What do you think to this deal?

[Thomas C]

I want to know if this is a good deal.

I have hp on Volvo c30, only 14 months in over a four year deal, pay 235 a month.

To get a Volvo v40 with a deposit of 700 and the garage taking my car I will get a new Volvo v40 for 323 a month.

I think that's balloon though.

Any good?
Gone to two garages and they both quoted about the same

Thanks

[cheshired5]

It's impossible to say with such a small amount of information.
You don't state the spec of the cars in question, the price of the cars, age, mileage, history, term of the new finance deal. You don't even know if you'll own the car after your final payment.
We need LOTS more info.
As you're only 14 months in to a 48 month HP deal currently, I do know at least that you'll be getting your arse spanked from all sides.
Do you really need this new car or is it just that you want it?
Because this is car "buying" at its most expensive.

[tickedon]

Originally Posted by Thomas C

I want to know if this is a good deal.

I have hp on Volvo c30, only 14 months in over a four year deal, pay 235 a month.

To get a Volvo v40 with a deposit of 700 and the garage taking my car I will get a new Volvo v40 for 323 a month.

I think that's balloon though.

Any good?
Gone to two garages and they both quoted about the same

Thanks

You have the highest depreciation in the first year, so you'd be switching at pretty much the worst time.

You need to ask for the detail of the transaction to see exactly what you are paying - i.e. what are they valuing your car at vs what you have to pay off on the HP. Are they rolling over a large sum owing into the next finance agreement etc.?

Unless you were looking at the V40 D4 or T5, I would hold off on switching over - if you wait a bit longer, the newer, more efficient (with lower tax etc.) VEA engines should be available across the range. You'll also have paid more off on the C30, and not be switching at the wrong point on the depreciation curve.

[Thomas C]

It would be a brand new r design v40, but PCP - balloon thingy.

Because of the way I am and always changing my cars I don't think I will ever own one and it doesn't particularly bother me.

My settlement figure for my current car is 7,300. I think they value my car at 6,000.

I owe just under 9,000/ on my C30.

[John_C]

It's your choice but isn't there something else you'd rather be spending the thousands you're paying the finance company? Nice holiday? Better car?

Your're in negative equity with your current car, so you're bundling that debt into a new loan. Because of the way finance works you pay off more interest initially and as you go through the loan you gradually pay off less interest and more of the cost of the car.

If you keep doing that you end up funding a massive loan for a pretty average car.

Been there. Done that. Older and if not wiser then certainly more alert to the actual costs of borrowing money.

It's completely your life and your decision but it will cost you a lot more. It's not even about ownership - if you've a budget of over £300 a month you can get some cracking cars brand new for around £250 a month as a lease and change every two years.

[Thomas C]

Originally Posted by John_C

It's your choice but isn't there something else you'd rather be spending the thousands you're paying the finance company? Nice holiday? Better car?

Your're in negative equity with your current car, so you're bundling that debt into a new loan. Because of the way finance works you pay off more interest initially and as you go through the loan you gradually pay off less interest and more of the cost of the car.

If you keep doing that you end up funding a massive loan for a pretty average car.

Been there. Done that. Older and if not wiser then certainly more alert to the actual costs of borrowing money.

It's completely your life and your decision but it will cost you a lot more. It's not even about ownership - if you've a budget of over £300 a month you can get some cracking cars brand new for around £250 a month as a lease and change every two years.

Thanks. I'm just being greedy.

There is nothing wrong with the C30. It's a nice car.

I need to wait a year and I'll be in a much better decision.

When you say lease do you mean balloon payment, pcp?

I can pay 323. It's not out of budget, but I'll just be stupid. I need to wait. Grrrr

[tickedon]

Originally Posted by Thomas C

When you say lease do you mean balloon payment, pcp?

I can pay 323. It's not out of budget, but I'll just be stupid. I need to wait. Grrrr

I think waiting is a sensible decision

In terms of lease... you can actually 'properly' lease a car now. It's called Personal Contract Hire (PCH, vs PCP - Personal Contract Purchase).

You generally pay a deposit (often this is huge, to give a lower headline monthly price) followed by 2-4 years of payments. At the end of the agreement, your only choice is to hand back the car (there's no balloon or option to purchase etc.). This means if you go over the agreed mileage, or the condition of the car isn't up to scratch, you can be in a bit of bother and be forced to hand over lots more cash.

The PCH deals are often expressed as '9+23' which means it's 9x the monthly cost for the initial rental payment, followed by 23 monthly payments. In any car purchase, you are looking to finance it in a way that means you do better than the predicted depreciation - there are lease deals out there, where over the 3 years, your lease payments would be less than the predicted depreciation. This is obviously good, especially if you'd have changed cars anyway, and you've managed to stick to the mileage and it's in good condition.

But personally, I think PCP is far more sensible. You've more options at the end and the pricing normally isn't that much different.