Is my plan a good one?

[SaintEyning]

I've just started a one year academic retraining and will be taking a 50% pay cut when I start my new job (teacher) in September next year. I've no personal debt other than mortgage and car PCP and have almost two years of mortgage payments saved up to see me through this time. However, I'm now thinking that I want to stop the PCP, and give back the car to the dealership early, buying a second hand one from them using some of my mortgage set aside (I would save the amount I'd spend on a new car in 21 months of setting aside the PCP payment).

The other factor in this is my mortgage renewal which will come up in 1.5 years. My mortgage could be nearly 10x my NQT salary - but still affordable as I would have no debt, still a good amount of savings and I also get child support plus will get a lodger at the end of my course.

Is it best to end the PCP (ideally through the dealer for simplicity) or carry on until the end of the 4 years (still 2.7 to go, by which time I would have repaid myself the money I plan to use on the car)?

[3luckystars]

Can you do that with pcp?

[SaintEyning]

Well my neighbour has just done it with his Range Rover which was on PCP - he found out that webuyanycar would offer him a value greater than the balloon payment (we got our cars at roughly the same time) so he was going to 'buy' it off RR early, becoming the legal owner, then sell it to WBAC. He told RR his plan (my car, whilst not a RR, has the same over valuation on WBAC) and they said, "just give is it back early and pick a new one". As the PCP is only to cover the depreciation anyway, so you give it back after 4 years or balloon payment it. Makes no odds to them when they get it back, as they've taken the risk of depreciation away with our monthly payments. I might just ring them on Saturday to see in case my dealer isn't as flexible as Jaguar Range Rover..

[Fluffycloudland77]

It's voluntary termination, you can hand them back using that.

If you've made two thirds of payments you can return it penalty free subject to wear & tear etc.

The conditions will be in your terms and conditions.

I've done it & bought again off the same company again so it won't affect a credit rating.