PCP Voluntary Early Termination

[DK1083]

I am aware that a PCP can be cancelled and the vehicle returned, (Voluntary Early Termination), once 50% of the total "loan" has been repaid.
Interested to know if anyone has taken the option of Voluntary Early Termination of their PCP agreement and whether or not the finance company made it difficult or if any other problems were encountered?

 

[mystreet]

Did our MG ZS in December 23. The finance company kept pushing for us to surrender it as we would have to pay the outstanding debt. I pushed back and then everything was sorted out OK for me to VT it.
Outstanding £15000, sold at auction for £9000

 

[crispyjay]

I am aware that a PCP can be cancelled and the vehicle returned, (Voluntary Early Termination), once 50% of the total "loan" has been repaid.
Interested to know if anyone has taken the option of Voluntary Early Termination of their PCP agreement and whether or not the finance company made it difficult or if any other problems were encountered?

I did it many years ago with my Alfa - couldn’t wait to get rid. It’s part of the legal agreement so they have to let you do it. It’s the one time enforcing contractual terms can be useful.

Only problem was finance company trying to claim for scratches after they drove it away. Their own paperwork they left with me said no damage…. which a very polite letter pointed out to them and I suggested they asked their driver instead.

 

[Dino]

My Excite got collected last week after I opted for VT. The assessment by the company who picked it up was 2 scuffed alloys and one scratch that had been touched up with paint, total cost estimated at £148. Now waiting for the final price from the finance company. Will update when I get it

 

[admiralross2400]

Got to be careful - I wanted to do this and turns out Santander call their finance PCP, but it's actually not quite - it's an unsecured loan instead so no VT option. I didn't notice this at the time. There's been quite a few complaints about this to the Ombudsman but they've stopped finding in favour of the person because, to be fair, they put it in big letters halfway through the agreement (which I just missed at the time). Oh well. Only got a few months left. Still negative equity though - value currently around £12k and I've got £13.5k outstanding.

 

[DK1083]

Got to be careful - I wanted to do this and turns out Santander call their finance PCP, but it's actually not quite - it's an unsecured loan instead so no VT option. I didn't notice this at the time. There's been quite a few complaints about this to the Ombudsman but they've stopped finding in favour of the person because, to be fair, they put it in big letters halfway through the agreement (which I just missed at the time). Oh well. Only got a few months left. Still negative equity though - value currently around £12k and I've got £13.5k outstanding.

Mine is a PCP with a finance company which was arranged through the MG dealership I bought the car from. Still got £18k outstanding so a long way off VT. Not sure when I might be eligible for a change of vehicle though?

 

[admiralross2400]

Mine is a PCP with a finance company which was arranged through the MG dealership I bought the car from. Still got £18k outstanding so a long way off VT. Not sure when I might be eligible for a change of vehicle though?

Mine was done through the MG Dealership too which was why I didn't really pay too much attention. They said it was PCP so I assumed it was PCP. In theory, I can fight it on that basis, but the dealership has since closed and I can't be bothered for the sake for a few months (I also got it on 0% so less reason to care)

 

[Aitch1]

I am aware that a PCP can be cancelled and the vehicle returned, (Voluntary Early Termination), once 50% of the total "loan" has been repaid.
Interested to know if anyone has taken the option of Voluntary Early Termination of their PCP agreement and whether or not the finance company made it difficult or if any other problems were encountered?

I have 'bought' my last three cars on PCP and ended the contract early on each one with no hassle. In fact, in each case my outstanding loan was less than the amount I sold, or part exed , for. I've found the break even point in a 48 month contract is around 30 months and, up to now, I've always made a profit. My last car was a Hyundai, with Hyundai finance. They gave me a settlement figure in May last year. I then part-exed it for my MG3 in August. By then the finance company re-assessed my settlement figure and raised it, so I finished up with about £2k in profit. I've never had any disputes with any of these companies and always been treated very fairly.

 

[DK1083]

I have 'bought' my last three cars on PCP and ended the contract early on each one with no hassle. In fact, in each case my outstanding loan was less than the amount I sold, or part exed , for. I've found the break even point in a 48 month contract is around 30 months and, up to now, I've always made a profit. My last car was a Hyundai, with Hyundai finance. They gave me a settlement figure in May last year. I then part-exed it for my MG3 in August. By then the finance company re-assessed my settlement figure and raised it, so I finished up with about £2k in profit. I've never had any disputes with any of these companies and always been treated very fairly.

Thanks for this. Are you saying that you paid off your settlement figure so the car was then yours to do with as you wanted?
Unfortunately, for various reasons the car doesn’t really suit us and my wife won’t drive it unless it’s absolutely necessary so I’m considering taking the option of handing the car back and walking away.

 

[siteguru]

Your "loan value" includes the final "balloon payment"; that's what you're paying interest on too. I'd be surprised if the 50% point was reached as early as 30 months in a 48 month term.

But @Aitch1 obviously has personal experience.

 

[Aitch1]

Thanks for this. Are you saying that you paid off your settlement figure so the car was then yours to do with as you wanted?
Unfortunately, for various reasons the car doesn’t really suit us and my wife won’t drive it unless it’s absolutely necessary so I’m considering taking the option of handing the car back and walking away.

Yes, on each occasion the value of the car was more than the settlement figure. On my last two cars, including the MG3, I traded in my car and the garage arranged all the sales and paid off the finance. In my experience you get a better trade-in value than you would selling to 'Motorway' or 'We Buy Any Car', although I nearly slipped up with a six years old Yaris. Just before the final deal, I was offered a grand more than the car salesman was offering, so I took it. I don't think the salesman was too impressed at my change of heart.

 

[Aitch1]

Thanks for this. Are you saying that you paid off your settlement figure so the car was then yours to do with as you wanted?
Unfortunately, for various reasons the car doesn’t really suit us and my wife won’t drive it unless it’s absolutely necessary so I’m considering taking the option of handing the car back and walking away.

Re handing the car back..ask for a settlement figure then have a scout round to see what offers you get, especially if you're thinking of buying new again, see what part ex is offered. H

 

[DK1083]

Yes, on each occasion the value of the car was more than the settlement figure. On my last two cars, including the MG3, I traded in my car and the garage arranged all the sales and paid off the finance. In my experience you get a better trade-in value than you would selling to 'Motorway' or 'We Buy Any Car', although I nearly slipped up with a six years old Yaris. Just before the final deal, I was offered a grand more than the car salesman was offering, so I took it. I don't think the salesman was too impressed at my change of heart.

From what I can see the balloon payment required for my PFL Exclusive at the end of my PCP in 2.5 years time is about the same as they’re selling for now on the 2nd hand market so I’m not holding much hope of decent part ex deal…

 

[Aitch1]

What you pay in 2.5 years has no bearing on what you pay now. It's all to do with the second hand car market. H

 

[Dino]

Got a letter today confirming that the VT process is complete and I have no further liabilities. Was an easy process, just took a long time to get to the 50% mark.
Bought my FL SE outright and don’t think I will be going down the PCP route again

 

[DK1083]

Got a letter today confirming that the VT process is complete and I have no further liabilities. Was an easy process, just took a long time to get to the 50% mark.
Bought my FL SE outright and don’t think I will be going down the PCP route again

I called in a the dealership I bought the car from today.
They advised that at 30 months my settlement figure was just over £16k and that the value of my Exclusive with 13k miles was around £11k. Therefore, nothing I can do at the moment.
He did advise that taking the VT option before the end of the contract might affect my credit rating! Joy!

 

[siteguru]

It shouldn't ... following a legally-allowed process shouldn't impact on creditability/creditworthiness. But then again, there's no such thing as a universal credit rating (or "score" as some companies like to call it); each credit provider makes their own assessment based on what's noted on your credit file(s) as recorded by the various credit agencies.

 

[Dino]

I was quoted a bit over £13k as a settlement figure on my 71 plate excite. I wanted to upgrade to the FL SE while I could still get one with £11k off the list price, so VT was the best option as my SR Excite was valued way below the settlement figure (even though it had less than 13,000miles on the clock).
VT shouldn’t affect your credit rating as you’ve kept to the T&C of the credit agreement

 

[DK1083]

I was quoted a bit over £13k as a settlement figure on my 71 plate excite. I wanted to upgrade to the FL SE while I could still get one with £11k off the list price, so VT was the best option as my SR Excite was valued way below the settlement figure (even though it had less than 13,000miles on the clock).
VT shouldn’t affect your credit rating as you’ve kept to the T&C of the credit agreement

So, to be clear… You handed the car back and walked away? Did you then start a new PCP for the new car?

 

[Dino]

So, to be clear… You handed the car back and walked away? Did you then start a new PCP for the new car?

I handed the car back and walked away. Took out a loan to buy the new MG5 SE.
The loan rates were better than the PCP option and the car is mine