PCP misselling.

[kiethton]

Fast Bug said:

kiethton said:

Still very useful if you've done 30k a year on your leased 320d SE instead of the 10k a year you signed up to!

You can just give the car back without paying the excess mileage at ~10p per mile, £6k in this instance...

A lease isn't a PCP!

If you 'handed' back a lease car early, they'd charge you a percentage (if not all) of the repayments owed along with a bill for excess mileage

Sorry wrong term on my point, I was meaning a PCP, one in the same IMO although one has a little higher flexibility to do the above

[Ean218]

kiethton said:

Sorry wrong term on my point, I was meaning a PCP, one in the same IMO although one has a little higher flexibility to do the above

If people on here discussing it can get so easily confused heaven help people who don't really have an interest.

I consider myself fairly bright, but I have never understood the perceived advantages of either PCPs or contract hire and so either borrow the money as a straight loan or go down the barge route.

Unfortunately I also failed to see why I needed to buy insurance on top of any loans I took out so have also completely missed out on the PPI circus.

[del mar]

It will end up in more laws to protect the stupid from themselves.

[Soov330e]

a said:

kiethton said:

Still very useful if you've done 30k a year on your leased 320d SE instead of the 10k a year you signed up to!

You can just give the car back without paying the excess mileage at ~10p per mile, £6k in this instance...

Surely they'd still charge you the excess mileage??

They can't.

There is no legal entitlement to claim this from you if you Voluntarily Terminate.

They'll try, but they can't.

[a]

Ean218 said:

I consider myself fairly bright, but I have never understood the perceived advantages of either PCPs or contract hire and so either borrow the money as a straight loan or go down the barge route.

The advantage for the two PCPs I've had were massive manufacturer deposit contributions for using their PCP scheme - on top of an already haggled down price. In one case, the interest was too high so I took out a loan an paid off the PCP after getting the contribution. In the other case it was already low so I left it.

And I recently took out a PCH as the deal was really good. In the 2 years/20k miles I have the car, I'll pay £6,400 for while it depreciates by £9,000.

I tend to have awful luck with used cars, even sensible ones. My last car was a low mileage and apparently excellent condition Mondeo I bought for £7,000 but cost me £2,600 to keep running over the 7 months I had it. And I sold it with several issues unresolved (like rust from a poor body repair).

Sometimes PCH/PCP deals can make sense...

[Stupot123]

Soov330e said:

They can't.

There is no legal entitlement to claim this from you if you Voluntarily Terminate.

They'll try, but they can't.

In theory they can bill you for the mileage annually, so if you vt they can work it out pro rata and bill you for most of it. Whether they do or not and whether you can shout your way out of it is another story, but they technically can.

[bobclayton]

In my younger days I used to work for what is I would say the UK's Biggest Car Supermarket...but I'll get to the "point"...

Over 1500 cars are sold over the phone there, with a quick e-signiature required at collection - payments are confirmed over the phone, Business Manager signs everything off and takes finance proposal over the phone.

I guess I'm saying it would be very easy for information to be misinterpreted or miscommunication by the salesman...

With regards to PCP's in particular, it's scary how many people believe that the GMFV at the end of the agreement is what they genuinely believe they're about to be given back for thier next deposit... i.e. returning customers having put down £7k deposits first time round, car has GMFV of say £11k, and expecting that back...always an awkward phone call!

[mike74]

I'm sure the feckless debt junkies will get some form of relief or compo, as per usual.

[Soov330e]

Stupot123 said:

Soov330e said:

They can't.

There is no legal entitlement to claim this from you if you Voluntarily Terminate.

They'll try, but they can't.

In theory they can bill you for the mileage annually, so if you vt they can work it out pro rata and bill you for most of it. Whether they do or not and whether you can shout your way out of it is another story, but they technically can.

They can bill you, but you don't have to pay it.

[tankplanker]

We triggered VT on the wife's Mini last year, very painless process even though the car was slightly over agreed mileage and had a few parking dings/a scuffed wheel (which we did not pay for). The trade in value was approx £2.5k lower than the final payment even though it was 9 months earlier than when the final payment was due, so we'd have likely been well over £3k behind the final payment if we had waited till the end.

Granted we had paid a large deposit on the Mini so we reached the 50% threshold way earlier than most, but I would still look at the numbers for VT even if it can only be triggered for a particular agreement late in the deal.

I am surprised that VT is supported in law as it actually protects the consumer. I know Mini took a bath over our Mini as it wasn't sold till this year and they didn't bother listing it as stock until February, when we handed back the car end of August the previous year.

[Sheepshanks]

Soov330e said:

They can bill you, but you don't have to pay it.

VW FS is demanding people pay now, and quoting a bit of the CCA in validation. They used to just let it go.

I reckon if they took someone to small claims court they'd probably win as the decisions there are often based more on common sense. Of course it could be challenged at a higher court - but who would want to take them on?

[Sheepshanks]

tankplanker said:

I am surprised that VT is supported in law as it actually protects the consumer.

The whole point of the supporting law is to protect consumers - the clue is in the law's name!

The idea of that section was to stop being given poor HP deals that ended up with them owing far more than the item was worth. The retail car industry has campaigned to have the term removed and it's one of the reasons why they favour PCP - most deals can't be VT'd until very near the end.

[Soov330e]

When you terminate the agreement, you do exactly that. It no longer exists.

You do not have to pay any excess mileage charges.

Your liability under the terms of the VT is governed exclusively by Statute - i.e. the Consumer Credit Act. Their terms and conditions are not relevant after termination, because errrrrrrrrrrrrrrrrrrrr they have been terminated.

The Consumer Credit Act is very clear, in that when you VT, you pay anything owing at the date of the termination (i.e. arrears) plus any such further sum as is required to bring the total amount paid up to one half of the total purchase price.

So if there are no arrears and you have already paid one half, then you have nothing further to pay.


That's trite Law. I terminated my 535d and am being chased for £1100. I won't be paying. They can shout all they like, but they won't go to Court, because the CCA is a Statute, and therefore trumps any Terms and Conditions, which in any even once you've VT'd are no longer in effect.

Edited by Soov330e on Tuesday 23 May 11:00

[tankplanker]

Sheepshanks said:

The whole point of the supporting law is to protect consumers - the clue is in the law's name!

The idea of that section was to stop being given poor HP deals that ended up with them owing far more than the item was worth. The retail car industry has campaigned to have the term removed and it's one of the reasons why they favour PCP - most deals can't be VT'd until very near the end.

I know that , just surprised it actually made it into law and hasn't been lobbied out of existence yet.

[Soov330e]

tankplanker said:

Sheepshanks said:

The whole point of the supporting law is to protect consumers - the clue is in the law's name!

The idea of that section was to stop being given poor HP deals that ended up with them owing far more than the item was worth. The retail car industry has campaigned to have the term removed and it's one of the reasons why they favour PCP - most deals can't be VT'd until very near the end.

I know that , just surprised it actually made it into law and hasn't been lobbied out of existence yet.

The industry is trying very hard.

[Ginge R]

bobclayton said:

With regards to PCP's in particular, it's scary how many people believe that the GMFV at the end of the agreement is what they genuinely believe they're about to be given back for thier next deposit... i.e. returning customers having put down £7k deposits first time round, car has GMFV of say £11k, and expecting that back...always an awkward phone call!

This is one reason behind my opening post. Niece is bright, felt flushed and rushed, and was told that the value was 'practically' (best recollection, admittedly) guaranteed, and that there should be some equity for the next car. She has some unattributable, pencilled jottings on the brochure which show the principle, and which don't suggest negative equity in any of the scribbled scenarios. I'm no apologist for shirking personal responsibility, but I do know my niece - she's a thorough, diligent professional.

She has also got a useful email chain from the dealer which she can take to FOS or elsewhere, and which goes back some years. Before PCP, the dialogue was different, the engagement consultative, forthcoming and transparent (after all, HP is HP). Although there is nothing positively untruthful about the discussions once a PCP was suggested, neither did the saleswoman take the opportunity of correcting some rather obvious wrong perceptions from my niece, or clarifying the risks. The affordability discussion was non existent, which I know is remiss. So, it's fair to say the sales process wasn't conducted particularly well.

So, my niece is, I suppose, a typical consumer. Thoughtful, well intentioned, trusting, relatively scant grasp of the salient points but at the end of the day, reliant on the dealer because she is inexperienced in these matters. She is not unconscionable, and she would never misrepresent her position for unlawful financial gain.

I asked the question because her residuals aren't looking particularly rosy and I'm trying to avert some heartache next year which will coincide with her fixed rate mortgage deal expiring. If the industry is aware that a storm might be looming, is there merit in her (ok, Uncle Al) having a man to man chat with the Principal about it? And if the contract is now half way through - is the consensus then, that at that point, she has options if she elects to voluntarily terminate and can safely ignore letters? I'll take a formal steer too, but I just wanted to establish some facts of my own first.

[Soov330e]

Ginge R said:

bobclayton said:

With regards to PCP's in particular, it's scary how many people believe that the GMFV at the end of the agreement is what they genuinely believe they're about to be given back for thier next deposit... i.e. returning customers having put down £7k deposits first time round, car has GMFV of say £11k, and expecting that back...always an awkward phone call!

This is one reason behind my opening post. Niece is bright, felt flushed and rushed, and was told that the value was 'practically' (best recollection, admittedly) guaranteed, and that there should be some equity for the next car. She has some unattributable, pencilled jottings on the brochure which show the principle, and which don't suggest negative equity in any of the scribbled scenarios. I'm no apologist for shirking personal responsibility, but I do know my niece - she's a thorough, diligent professional.

She has also got a useful email chain from the dealer which she can take to FOS or elsewhere, and which goes back some years. Before PCP, the dialogue was different, the engagement consultative, forthcoming and transparent (after all, HP is HP). Although there is nothing positively untruthful about the discussions once a PCP was suggested, neither did the saleswoman take the opportunity of correcting some rather obvious wrong perceptions from my niece, or clarifying the risks. The affordability discussion was non existent, which I know is remiss. So, it's fair to say the sales process wasn't conducted particularly well.

So, my niece is, I suppose, a typical consumer. Thoughtful, well intentioned, trusting, relatively scant grasp of the salient points but at the end of the day, reliant on the dealer because she is inexperienced in these matters. She is not unconscionable, and she would never misrepresent her position for unlawful financial gain.

I asked the question because her residuals aren't looking particularly rosy and I'm trying to avert some heartache next year which will coincide with her fixed rate mortgage deal expiring. If the industry is aware that a storm might be looming, is there merit in her (ok, Uncle Al) having a man to man chat with the Principal about it? And if the contract is now half way through - is the consensus then, that at that point, she has options if she elects to voluntarily terminate and can safely ignore letters? I'll take a formal steer too, but I just wanted to establish some facts of my own first.

Well the position at Law is as I said.

You do not have to pay for excess mileage.


Damage as a result of failing to take "reasonable care of the goods" you do.

[Ginge R]

Thanks. I haven't asked about the condition of the car, but I suspect the mileage is going to drift over what was agreed. Which begs another question. If you can't be penalised for breaching mileage agreements, why doesn't everyone just ask for a quote on minimal miles? The dealer could quote a low revised 'gmfv' based on the miles of course, but why wouldn't everyone vt at their earliest PCP option point in order to mitigate the loss, pro rata?

Just a thought. Thanks for your reply.

[liner33]

Ginge R said:

This is one reason behind my opening post. Niece is bright, felt flushed and rushed, and was told that the value was 'practically' (best recollection, admittedly) guaranteed, and that there should be some equity for the next car. She has some unattributable, pencilled jottings on the brochure which show the principle, and which don't suggest negative equity in any of the scribbled scenarios. I'm no apologist for shirking personal responsibility, but I do know my niece - she's a thorough, diligent professional.

She has also got a useful email chain from the dealer which she can take to FOS or elsewhere, and which goes back some years. Before PCP, the dialogue was different, the engagement consultative, forthcoming and transparent (after all, HP is HP). Although there is nothing positively untruthful about the discussions once a PCP was suggested, neither did the saleswoman take the opportunity of correcting some rather obvious wrong perceptions from my niece, or clarifying the risks. The affordability discussion was non existent, which I know is remiss. So, it's fair to say the sales process wasn't conducted particularly well.

So, my niece is, I suppose, a typical consumer. Thoughtful, well intentioned, trusting, relatively scant grasp of the salient points but at the end of the day, reliant on the dealer because she is inexperienced in these matters. She is not unconscionable, and she would never misrepresent her position for unlawful financial gain.

I asked the question because her residuals aren't looking particularly rosy and I'm trying to avert some heartache next year which will coincide with her fixed rate mortgage deal expiring. If the industry is aware that a storm might be looming, is there merit in her (ok, Uncle Al) having a man to man chat with the Principal about it? And if the contract is now half way through - is the consensus then, that at that point, she has options if she elects to voluntarily terminate and can safely ignore letters? I'll take a formal steer too, but I just wanted to establish some facts of my own first.

The beauty of pcp is that the customer wont be in negative equity, that's the manufacturers problem, there may not be any equity in the car of course but that was never guaranteed

[Ginge R]

Agree - it wasn't guaranteed as such.

Liberal and lazy use of the word 'guaranteed', and projections which seem to exclude the possibility of a further financial payment don't help though. I'll tread cautiously and carefully.