WWYD? Car finance

[QuietBatperson15]

Appealing to the financially savvy out there!

I have a Hyundai Tucson on PCP finance which is coming to an end in March. I love this car and had originally planned to trade it in for a newer version, however the finance calculator for PCP is coming in at £270 per month as opposed to the £117 I pay now. This is for the same car but 2-3 years newer.

• The car is nov 2017 plate, and cost 13,000 with a 2.5k deposit.
• Purchased in March 2021
• The balloon payment is £4,700 for the finance company.
• Current valuation is approx £6,500

Have interest rates jumped way up for PCP deals since 2021? I’ve previously used hire purchase option for cars so this was my first time using PCP.

Would a personal loan make more sense or can I take it in to a dealership and they would arrange car finance (as a loan) for me even if I’m not trading it in? Ideally I’d like to pay as close to what I’m paying now as possible.

Bank of England based rates in 2021 were 0.25% now they are over 5% so sadly this is what will be affecting it.

Have you thought about leasing? Just pay your amount and get a maintenance plan so no surprises or even paying for services as all included? Give it back in 2-5 years and go again?

A lot of high street banks and other companies offer a balloon refinance option now.
Check for deals on your banking app or have a look on Money Supermarket
I had the same issue last year. Loved my car, low mileage etc and a lot more expensive rates for the same but newer. I just refinance with my bank instead.

Thank you for responding. Yes that makes sense, Ill find my original deal and compare and bet it was a lot lower interest rate at the time. Do you know how I would go about leasing? Is it just like extending the PCP?

Thank you! I didn’t realise the banks had a specific option for the balloon payments, good to know. Have had a look at a couple of loan options and put for car as the reason and it definitely seems the cheaper option, coming up about 150 per month👍

It’s so hard now - cars that cost £8000 just before the pandemic are now double that. £15k will barely buy you a two year old Fiesta! It’s so frustrating for those of us with little spare disposable income and no company cars. And to think they want us all to switch to electric cars that are even more expensive..!