There's a fourth option not mentioned-take all the money they're offering in p/x on a new car,take no cash from them-use it all as a deposit and ask for figures for a "hire purchase" agreement as opposed to the "special finance" deal you're in at the moment.Also ask your bank about a loan and compare interest rates.They're there to make money,not save you money.

As JC2 sayhs, it's worth looking at the HP figures as well as another PCP - but the advantage of the PCP is that you pay less per month. I've used PCPs for years and they work fine for me - provided that you're buying a replacement car and also buying a car which holds its value well.

The simplest thing to do is to get the best PX deal you can: this amount can be the deposit on your new car, and clearly the greater it is, the less you have to pay per month in future.

Option 2 isn't even an option - in fact it's bordering on insanity, the car is worth at least twice as much as the settlement figure. If you can't s-c-r-a-p-e (profanity filter) £1,800 together after running a frugal Panda for three years then your next vehicle should be a bicycle - you cannot afford a car.

Option 3 is isn't really an option either if they'll only give you the settlement difference, buy the car and then use it as a part ex then you'll get around £3.5K for it instead of the £1,800.