Upgrade car on finance

[drawboy]

I have a car bought on main dealer finance. I fancy an upgrade to a better model. The car I have isn't out of finance until Feb 13, but the dealer has said that it isn't a problem and that they get me a settlement figure, add it to the cost of the new motor then knock off my cars value in trade in that will leave a new figure to pay on finance.
I really am looking at a second hand car, prob less than 6 months old with less than 5k on the clock. The dealer is trying to get me to buy a new model, offering a grand off list, a years free insurance and lower interest terms than the second hand option. I have a feeling that this deal will be one of those with the final payment to own the car, I do not want that as I'll own nowt at the end, should I be able to get the same deal on HP?
If I don't get the exact deal I want then I'll wait till Feb and trade the car then, what do you think I should do?

 

[chrisd]

Do what you have said, only you know what is best for you

 

[rosecott]

See Smiffy, you're far enough away from Sussex to not affect his commission.

 

[Smiffy]

I have a feeling that this deal will be one of those with the final payment to own the car, I do not want that as I'll own nowt at the end, should I be able to get the same deal on HP?

There is no reason why you'll have "nowt at the end" going onto a PCP finance plan. You usually have 3 options at the end of the agreement. Hand the car back and walk away (which you would be mad to do but the option is there if you want it), pay the end figure and keep the car or trade in and buy another one. If the end figure is sensible, you should have enough left over to go as deposit on your next new car.
I doubt very much whether you would get the same finance rate on a 2nd hand (or demonstrator) car as the salesman is right. Most manufacturers are offering "subsidised" finance rates on new cars to generate sales. On our Nissan range, PCP finance is currently 6.9% APR (which is a flat rate of 3.5%). We cannot get rates this low from our used car lenders, (including Nissan finance), most deals we do at the moment on used cars are at or around 6% flat.
If you look at the whole picture (lower rate finance and what the free insurance is actually worth to you) it generally works out slightly cheaper to buy a new car than it does a nearly new.