Hi,

I have a 2 year old Jaguar Sovereign 3.0 litre, petrol, automatic. Cost me about £31K. I bought it out right.

I am thinking of replacing it and am in a quandary how I should finance it. I think that it will be more cash efficient if I go on a finance scheme whereby I pay a deposit then monthly payments over a 3 year term. At the end of the term I can either hand the car back or pay an additional amount to own the car. (what’s this scheme called”).

This looks attractive because the annual depreciation on the Jag has been about £7k (seems excessive but 3 different garages came up with similar figures). Ideally I would like to change my cars every 2 to 3 years.

The other option would be to keep it for 5+ years and more or less write off any residual trade in value which would be very low in any case.

Would appreciate your views/advice.

Regards

Voytek

Paying a lump sum at the end is called a "Balloon Payment" This payment should be less than what the car will be worth at the end of the term. I have seen Lloyds (Black Horse) do a plan where you can hand the car back.

I would be inclined to suggest you only do the balloon payment if you intend to trade the car in when it is due as circumstances can change in a few years and you might find yourself unable to pay it.

Or, If you want to keep it simple I would get finance without a balloon and then at the end of the term you have a choice to trade or sell private. You will get more for your car if you sell the car rather than trade it in.....

You could always ask to see figures for both options and see which one is cheaper in interest?/ payments?

Don't know if I have helped any.......

Hi,

Marks and Spencer Money do the car purchase plan - (I have one at the moment with Alliance and Leicester but they dont offer it now)

You can deferr up to 60% of the cars value until the end and take a loan out on the rest over 3,4 or 5 yrs.

I borrowed £11k deffered £3k of it for 48 months and my payments are based on £8k = £193 a month. No commitment to mileage (dont get penalised if Im over 10k miles or anything) its my car completely can do what I like with it - total payable is £12264-bargain!

Basically the same as a pcp without mileage restrictions and its not connected to the car so if you did want to change it you can.

It not for everyone but it works for me, hope it helps you,

Paul