PCP Up on Yaris advice please

Hi,

So my mother has had a Yaris on PCP finance for the last 3 years which she traded her car in as the deposit originally, its up in a few months so she will have to decide whether to buy the car or lease a new one.

At this stage she doesn't know what to do, shes due to retire in about 3 years so my thought would be she should just continue on the PCP for 3 more years and buy it then.

The problem being if shes retired then there no money coming in so shes wondering should she take out a loan off the credit union or such and just buy this car outright and pay it off over the last 3 years shes working.

How is PCP best used by the consumer, is it always a good idea to buy the car at the end of the term or does taking up the new car option and continuing to lease make the most sense.

The end game here is that my father who is also going to retire soon wont drive a yaris, so they will end up with a bigger car, so if she did buy it , it would then be traded in against something else.

I suggested maybe asking him what toyota he would drive, maybe an Auris or something like that and leasing that instead for the next 3 years and buying it then.

exaisle

The problem with PCP is that eventually, your chickens come home to roost.

The Yaris is a decent small car. I'd be inclined to take out a loan now to clear the balance rather than face the same dilemma with less income in three years time...

650Ginge

Milena Blue Nation wrote: »

Hi,

So my mother has had a Yaris on PCP finance for the last 3 years which she traded her car in as the deposit originally, its up in a few months so she will have to decide whether to buy the car or lease a new one.

At this stage she doesn't know what to do, shes due to retire in about 3 years so my thought would be she should just continue on the PCP for 3 more years and buy it then.

The problem being if shes retired then there no money coming in so shes wondering should she take out a loan off the credit union or such and just buy this car outright and pay it off over the last 3 years shes working.

How is PCP best used by the consumer, is it always a good idea to buy the car at the end of the term or does taking up the new car option and continuing to lease make the most sense.

The end game here is that my father who is also going to retire soon wont drive a yaris, so they will end up with a bigger car, so if she did buy it , it would then be traded in against something else.

I suggested maybe asking him what toyota he would drive, maybe an Auris or something like that and leasing that instead for the next 3 years and buying it then.

Retiring with two cars. Money isn't much of an issue really?

Pcp has interest, new cars have depreciation, a yaris goes forever. So unless the pcp buyout is less than the price she can buy the same car for on the market then buy the car you know.

Look after it and get 20 years outta it. I get passed by 1999 Yaris everyday.

mickdw

It does seem that buying out this car might be best option if income is unknown or low in retirement.
Also, if a new car on pcp is being considered, it doesn't have to be a Toyota. She can take her yaris in and change it for any brand in any dealer. All she needs is settlement figure from toyota then any other dealer will be able to take over and offer a deal.
She could also consider doing a deal on a good used car that husband may also be happy with it via hp over 3 years meaning they would own that car outright by retirement and it would be a car they wanted and didn't need to go swapping again.

maidhc

Milena Blue Nation wrote: »

The problem being if shes retired then there no money coming in so shes wondering should she take out a loan off the credit union or such and just buy this car outright and pay it off over the last 3 years shes working.
.

This seems very sensible.

Lantus

Everyone needs a pcp exit strategy. Sounds like now is a good time to pay off the remainder and keep the car with very low mileage and overheads once retired.

650Ginge

650Ginge wrote: »

Retiring with two cars. Money isn't much of an issue really?

Pcp has interest, new cars have depreciation, a yaris goes forever. So unless the pcp buyout is less than the price she can buy the same car for on the market then buy the car you know.

Look after it and get 20 years outta it. I get passed by 1999 Yaris everyday.

Ah it will be, dads is a brand new Mondeo but its a company car so he will be giving that back

dil999

exaisle wrote: »

The problem with PCP is that eventually, your chickens come home to roost.

The Yaris is a decent small car. I'd be inclined to take out a loan now to clear the balance rather than face the same dilemma with less income in three years time...

There is no dillema. She has a number of choices.
1) She can hand in the car and walk away.

2)She can trade it in and use any excess trade in value against another car if she wishes. She can go PCP on the next car or not. Her choice.

3) If she wants to keep the car, she can just complete the final payment. Its the best value 3 year old Yaris she can buy. If she doesn't have the cash, the dealer will probably arrange finance for her that will be a lot cheaper than a Credit Union loan.

The OP is saying about her not having any money coming in after she retires. If that's true, I think her real financial issues are around not having a pension, and not the fact that she financed the purchase of her last car via PCP.

dil999

Very important note to the OP.
If she doesn't proactively manage the termination of the PCP arrangement, the final payment will automatically come out of whatever bank account the monthly payments were being debited from.

dil999

dil999 wrote: »

There is no dillema. She has a number of choices.
1) She can hand in the car and walk away.

2)She can trade it in and use any excess trade in value against another car if she wishes. She can go PCP on the next car or not. Her choice.

3) If she wants to keep the car, she can just complete the final payment. Its the best value 3 year old Yaris she can buy. If she doesn't have the cash, the dealer will probably arrange finance for her that will be a lot cheaper than a Credit Union loan.

The OP is saying about her not having any money coming in after she retires. If that's true, I think her real financial issues are around not having a pension, and not the fact that she financed the purchase of her last car via PCP.

They aren't too bad, he has a pension which is pretty crap but there is about 1.2 m equity in the house if it went tits up, just day to day costs need to be managed. Not relying on state pension alone but not exactly flush.

From what you are saying I think they are probably best off changing the car now, to one that he would be happy with and buying it outright when the pcp on that is up in 3 years.

Thanks for the help lads, lots of stuff I wasn't aware of.

What's the scenario for changing pcp, i.e she is with Toyota now, what if he said he wanted a Volkswagen and they wanted to change to vw?

Casati

Milena Blue Nation wrote: »

They aren't too bad, he has a pension which is pretty crap but there is about 1.2 m equity in the house if it went tits up, just day to day costs need to be managed. Not relying on state pension alone but not exactly flush.

From what you are saying I think they are probably best off changing the car now, to one that he would be happy with and buying it outright when the pcp on that is up in 3 years.

Thanks for the help lads, lots of stuff I wasn't aware of.

What's the scenario for changing pcp, i.e she is with Toyota now, what if he said he wanted a Volkswagen and they wanted to change to vw?

They can trade the Yaris in with any dealer, the dealer buying it will pay off the remaining finance and give them any equity in the car towards whatever new car they buy. I'm general a Toyota dealer might give a little more on trade in than say a VW dealer but the Yaris is a good secondhand seller so they might do okay either way