Quick question re PCP and who pays baloon

[gavsw20]

So, I've found a car and sorted a low interest loan for the purchase of a new car.

Place I'm buying the car from (RSJ Porsche) said they can pay my balloon (£19k) using the funds I pay them for the car.

Figures as follows: -
Car to purchase = £30k
Balloon on current car = £19,604
Equity (used as deposit) in current car = £6k
Balance to pay = £24,604k

Assume there's no benefit whether I pay the balloon or they pay the balloon is it?

[The Hack]

You have a 'balloon' to pay of £19k on a car worth £6k? What car are you p/exing if you don't mind me asking?

I think RSJ will insist on paying the balloon themselves just to ensure the finance has been paid off on the car they are taking in. Doesn't matter who pays it though, as long as it's paid. :)

[gavsw20]

You have a 'balloon' to pay of £19k on a car worth £6k? What car are you p/exing if you don't mind me asking?

I think RSJ will insist on paying the balloon themselves just to ensure the finance has been paid off on the car they are taking in. Doesn't matter who pays it though, as long as it's paid. :)

OK thanks for confirming.

981 Cayman for a 997.1 911.

[chrisparker]

You have a 'balloon' to pay of £19k on a car worth £6k? What car are you p/exing if you don't mind me asking?

£6k is the equity so the car is worth £25k, with £19k to pay.

[JasonM]

I think what he means is the current car is worth £25604.

[Dave+63]

They’re giving you £25604 for your car of which £19604 goes to pay the balloon and the remaining £6k is yours.

You’re using this £6k as deposit for your new £30k car and borrowing £24k.

All you have to do is take your car to the dealer, sign the paperwork and drive off in your new car; the dealership will do the rest.

It seems complicated the first time you do it but it’s actually quite simple in practice.

[Dave+63]

So, I've found a car and sorted a low interest loan for the purchase of a new car.

Place I'm buying the car from (RSJ Porsche) said they can pay my balloon (£19k) using the funds I pay them for the car.

Figures as follows: -
Car to purchase = £30k
Balloon on current car = £19,604
Equity (used as deposit) in current car = £6k
Balance to pay = £24,604k

Assume there's no benefit whether I pay the balloon or they pay the balloon is it?

Looking at these figures, if they’re giving you £25,604 for your old car (equity £6k) then you should only have £24,000 to pay.

If you’ve £24,604 to pay then they’re giving you £25,000 for your car and you only have £5396 equity.

You need to double check which one it is!

[mtagrant]

In reality, they are valuing your car at £25k and you are paying the £5k difference. You have an outstanding loan of £19k on the car you are trading in. If you are paying cash, then you should pay off the balloon. If they are giving you a loan for the value of the new car, they will probably want to send payment to pay off the balloon directly

[gavsw20]

Thanks for the advice re the above. All sorted now