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Guide to the Common Dealership Terms When Buying A Car

Car Examer

With PCP, you pay lower monthly payments because a large portion of the car’s cost is deferred until the end of the agreement. At the end, you can choose to make a final payment (called a “balloon payment”) to buy the car, trade it in, or return it. It’s often called the balloon payment.

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What is a balloon payment?

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If youve ever taken out a PCP car finance deal, you may have heard of a balloon payment. If youre unsure exactly what it is, were here to help.

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Car Finance Mis-Selling: What’s Really Going On?

Car Examer

Vague or Misleading Terms: Key details like balloon payments, mileage limits, or early termination fees aren’t explained properly. Important Terms Were Glossed Over Did the dealer clearly explain things like mileage restrictions, balloon payments, or what happens if you want to end the deal early?

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Why Tesla sales have tanked and why the price will keep dropping

CarExpert

At the end of your lease period, you have the option of paying a balloon payment on the vehicle (that is the cost of the vehicle depreciated in alignment with the government schedule), refinancing the vehicle to continue paying a monthly rate or, in some circumstances, just handing the car back. And in some cases that works.

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Toyota launches subscription-style service for its new electric vehicle

Drive.com

A chart shown on the Toyota Australia pricing configurator notes the vehicle rental payment for the South Melbourne (3205) example as 80.36 per cent of the total lease payment, making the $1473.80 per cent interest with a 40 per cent ($28,800) balloon payment would cost approximately the same, at $1480 per month.

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How you can save by getting an EV on a novated lease

CarExpert

Once you reach the end of the period, you can either pay the residual or balloon payment – which on a five-year lease is about 28 per cent of the vehicle price – and keep the car. Lease periods are typically between one and five years and have a predetermined expected annual mileage.

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Tesla offering 1.99 per cent finance on Model 3

Drive.com

The offer is available for finance terms up to five years and is not eligible with balloon repayments. According to Stratton Finance , a balloon payment is a “lump sum owed to the lender at the end of a loan term after all regular monthly repayments have been made.”

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