How am I going to finance this? So stressed

[Whattodor]

I am a single parent and rely on my car for work. My car finance ends in Feb 2027 and I owe a balloon payment of around 8k if I want to keep the car.

I keep being contacted about buying another one and going onto a new finance plan and although I’d love a new car I just don’t want to keep throwing money away. Plus the plans they are offering are hundreds a month! I don’t have the 8k but could probably get together 3k by February. How will I finance the remaining 5k? I can’t work without my car. We live in the countryside. It has 50,000 miles so I think it’s worth keeping rather than a new one? It’s 7 years old.

it’s moments like this I feel so alone

I think it's hilarious people thinking anything over 10 years old is rubbish and a money pit. My OH and I own 6 cars between us and the NEWEST is 2009. Super reliable, cheap parts, and really easy to deal with because there are far less wanky computer parts to go wrong 🤷‍♀️

Of course they do. I saved up the balloon payment over the 3 years I had the financing.

How much did you pay for it overall though over what it would have cost new?

Give that car back and use your 3k deposit plus a bit of a loan to get something outright. Lots of cars with over 50k on the clock are still great- pick a decent brand (VW, Volvo, seat etc) and get a good warranty.

How is this judgemental tone helpful?

OP you’ve had some constructive advice on this thread. Good luck!

I have literally just traded in my 2015 VW, 130k on the clock- it was a brilliant car, super reliable and drove like a dream. I got something ULEZ compliant but if I am honest I preferred the old car to drive!

Can you get a personal loan for the other £5k? The payments probably won’t be much more than your current payment.

0% credit card then pay that down over time

loan from the bank (would be low interest rate got £5k)

agree, don’t get caught up in car finance trap

Give the car back and go get a normal bank loan to buy a different car, with monthly amounts you can afford. PCP is designed to rip people off or keep them in the vicious cycle of finance agreements. Don’t get bogged down with another one. If you pay for a car with a standard loan you’re free to do whatever you want with it and no final payment hanging over your head.

I suspect you are going to discover the interest rate on a loan for this is outrageously high. Maybe you will get lucky, but we have switched to buying new instead of slightly used cars because of the interest rate difference. They actually work out cheaper in the long run.

Not to add to the worry, but have you checked the mileage limit in your agreement? These types of plans often have shockingly low mileage allowances, with excess charged at punitive rates per mile if you hand it back.

Why don't you just give it back and lease a car instead (not PCP)? No huge upfront payment, maybe just 2 additional months' lease fees. Then at the end of the lease you can hand the car back or extend it. I extended for a couple of years then bought the car from the lease company for next to nothing because it was less hassle for them than collecting my car and putting it through an auction.

If you aren't fussy on model and make, you can pick whatever is a really good deal at the time.

Might it be better to take out a loan and buy a second hand car so this problem doesn’t arise in future?

PCP can work quite nicely if you get a car that has a decent resale value and you put down a reasonable deposit and think it all through properly first. The balloon payment at the end of a Toyota I used PCP for recently, was half the going price of an equivalent aged and ‘mileaged ‘Toyota. In the preceding 3 years, I’d driven a brand new reliable car. So PCPs are not all doom and gloom.

Here is a great video on the imagined cost of buying a car via PCP, leasing, Hire Purchase and buying the car outright. It shows the cost of that vehicle over 4 years. It is a good demonstration of monthly costs but also overall costs.

We have always bought cars outright but then we don't buy the most desirable badges so we are not paying a premium for a car that for us is literally to get from A to B comfortably and reliably. We have owned a Skoda Fabia 20 years ago and yes it did let water in and you got either ice or water depending on how cold it was inside the footwell. We definitely followed a Youtube guide on how to stop it and succeeded. But it doesn't mean it is a bad car. Skoda Fabia is basically the VW Polo. We have owned both.

Look at LeaseLoco for leasing options and you can search by monthly costs, it might buy you time over the coming years to potentially save some money considering you will have £3k by February.

I once made a £6k balloon payment on a car I’d been paying monthly for 4 years… enjoyed having no monthly payments. For a grand total of 4 months. Until the engine blew up. Absolutely fuming. Thankfully I took it to WBAC as the issue wasn’t always obvious for short drives and made back just over half of that. Was gutted. I’ll only ever lease again, would never do a pcp again x

Can’t you just give it back and buy a cheaper but dependable used car? Then go fancy car and balloon payments in future once you can afford it. ( Sorry if missing a crucial point)

Would definitely go used VW Polo (a v good car) and skip the potential icy / watery footwell of the Skoda.

I'm sure it would've needed more than brake pads and tyres in 10 years.

Air, fuel and oil filters for example, spark plugs and battery, possibly, plus a yearly MOT. Including the time you've spent getting the yearly MOT, and the brake pads + tyres, in the workshop/garage, getting to and from the garage, time spent hanging around, etc. All adds up.

Loan or add it to the mortgage depending on the rates available?

Dh took out a bank loan when he decided he wanted to keep the car. The monthly payments were slightly less than the car finance.

Bank loan? I did that when my lease came to an end and I wanted to buy the car

Some people like decent cars...

It's not about liking decent cars always...for me knowing it's a set monthly amount (lease scheme through work) and I won't get hit with unexpected garage bills that I can't cover
You can be lucky or unlucky with a used car

We like nice cars. Leasing is often a much better option. I’ve done it all - lease, PCP, balloon payment, car loan, buy outright etc.