PCP- what to do about the car?!

[Jellicalcats]

We have a Jeep on PCP (4 years) which comes to an end at the beginning of May.

It’s been a great car but recent replacement of bushings cost >£2k because the only parts available had to be shipped from Italy (we tried multiple garages and Jeep and got the same answer). This is the only real issue we’ve had other than the electrics occasionally going haywire in hot weather.

The balloon payment of £8.1k and an online valuation puts it at £7.3k so logic says hand it back to the finance company.

However, hubby in a clumsy moment put a small (2-3cm) tear in the ceiling fabric and the quote for fixing it has been ~£2k, and the bin men rested their bin picker-upper on the car and put a small dent in the side of the roof 🙄. I’m worried the finance company will impose a possibly big penalty if we hand it back, we also don’t want to carry on with another PCP but also don’t want to pay £15-18k on a new used car to replace it yet.

Can anyone advise what you would do?

I’m thinking pay the balloon payment and then part exchange it eventually once it starts costing a lot to maintain it?

We’ll pay slightly over the odds for the car but won’t have to change the car just yet.

Any opinions? This is the first PCP we’ve had and we’ve found it stressful.

What’s your plan for a car afterwards? If you’re buying a new car, but doing a HP instead where you own it, I’d just trade it in. When they’re getting a sale out of you, they very rarely look at any wear and tear. They’re just glad to get some commission for a new sale.

Sorry for ignorance on this (I’ve always owned cars outright before) but we’re a bit confused about the process at the end of the finance period.

So could we go to any car sales place and trade the car in and take on a HP instead? My concern is that if the balloon payment is £8k and the car is worth £7k we’d be £1k down and then will have to put a lump sum in as well. Is that right?

In answer to your first question, that’s correct. You can trade it in anywhere, and then take out another finance arrangement on a new car.

I understand your concern on the potential negative equity when trading yours in. Some car dealerships will just write it off if they are getting a sale/commission. Or they will “knock” £1K off the price of a the new car (likely an inflated price to begin with).

It’s definitely worthwhile visiting a couple of dealerships to see what kind of deal you can get. Don’t mention what your current car has been valued at, let them offer you a price first.

You could even go now and trade in early, you don’t need to wait until May. I did mine around 6 months early and got a good deal.

I think if the car is otherwise suitable it's probably worth buying it and running it for a few years and just live with the current damage. The bumps and scrapes won't affect the value anywhere near as much selling it when it's old as people expect that and are more concerned about reliability.

Yes you'll overpay but if you hand it back you could face similar or bigger penalties and have the cost and hassle of finding a new car.

Unless the dent is massive, a PDR should fix it for around £100. The roof liner could be patched up and barely noticed if done right. Get quotes for repair from a good detailer first.

Jeeps are notoriously unreliable, so keeping it will probably cost you a lot in the next few years.

@Chiseltip is it a detailer we need for this? We’ve approached a few garages about the fabric and drawn a blank. Only Jeep do it and quoted nearly £2k!They would only replace the whole fabric which is excessive for a 2-3cm tear.

I know this isn’t quite the point of your thread but I’d suggest looking at a personal loan for your next car. HP/PCP finance is generally a much higher interest rate.