Finishing PCP early, Half payment advice?

[Seaneylad]

Morning all,

I beleive you can have a PCP car finance car back after paying half?
If that half the value of the car, or half the vavlue you agreed to pay in the term?

Info i have:

Vechile cash price £8,667
Less Advance payment (deposit) £500
Amoung of credit £8,167

Small print (total amount payable (comprising the advance payment,amount of credit, acceptence fee, interest and option to purchase is £9,882)

Monthly repayment £139
Payment term 41 Months
Final Payment £3,757

I took policy out 17/10/2013
Ends 17/02/2017

My current settlement fee to buy the car is coming out at £5,800

Can anyone help or give me some advice ... Trying to work out if i can hand it back or best to run the term? Thanks

[Sarnie]

By my rough workings you can hand the car back in circa 8-9 months??

[Mattt]

Voluntary Termination is the term you are looking for, lots of info around if you Google it

[Seaneylad]

Sarnie said:

By my rough workings you can hand the car back in circa 8-9 months??

Just done some more reading it was saying the 50% cost paid is for the amount i agreeded to borrow.
Which is im looking at this right (probably not )

Car was worth £9,882 and the Final Payment was £3,757
so 9882-3753= 6125

So far i have paid 23 months ... which at 139x23 = 3197

so half 6125/2 = 3062 .. so i have paid just over half?

I could be wrong though

[Seaneylad]

Mattt said:

Voluntary Termination is the term you are looking for, lots of info around if you Google it

Just been looking, trying to work if ive paid over 50% ... as its not clear if its 50% on amount im borrowning not including the lump sum at end (if i chose to purchase)

Just added some calculations to another post, could be wrong if it doesnt work that way

[Jobbo]

Seaneylad said:

Just done some more reading it was saying the 50% cost paid is for the amount i agreeded to borrow.
Which is im looking at this right (probably not )

It's 50% of the total amount payable under the agreement, not 50% of the total borrowed. By my reckoning that's at 35.5 months, or near as dammit 3 years from the start of the agreement.

The agreement should state the exact figure so find the paperwork.

[CRB14]

Your total amount payable is £9,882 (as the original post).

The terms are usually that you need to have paid half of that (being £4,941). To get to that amount you will have to have paid (pretty much) 36 payments of £139.

Might be worth seeing what you can get rid of it for now if you want to change although I'd expect you would need to put towards it to change.

[Sarnie]

Seaneylad said:

Just done some more reading it was saying the 50% cost paid is for the amount i agreeded to borrow.
Which is im looking at this right (probably not )

Car was worth £9,882 and the Final Payment was £3,757
so 9882-3753= 6125

So far i have paid 23 months ... which at 139x23 = 3197

so half 6125/2 = 3062 .. so i have paid just over half?

I could be wrong though

You do not take out the final payment when calculating this, you agreed to pay it, just at the end.............

[valiant]

That's one of the downsides of PCP type finance. When VTing, it is not until near the end of the agreement that VT becomes applicable.

[rehab71]

Just ring the finance company and ask if you can VT, job jobbed!

[Vee]

Seaneylad said:

Just done some more reading it was saying the 50% cost paid is for the amount i agreeded to borrow.
Which is im looking at this right (probably not )

Car was worth £9,882 and the Final Payment was £3,757
so 9882-3753= 6125

So far i have paid 23 months ... which at 139x23 = 3197

so half 6125/2 = 3062 .. so i have paid just over half?

I could be wrong though

I think you are wrong

The total payable is £9,882

You've paid £500 + £139*23 = £3,197

You need to pay another £1,744 (12 months) to VT

[LeoSayer]

I thought all PCPs were structured so that the earliest you can 'hand the car back' is at the end of the PCP period...as Vee says, when you've paid off half the original amount borrowed ie half of £9,888

[Sheepshanks]

LeoSayer said:

I thought all PCPs were structured so that the earliest you can 'hand the car back' is at the end of the PCP period...as Vee says, when you've paid off half the original amount borrowed ie half of £9,888

It's usually just before the end. It's one of the reasons why the car industry pushes PCPs - the VT issue largely disappears. The industry tried hard to get VT abolished altogether on PCPs but the Government refused.

LeoSayer said:

..as Vee says, when you've paid off half the original amount borrowed ie half of £9,888

The number is right but your definition isn't - Vee had it correctly. It's not half of the amount borrowed, it's half of the total amount payable.

[rfoster]

LeoSayer said:

I thought all PCPs were structured so that the earliest you can 'hand the car back' is at the end of the PCP period...as Vee says, when you've paid off half the original amount borrowed ie half of £9,888

Completely variable and dependant on the size of your deposit and size of final balloon. The larger the deposit, the earlier you'll have paid 50% of the remaining payments; and the lower the final balloon, the sooner you'll reach 50% paid.

[Sheepshanks]

rfoster said:

Completely variable and dependant on the size of your deposit and size of final balloon. The larger the deposit, the earlier you'll have paid 50% of the remaining payments; and the lower the final balloon, the sooner you'll reach 50% paid.

When I've looked at these (we have two running at the moment) they won't let you adjust the GFV so all a big deposit does is reduce the monthly payments. And with lower payment it takes a broadly similar length of time to get to halfway.

The VW one we have works out at 32.5 months (on a 36 month deal) and at that point the car should (hopefully) be worth more than the GFV.

I guess where you could benefit (which used to be the main issue with VT on HP) is if you stuck massive mileage on the car - however I've seem forum reports that some manufacturers are pursuing excess mileage charges even under VT.

[PositronicRay]

It'll tell you somewhere in the small print.

[rfoster]

You can adjust the RV down by increasing your annual mileage (prior to the agreement starting) - this will give you more equity at the end of the term. Not common, but it is an option.

[milner993]

like others have said the VT figure will be stated within your agreement if you cant find it call your finance company and ask.