” was the best way to go, oh, 15-20 years ago and I’ve had some spectacular bargains, but I thought that market had dried up?

I’ve never gone PCH so you may be right. Only ever looked at it through the company as I (Used to) drive 15,000 miles per year for work on average. Benefit in Kind however has pretty much killed the company car. And the admin is unpleasant.

In terms of finding deals, honestly I’m just an arse. I view buying cars as transactional, I’m not interested in a relationship. I have zero loyalty to brand or dealer because none of them have earned it (unlike bike shop and bike companies)

So I just ring round what I’m interested in. I always pick March, August or December to buy as these are heavy target months. I ask what they’ve got and then offer them less. Eventually someone will crack.

I was very lucky with the last one I think. But my first Skoda we had nearly 20% off and it had about 300 demo miles. I also do the deal super quickly. If they can make a bit of money out of me for an hours work and it solves a problem they have, they’ll probably do a trade.

I never used to be like this. My mate (who is also my accountant) got me into this way of thinking.

Bangernomics money but we had a shiny new car for a while

Not quite as old as yours, but ours hits 14 years old in March – owned from new (on a 5 yr loan) but we preferred to be £165 a month better off when it was paid it off as we had two toddlers at the time costing us £££££££££s. Now we have two 11 year olds costing us even more so it is staying for as long as it keeps running. Probably costs us around £600 a year (exc. fuel) to run as the insurance is cheap as chips and it has been, on the whole, very reliable and routine maintenance has never cost too much – just the odd £300 bill here and there (Mazda 3 2.0l Sport). I’d love a new car but it only does about 2,000 miles a year now (it has only got 60k on the clock) so it makes absolutely no economic sense.