my pcp ends in August and since I like the car I want to keep it.The final payment to buy the car is about £3500 but with no bonus at xmas and having to take a pay cut I have other things to think about.

my mate at work said that i could just continue paying the monthly payment until the loan is paid off.

is this correct ?

thanks

No.

You'd need to refinance the balloon payment.

my pcp ends in August and since I like the car I want to keep it.The final payment to buy the car is about £3500 but with no bonus at xmas and having to take a pay cut I have other things to think about.

my mate at work said that i could just continue paying the monthly payment until the loan is paid off.

is this correct ?

thanks

You can give the car back and walk away if the car is worth more than the final payment you will recive the extra. Or refinance the final payment bank loan or pay cash. If you pcp the car from new and you are thinking of keeping her £3500 for a 3/4 year old car is cheap

Edited 12 January, 201214 yr by skoda1982

I bought the car when it was 16 months old.it's only done 23,000 so still like new.

£3500 ish still winner

When the deal ends on a PCP there will be a GFV. This is the guaranteed final value and in your case is apparently £3500. The dealer may value the car at more than this. Lets say they say its worth £4000. This means you have £500 equity in the car. The equity is the difference between the value and the GFV. The dealer will usually be happy to let you use this equity as a deposit on another car. It is rare that the dealer will accept the car back and give you this equity in cash to take away.

Some dealers will refinance for you so that you can keep paying the same monthly payment to pay off the GFV. Or you borrow the £3500 elsewhere to give to the dealer to pay it off.

Speak to the dealer first to explore the options.

At the end of a PCP unless you pay the final payment in full then the car is taken back by the finance company, you have the option to buy the car by paying it in full and as mentioned this can be either cash or another loan from a different provider (eg. your bank). You cannot simply carry on paying monthly payments, a PCP is not like a mobile phone / sky or other contract with a minimum term.

Like others have stated above you need to pay the balloon payment. I have found that the balloon payment amount is quite a bit lower than the trade in value of your car. When I had my last car (Fiat Grande Punto) the balloon payment was like yours £3500 I didn't want to keep the car but I still payed the £3500 as I had already agreed a px price with skoda of £4700.

So i basically paid off the balloon then traded it in the next day and was £1200 better off.

Just thought I would share as it is something to consider.