[Auto] James Ruppert: What to do when your finance deal is up

[The GodFather]

 

 

Here it is, the question I’m being asked on an increasingly frequent basis. Indeed, it is a bit like a game of cards and it goes something like this: “Our vehicle is coming to the end of its finance agreement. What do I do next: stick, twist or something else?”

 

So let’s put some meat on this. I was shooting the car-buying breeze recently with a guy called Matt, who threw a couple of other important issues into the mix. He had a three-year-old BMW X3 on finance and the deal was done on 10k miles per annum, but it has done just 8k in three years. The finance company wanted £18k for it. Matt noticed that cars of the same specification and age are retailing, obviously with more miles, at around £24k to £25k. His example, then, could potentially retail at rather more.

 

This is a fascinating conundrum, especially as we live in such uncertain times. The car dealer inside me believes that Matt should simply just buy it and flip it for perhaps a couple of grand right now. Using it for a year before moving it on is certainly tempting, but who knows what the residual value will be in a year’s time? There might be strong demand for a car because there may not be so many about. Then again, it might be the end of the world and everything could be worth £10k tops, or a pint of milk, or a four-pack of toilet roll.

Arguably, the best strategy for Matt is to buy it from the finance company and then have it permanently on sale, actually moving it on when he gets an offer he likes. After that, take the money, run and buy something else. But what to buy?

 

Would it be just another high-rise family car, which might possibly have four-wheel drive or not? Let’s face it: all anyone really needs is a Nissan Qashqai and there are millions to choose from. So here you go: with just £1999 to spend, you can bag yourself a front-wheel-drive 2007 2.0 dCi Tekna that’s covered less than 100k miles, has a full year’s MOT and comes with a panoramic sunroof.

 

That is an extreme, but if you got a solid £25k back, then why not go for something interestingly and depreciatingly Italian. A 2018 Alfa Romeo Stelvio with under 50k miles will be £24,500 or so for a 2.0-litre petrol in Milano Edizione spec. You’d find yourself in the same place, of course, where after a few years you end up with not much to show for all that expenditure.