Is it smart to exit a PCP a year early to start another PCP?

Is it a good strategy to exit a 42-month PCP early (say a year early) so there is still good equity in the car, to then start another PCP, as opposed to keeping the car for the full term and then taking out a new PCP?

Asked on 3 August 2017 by pro-engineer

Answered by Honest John

You are committed to a 42 month PCP, so if you exit 12 months early you would have to pay the final 12 months of payments in addition to the GFV and would only come out on top if the two payments collectively were less than the current market value of the car.

Tags: depreciation pcp finance consumer advice market value interest

Similar questions

Why are there so many leased cars on the roads lately?

I have noticed there seems to be an unprecedented number of newly registered, German brand, premium cars on the roads around my neighbourhood. They're presumably driven by people who would otherwise not...

Should I buy or lease a small car?

What are the pros and cons of buying versus leasing a small car?

Are cars on finance going to be fitted with "killer switches" in case customers can't make the payments?

In case you missed it in the newspapers recently, there was a feature on car finance firms that are worried about customers who may not be able pay for their cars. They are installing "killer switches"...