Voluntary Termination - worth it?

[psdtj]

I've had my Punto for the best part of three years now (balloon payment in feb if I want to keep the car)

However, I'm currently looking at VT'ing early. I'm just trying to figure out if I'm going to be paying excess mileage if I do? I've read multiple different answers from different sources and wondered if anyone could shed some light?

I could just be patient but, other than me being incredibly excited to finally buy a Lotus (winter is the best time to buy a rwd car....oh wait), the car already has some scratches which they're going to rinse me on regardless so if I can save on the mileage that'd be top,

[Defcon5]

I take it you have it on PCP?

I didn't think you could VT that, only HP?

[AyBee]

Would help to understand the mileage on it now...are we talking on a pro-rata basis or have you already reached the mileage allowance so you want to terminate to avoid extra charges?

[psdtj]

When I spoke to Fiat Finance they gave me the option

I was contracted 21,000 and am currently high 27,000 miles, so I'm already over by a lovely margin /: what I should have done was amend it when I moved jobs but hindsight is a wonderful thing

[Mercury00]

I don't think you can amend it, can you?

[AyBee]

Can't see them letting you off to be honest - you're 6,000 miles over whether you pay for it now or at the end of your contract. Why would they?

[rfoster]

You'll need to check the wording in your contract - you can certainly VT a PCP agreement in the same manner that you can with a hire purchase so long as you have paid at least 50% of the total amount payable under the agreement. The finance company will have the right to charge you for any pro-rata excess mileage on the vehicle, and also for any damage to car / incomplete service history / illegal tyres etc.

Before you consider VT, have you requested a settlement figure from the finance company with a view to selling the car on? You may even make a small profit.

[AyBee]

rfoster said:

You'll need to check the wording in your contract - you can certainly VT a PCP agreement in the same manner that you can with a hire purchase so long as you have paid at least 50% of the total amount payable under the agreement. The finance company will have the right to charge you for any pro-rata excess mileage on the vehicle, and also for any damage to car / incomplete service history / illegal tyres etc.

Before you consider VT, have you requested a settlement figure from the finance company with a view to selling the car on? You may even make a small profit.

I'd be pissed off if it was pro-rata excess mileage. They want it back with 21k miles so he should pay for 6k miles, not 6k plus whatever mileage he might have done between now and the end of the contract...

[psdtj]

I've just had another read through my contract and the wording does imply paying for all excess mileage at the time of collection of the vehicle; which is fair enough,

I shall ring them later about a settlement figure as that could be a better way

[rfoster]

AyBee said:

I'd be pissed off if it was pro-rata excess mileage. They want it back with 21k miles so he should pay for 6k miles, not 6k plus whatever mileage he might have done between now and the end of the contract...

Why? assuming its 3 years and 21,000 miles, they are expecting a car back at the end of 3 years with 21,000 miles. if he terminates early (say after 2 years) it should have covered 14,000 miles, and therefore he'd be over contractual mileage. Why should the finance company take a pill on the customer covering more mileage than they had agreed to? The value of the vehicle will be lower than it should at this point and the finance company will have to dispose of it for less than they should achieve.

[AyBee]

rfoster said:

AyBee said:

I'd be pissed off if it was pro-rata excess mileage. They want it back with 21k miles so he should pay for 6k miles, not 6k plus whatever mileage he might have done between now and the end of the contract...

Why? assuming its 3 years and 21,000 miles, they are expecting a car back at the end of 3 years with 21,000 miles. if he terminates early (say after 2 years) it should have covered 14,000 miles, and therefore he'd be over contractual mileage. Why should the finance company take a pill on the customer covering more mileage than they had agreed to? The value of the vehicle will be lower than it should at this point and the finance company will have to dispose of it for less than they should achieve.

Did you even read my post - fairly certain that "They want it back with 21k miles so he should pay for 6k miles" is exactly what you've said above.

[Sir Bagalot]

Mercury00 said:

I don't think you can amend it, can you?

What? The contract? Or the mileage?

[rfoster]

AyBee said:

Did you even read my post - fairly certain that "They want it back with 21k miles so he should pay for 6k miles" is exactly what you've said above.

I was looking at the point about pro rata mileage. In fairness without specific details of how far through the term / contracted and actual mileage it's all academic. But either way - there will be a clause in the contract about him paying pro-rata excess mileage if the agreement is voluntarily terminated.

[Gio G]

If the agreement is a PCP and you want to VT, as long as you have made half the payments, you do not pay anything else. That is the contract. Therefore any excess mileage I believe cannot be claimed from you. The grey area for me is the condition of the car when it is handed over, ensuring tyres are safe, no huge dents, no missing service handbook etc..

And before someone asks, no it does not affect your credit rating, however it will suggest on your file that you exercised a VT on the contract, but from a high level- it just looks settled.. These sorts of things are practiced time and again, where someone VT's and then buys a brand new car from the same dealer and same make..

G

[AyBee]

rfoster said:

AyBee said:

Did you even read my post - fairly certain that "They want it back with 21k miles so he should pay for 6k miles" is exactly what you've said above.

I was looking at the point about pro rata mileage. In fairness without specific details of how far through the term / contracted and actual mileage it's all academic. But either way - there will be a clause in the contract about him paying pro-rata excess mileage if the agreement is voluntarily terminated.

What's pro-rata got to do with it? It's simply excess mileage...

[northandy]

AyBee said:

What's pro-rata got to do with it? It's simply excess mileage...

I speak from experience it is pro rated.

So if you were on a 6k a year deal and handed back at end of year 2 of a 4 year deal with say 24k on, the excess miles would be 12k as you only get allowance for the years you hold the agreement.

[Sheepshanks]

Gio G said:

If the agreement is a PCP and you want to VT, as long as you have made half the payments, you do not pay anything else. That is the contract. Therefore any excess mileage I believe cannot be claimed from you. The grey area for me is the condition of the car when it is handed over, ensuring tyres are safe, no huge dents, no missing service handbook etc..

It's not just the contract, it's the law - Consumer Credit Act. Finance companies hate it and tried to get the law changed but got rebuffed.

Condition is a grey area but the Act says the goods must in reasonable condition - that's probably a different definition to the one in the agreement.

The finance company may try and levy charges - refer them to the Act.