Your PCP is ending. Three choices.

Hand it back, settle the final payment, or part-exchange. They lead to very different places, and the one most people default to is not always the cheapest.

Work out which of the three routes is actually cheapest

  • The two numbers that decide it, and where to find both
  • What excess mileage and damage charges really cost
  • Why the dealer leads with part-exchange, and when they are right

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Where each route leaves you

Hand it back

You return the car and owe nothing further, provided you are inside the mileage limit and the condition meets the standard in your agreement. Excess mileage and damage are charged separately.

£

Pay the final payment

Sometimes called the balloon or optional final payment. Pay it and the car is yours. Whether that is good value depends on what the car is actually worth against that figure.

Part-exchange

If the car is worth more than the final payment, that difference is equity you can put towards the next agreement. If it is worth less, there is nothing to carry over.

The number worth finding first

Before deciding anything, find two figures: the optional final payment on your agreement, and what your car is currently worth. The gap between them decides which of the three routes makes sense, and it is a five minute job.

Dealers will often lead with the part-exchange route because it starts a new agreement. That does not make it wrong. It does make it worth checking the other two yourself.

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Work out which of the three routes is actually cheapest

  • The two numbers that decide it, and where to find both
  • What excess mileage and damage charges really cost
  • Why the dealer leads with part-exchange, and when they are right

Free. Choose email, text, or both. Unsubscribe from any message.

Motor Moola is a free newsletter about running a car. Choose how you would like to hear from us.

Your details are stored securely. You can ask to see the record we hold, or withdraw any of these permissions, at any time.