Car finance dilemma...
Discussion
Hi,
Hoping to get some level-headed opinions, if that's possible!
I started a new job with a round-trip commute of around 150 miles six months ago. I do this twice a week.
At the time, I used the pay rise to fund a new car. I bought a very sensible three-year-old Honda CR-V Hybrid on PCP finance.
I quite like it. It's well equipped, comfortable, and hopefully will be very reliable. I planned to keep it a long time.
However, I've been doing some idle Auto Trader browsing. There are some very affordable secondhand EVs out there. I've driven a lot of EVs and know I like them. I can charge at home and work, so I think they'd suit my needs well. I'm getting around 40mpg out of the Honda so I ought to save quite a lot on fuel if I did this.
I've contacted my finance company and they've provided a settlement figure of around £20k. According to Motorway, I can get around £21,500 for the Honda. Am I being dense, or can I get rid of the Honda, pocket £1500 and go EV shopping? Would this be a foolish move? Obviously I'd expect whoever bought the Honda to try and chip me down a bit, but it's mint so they'd struggle. I thought I'd be a in negative equity at this point in the PCP so I'm surprised this is an option...
What am I missing?
Hoping to get some level-headed opinions, if that's possible!
I started a new job with a round-trip commute of around 150 miles six months ago. I do this twice a week.
At the time, I used the pay rise to fund a new car. I bought a very sensible three-year-old Honda CR-V Hybrid on PCP finance.
I quite like it. It's well equipped, comfortable, and hopefully will be very reliable. I planned to keep it a long time.
However, I've been doing some idle Auto Trader browsing. There are some very affordable secondhand EVs out there. I've driven a lot of EVs and know I like them. I can charge at home and work, so I think they'd suit my needs well. I'm getting around 40mpg out of the Honda so I ought to save quite a lot on fuel if I did this.
I've contacted my finance company and they've provided a settlement figure of around £20k. According to Motorway, I can get around £21,500 for the Honda. Am I being dense, or can I get rid of the Honda, pocket £1500 and go EV shopping? Would this be a foolish move? Obviously I'd expect whoever bought the Honda to try and chip me down a bit, but it's mint so they'd struggle. I thought I'd be a in negative equity at this point in the PCP so I'm surprised this is an option...
What am I missing?
Well nothing really on face value based upon that offer the maths is pretty simple, just work out the fuel savings using a worst case scenario and go from there.
You might be missing the deposit you put into the civic in terms of lost money in that you haven't made 1.5k just got back that amount from the (example) £5000 you put in plus the payments, chopping and changing cars frequently isn't cheap as you always pay for the dealers margin on both sides of the deal.
You might be missing the deposit you put into the civic in terms of lost money in that you haven't made 1.5k just got back that amount from the (example) £5000 you put in plus the payments, chopping and changing cars frequently isn't cheap as you always pay for the dealers margin on both sides of the deal.
If your preference is towards owning an EV for this kind of driving and hopefully making a saving with low rate home and work charging, the man maths should work out ok. I guess you need to include all your costs of the current car over the period of time you may own it based on your current usage and forecast the costs of EV ownership, try to consider depreciation also. 40mpg as an average is pretty poor in my eyes though for your current car.
Anyway, if its a financial decision only, then the maths will inform you of what to do. If you just fancy an EV, then the maths doesn't matter as much as it won't be much to change.
As for moving the car on, I may be wrong, but pretty sure you may be able to pass/sell the current deal to someone else, although that may only be related to lease cars, I am no expert in this area but worth you checking those options. Think there may be some threads in here relating to this topic.
I would recommend using Carwow if you are going to sell the car on through one of these auction sellers, I had a great experience, was able to set the auction reserve and got better money than they had forecast, so worth a look there too.
Anyway, if its a financial decision only, then the maths will inform you of what to do. If you just fancy an EV, then the maths doesn't matter as much as it won't be much to change.
As for moving the car on, I may be wrong, but pretty sure you may be able to pass/sell the current deal to someone else, although that may only be related to lease cars, I am no expert in this area but worth you checking those options. Think there may be some threads in here relating to this topic.
I would recommend using Carwow if you are going to sell the car on through one of these auction sellers, I had a great experience, was able to set the auction reserve and got better money than they had forecast, so worth a look there too.
Wills2 said:
Well nothing really on face value based upon that offer the maths is pretty simple, just work out the fuel savings using a worst case scenario and go from there.
You might be missing the deposit you put into the civic in terms of lost money in that you haven't made 1.5k just got back that amount from the (example) £5000 you put in plus the payments, chopping and changing cars frequently isn't cheap as you always pay for the dealers margin on both sides of the deal.
Good point - I put about £4k down initially, so that'll be why I'm in positive equity.You might be missing the deposit you put into the civic in terms of lost money in that you haven't made 1.5k just got back that amount from the (example) £5000 you put in plus the payments, chopping and changing cars frequently isn't cheap as you always pay for the dealers margin on both sides of the deal.
Something like this would still save me a considerable amount each month, even with a much smaller deposit this time: https://www.autotrader.co.uk/car-details/202503140...
Ultimately it's the dealers that'll be making money here... but my monthly outgoings will be reduced and I'll be driving something new (to me) so I'll be happy.
Evil.soup said:
If your preference is towards owning an EV for this kind of driving and hopefully making a saving with low rate home and work charging, the man maths should work out ok. I guess you need to include all your costs of the current car over the period of time you may own it based on your current usage and forecast the costs of EV ownership, try to consider depreciation also. 40mpg as an average is pretty poor in my eyes though for your current car.
Anyway, if its a financial decision only, then the maths will inform you of what to do. If you just fancy an EV, then the maths doesn't matter as much as it won't be much to change.
As for moving the car on, I may be wrong, but pretty sure you may be able to pass/sell the current deal to someone else, although that may only be related to lease cars, I am no expert in this area but worth you checking those options. Think there may be some threads in here relating to this topic.
I would recommend using Carwow if you are going to sell the car on through one of these auction sellers, I had a great experience, was able to set the auction reserve and got better money than they had forecast, so worth a look there too.
Appreciate your thoughts, thanks. Definitely some 'man maths' going on here... I usually change cars every six months or so anyway, but I planned on the Honda being a keeper. I'll definitely try Carwow.Anyway, if its a financial decision only, then the maths will inform you of what to do. If you just fancy an EV, then the maths doesn't matter as much as it won't be much to change.
As for moving the car on, I may be wrong, but pretty sure you may be able to pass/sell the current deal to someone else, although that may only be related to lease cars, I am no expert in this area but worth you checking those options. Think there may be some threads in here relating to this topic.
I would recommend using Carwow if you are going to sell the car on through one of these auction sellers, I had a great experience, was able to set the auction reserve and got better money than they had forecast, so worth a look there too.
You'd also need to factor in the cost of a home charger, budget £1k for it.
How much have your monthly payments been over the 6 months you've owned it - to help give you the cost of ownership.
How long have you got left on your PCP - 2.5 years?
Personally I'd be inclined to hold off for 6 months or so as you'll be further into your PCP deal and should have a lower settlement figure.
Does your current company not offer a salary sacrifice scheme for electric cars as a lot seem to nowadays...? Obviously there are tax implications / pension contribution impacts but may be an option worth exploring.
How much have your monthly payments been over the 6 months you've owned it - to help give you the cost of ownership.
How long have you got left on your PCP - 2.5 years?
Personally I'd be inclined to hold off for 6 months or so as you'll be further into your PCP deal and should have a lower settlement figure.
Does your current company not offer a salary sacrifice scheme for electric cars as a lot seem to nowadays...? Obviously there are tax implications / pension contribution impacts but may be an option worth exploring.
Gassing Station | Car Buying | Top of Page | What's New | My Stuff