I have recently discovered that my balloon payment, due at the end of my PCP, which comes to an end in 30 months time, is quite possibly going to be double what the future value of my car is likely to be. (At the current market value, it is already £7k less than the balloon payment.)
I always thought that finance lenders calculated the balloon to be quite close to the GFV. Never in a million years did I anticipate the possibility of being in a situation where I might have to pay £16K to £20K over the value of the car to settle the balloon payment at the end of my PCP agreement.
You say “Never in a million years did I anticipate the possibility of being in a situation where I might have to pay £16K to £20K over the value of the car to settle the balloon payment at the end of my PCP agreement”
If my understanding of the situation is correct, as you are on a PCP you are under no obligation to pay the balloon payment when the contract period comes to an end. You can simply hand the car back and walk away, but the car must be in good condition.
This leaves you free to start again. You can then either buy a car with real money or a finance loan, start another PCP or a third option is to consider a Contract Hire.
Did you fully read in detail the PCP contract that you took out ? If you did then there should be no surprises or disappointment for you at the end of the term.
There is also an option to voluntary terminate the agreement early but I think that might only be possible when you are past the half-way stage. My knowledge on that is poor as I’ve never had to look into it. There is most likely a helpful article about early voluntary termination on this website.