When you sign a Guaranteed Future Value (GFV) car loan, the end-of-term decision feels far away. Three or four years later, it arrives — and how you handle it can mean a difference of several thousand dollars.
Option 1: Return the car
You hand the car back to the lender. You owe nothing more (assuming you've met the kilometre and condition requirements). You walk away.
When this makes sense:
- The car is worth less than the GFV on the open market — the lender absorbs the depreciation gap
- You want to upgrade to a new car anyway
- You prefer lower repayments and flexibility over ownership
What to watch out for: Excess kilometres, damage charges, and whether you've kept servicing records. These can all result in costs deducted from your return.
Option 2: Pay the GFV and keep the car
You pay the guaranteed amount (the balloon) and the car is yours outright.
When this makes sense:
- The car is worth more than the GFV on the open market — you're getting equity
- You love the car and want to keep it long-term
- You've kept it in excellent condition with low kilometres
How to pay the GFV: Cash, refinance into a new loan, or use the car's trade-in value at a dealer. Get a market valuation on RedBook.com.au before the term ends — if the car is worth more than the GFV, paying it gives you instant equity.
Option 3: Sell the car privately
If the car's open-market value is above the GFV, you can sell privately, use the proceeds to pay out the balloon, and pocket the difference.
Example:
- GFV: $14,000
- Private sale price: $17,500
- You pocket: $3,500
This takes more effort — you need to coordinate the sale and loan discharge — but it's the highest-return option if the car has held its value well.
How to decide: 3 steps
- Get a market valuation 60–90 days before your term ends. Use RedBook for a data estimate plus one dealer appraisal.
- Check your kilometre count and condition. Calculate any excess charges honestly.
- Compare the total cost of each path.
| Path | Best if... |
|---|---|
| Return | Car worth ≤ GFV, or you want to upgrade |
| Pay GFV and keep | Car worth > GFV, or you want long-term ownership |
| Sell privately | Car worth well above GFV and you're willing to do the work |
The new option: products that reward returning
One frustration with traditional GFV loans is that returning the car feels like you have nothing to show for your repayments. Milam is building a car finance product that gives you a cashback rebate when you return the car — so the return path actually pays you back, not just lets you walk away.
What if returning the car paid you back?
Milam is building GFV-style finance with a cashback rebate at end of term. Join the waitlist.
Join the waitlist