Conditional Sale with a Balloon (Lease Purchase)

[Gary Cunningham]

I am looking to lease a used car and have found a company that offers this service at a low APR. They offer a Conditional Sale with a Balloon payment which even though the agreement allows 10k miles they will not charge for going over this. It seems the option at the end of the lease period is either pay the balloon payment or lease a new a car. I thought there would have been a 3rd option of giving the car back no questions asked (obviously the car being a very good standard). Has anyone ever taken a Conditional sale with a balloon payment and if so has there been any nasty surprises at the end of the agreement ? Thanks for any help.

[Stuart Masson]

Hi Gary. A conditional sale with a balloon will have similar payments to a PCP, but without the option to give the car back at the end. You will owe the balloon amount and you will have to pay it off.

The finance company may have used a 10,000-mile annual allowance to determine the monthly payments and the balloon, but because you are not able to give the car back there can be no penalty for going over that mileage. It doesn’t matter if you do a million miles a year because you will still owe whatever the balloon amount is.

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