PCP finance & contract mileage question?
Discussion
Also bear in mind that often, if you go a specified percentage over your agreed mileage (on my C1 I think it was 30%), the additional mileage pence per mile may increase dramatically from the normal rate. I'd gone well over on mine and with the raised PPM I would have had to pay around £2000 for the mileage alone, had I not kept the car.
rfoster said:
your PCP agreement will have an excess mileage charge shown somewhere. This is only of significance if the finance company take possession of the car, either at the end of the term, or if you voluntarily terminate during the agreement.
No.They cant enforce the excess mileage charge if you VT. It would be contrary to your rights under the Consumer Credit Act whereby once you have paid 50% of the total transaction cost, you can return the car with nothing further to pay.
On which part of the Consumer Credit Act are you relying?
Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
My alternate understanding would be that you have a contract with the finance company with a stipulation for a specific mileage.
If you exceed the agreed mileage, you have breached the contract.
The additional PPM charges are as a result of liquidated damages from your breach. This would be unaffected by your rights under CCA, as far as I can see.
If you exceed the agreed mileage, you have breached the contract.
The additional PPM charges are as a result of liquidated damages from your breach. This would be unaffected by your rights under CCA, as far as I can see.
Sorry for a thread hijack,
but I have a similar query but going the other way.
My girlfriend has a PCP car which she is going to sell back at the end of the deal as she doesnt really like the car or the service she has received from them.
However, she has done 50% less miles than the anticipated rate, due to a change in jobs.
What should she do about this, and/or will they offer more etc?
Sorry for sounding dumb, just never done PCP myself and know nil about it!
Cheers
but I have a similar query but going the other way.
My girlfriend has a PCP car which she is going to sell back at the end of the deal as she doesnt really like the car or the service she has received from them.
However, she has done 50% less miles than the anticipated rate, due to a change in jobs.
What should she do about this, and/or will they offer more etc?
Sorry for sounding dumb, just never done PCP myself and know nil about it!
Cheers
10 Pence Short said:
On which part of the Consumer Credit Act are you relying?
Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
I'm not "relying" on any particular part of it - its a statement of fact.Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
http://www.legalbeagles.info/forums/showthread.php...
You legally have "nothing more to pay" providing you have taken "reasonable care" of the car. This is generally accepted to be approx 12,000 mile per year and as usually defined by the British Vehicle Rental and Leasing Association, here -
http://www.bvrla.co.uk/service/fair-wear-and-tear-...
10 Pence Short said:
On which part of the Consumer Credit Act are you relying?
Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
I'm wondering the same.Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
If true I'm surprised all businesses / high milers don't take take 24 months PCP deals at 5k a year. Run 50k a year and VT at month 23?
daemon said:
10 Pence Short said:
On which part of the Consumer Credit Act are you relying?
Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
I'm not "relying" on any particular part of it - its a statement of fact.Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
http://www.legalbeagles.info/forums/showthread.php...
You legally have "nothing more to pay" providing you have taken "reasonable care" of the car. This is generally accepted to be approx 12,000 mile per year and as usually defined by the British Vehicle Rental and Leasing Association, here -
http://www.bvrla.co.uk/service/fair-wear-and-tear-...
I would also draw your attention to s.99(2) of the Consumer Credit Act 1974, which tells us:
CCA 1974 said:
(2)Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.
Exceeding the mileage agreed in the contract may invoke liquidated damages clauses within it and therefore give rise to liabilities prior to termination.As always, it will be dependent on the wording of any given contract.
daemon said:
No.
They cant enforce the excess mileage charge if you VT. It would be contrary to your rights under the Consumer Credit Act whereby once you have paid 50% of the total transaction cost, you can return the car with nothing further to pay.
Hi daemon - it certainly seems open to interpretation but the finance company do have the right to charge excess mileage if you terminate early - the finance company have had to calculate the final balloon based on the estimated mileage provided to them by the customer. They cant enforce the excess mileage charge if you VT. It would be contrary to your rights under the Consumer Credit Act whereby once you have paid 50% of the total transaction cost, you can return the car with nothing further to pay.
This isn't the case on a lease purchase agreement however, where there's a final balloon payable that's not linked to a specific mileage.
Planter said:
Sorry for a thread hijack,
but I have a similar query but going the other way.
My girlfriend has a PCP car which she is going to sell back at the end of the deal as she doesnt really like the car or the service she has received from them.
However, she has done 50% less miles than the anticipated rate, due to a change in jobs.
What should she do about this, and/or will they offer more etc?
Sorry for sounding dumb, just never done PCP myself and know nil about it!
Cheers
Your girlfriend may find that she can sell the car to a trader for more than the final balloon payment at the end of the term - if so then she'll get out of the agreement with a bit of equity. If you just hand it back to the finance company then you wouldn't generally get any rebate.but I have a similar query but going the other way.
My girlfriend has a PCP car which she is going to sell back at the end of the deal as she doesnt really like the car or the service she has received from them.
However, she has done 50% less miles than the anticipated rate, due to a change in jobs.
What should she do about this, and/or will they offer more etc?
Sorry for sounding dumb, just never done PCP myself and know nil about it!
Cheers
10 Pence Short said:
daemon said:
10 Pence Short said:
On which part of the Consumer Credit Act are you relying?
Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
I'm not "relying" on any particular part of it - its a statement of fact.Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
http://www.legalbeagles.info/forums/showthread.php...
You legally have "nothing more to pay" providing you have taken "reasonable care" of the car. This is generally accepted to be approx 12,000 mile per year and as usually defined by the British Vehicle Rental and Leasing Association, here -
http://www.bvrla.co.uk/service/fair-wear-and-tear-...
I would also draw your attention to s.99(2) of the Consumer Credit Act 1974, which tells us:
CCA 1974 said:
(2)Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.
Exceeding the mileage agreed in the contract may invoke liquidated damages clauses within it and therefore give rise to liabilities prior to termination.As always, it will be dependent on the wording of any given contract.
rfoster said:
daemon said:
No.
They cant enforce the excess mileage charge if you VT. It would be contrary to your rights under the Consumer Credit Act whereby once you have paid 50% of the total transaction cost, you can return the car with nothing further to pay.
Hi daemon - it certainly seems open to interpretation but the finance company do have the right to charge excess mileage if you terminate early - the finance company have had to calculate the final balloon based on the estimated mileage provided to them by the customer. They cant enforce the excess mileage charge if you VT. It would be contrary to your rights under the Consumer Credit Act whereby once you have paid 50% of the total transaction cost, you can return the car with nothing further to pay.
This isn't the case on a lease purchase agreement however, where there's a final balloon payable that's not linked to a specific mileage.
Thats a legal right. Then can ASK you for it, but they cant enforce this.
Finance Companies HATE this clause. They are lobbying to have it removed.
10 Pence Short said:
My alternate understanding would be that you have a contract with the finance company with a stipulation for a specific mileage.
If you exceed the agreed mileage, you have breached the contract.
The additional PPM charges are as a result of liquidated damages from your breach. This would be unaffected by your rights under CCA, as far as I can see.
"Nothing further to pay".If you exceed the agreed mileage, you have breached the contract.
The additional PPM charges are as a result of liquidated damages from your breach. This would be unaffected by your rights under CCA, as far as I can see.
They cant enforce it. You have the right to Voluntary Terminate at ANY time, however after you have paid 50% you have nothing further to pay.
rfoster said:
Planter said:
Sorry for a thread hijack,
but I have a similar query but going the other way.
My girlfriend has a PCP car which she is going to sell back at the end of the deal as she doesnt really like the car or the service she has received from them.
However, she has done 50% less miles than the anticipated rate, due to a change in jobs.
What should she do about this, and/or will they offer more etc?
Sorry for sounding dumb, just never done PCP myself and know nil about it!
Cheers
Your girlfriend may find that she can sell the car to a trader for more than the final balloon payment at the end of the term - if so then she'll get out of the agreement with a bit of equity. If you just hand it back to the finance company then you wouldn't generally get any rebate.but I have a similar query but going the other way.
My girlfriend has a PCP car which she is going to sell back at the end of the deal as she doesnt really like the car or the service she has received from them.
However, she has done 50% less miles than the anticipated rate, due to a change in jobs.
What should she do about this, and/or will they offer more etc?
Sorry for sounding dumb, just never done PCP myself and know nil about it!
Cheers
jon- said:
10 Pence Short said:
On which part of the Consumer Credit Act are you relying?
Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
I'm wondering the same.Taken at face value, the result of your reasoning would be that you could drive as many miles as you like in the car and, as long as you terminate before the end of the contract (ie. you could do it one month before the last payment is due 35 months into a 36 month agreement), you cannot be held liable for mileage charges.
That would make the whole point of the PPC being mileage limited (and therefore based on a GFV) commercially pointless.
If true I'm surprised all businesses / high milers don't take take 24 months PCP deals at 5k a year. Run 50k a year and VT at month 23?
50K miles a year will cause more than "fair wear and tear".
rfoster said:
daemon said:
No.
They cant enforce the excess mileage charge if you VT. It would be contrary to your rights under the Consumer Credit Act whereby once you have paid 50% of the total transaction cost, you can return the car with nothing further to pay.
Hi daemon - it certainly seems open to interpretation but the finance company do have the right to charge excess mileage if you terminate early - the finance company have had to calculate the final balloon based on the estimated mileage provided to them by the customer. They cant enforce the excess mileage charge if you VT. It would be contrary to your rights under the Consumer Credit Act whereby once you have paid 50% of the total transaction cost, you can return the car with nothing further to pay.
chrispmartha said:
Im hoping to VT on my wife's horrific abomination of a car (citroen C3) it's slow, rubbish build quality and utterly dreary (last time I let her pick a car :-)
Anyway, do I take it that if we do this it won't affect her credit rating?
No it shouldn't do however I have known lenders refuse to lend on a HP basis if you have terminated a contracted with them in the past. Anyway, do I take it that if we do this it won't affect her credit rating?
waterwonder said:
chrispmartha said:
Im hoping to VT on my wife's horrific abomination of a car (citroen C3) it's slow, rubbish build quality and utterly dreary (last time I let her pick a car :-)
Anyway, do I take it that if we do this it won't affect her credit rating?
No it shouldn't do however I have known lenders refuse to lend on a HP basis if you have terminated a contracted with them in the past. Anyway, do I take it that if we do this it won't affect her credit rating?
However, it may be an indicator that you may do it again, and therefore some finance companies may decline to do business with you - most wont care though
daemon said:
No. They dont. A VT states under the Consumer Credit Act that once you have paid 50% you have nothing further to pay, subject to keeping the goods in acceptable condition.
Thats a legal right. Then can ASK you for it, but they cant enforce this.
Finance Companies HATE this clause. They are lobbying to have it removed.
These are taken directly from an Alphera Financial Services PCP agreement.Thats a legal right. Then can ASK you for it, but they cant enforce this.
Finance Companies HATE this clause. They are lobbying to have it removed.
Excess mileage charges
If you end this agreement early (see termination): The maximum total mileage will apply pro-rata to the reduced period of hire ad your obligation to pay the excess mileage charge will accrue accordingly immediately prior to termination; if the vehicle's mileage exceeds the maximum total mileage calculated pro rata, you will therefore have to pay the excess mileage charge for each mile covered in excess of the relevant maximum total mileage.
Termination
You can terminate this agreement at any time before your final repayment falls by giving us written notice. You will have to return the vehicle and pay (i) any arrears and any other sums which have become payable under the agreement before termination (including any excess mileage charge), plus (ii)the amount (if any) by which one-half of the total amount payable exceeds the aggregate of the advance payment and repayments you have paid, plus (iii) if you do not return the vehicle in good repair and condition, the sum required to compensate us for this. This will be your maximum liability if you comply with these requirements.
Not wanting to get into a bun fight over this issue, whether a customer can argue with the finance company and win is another matter altogether. But the above is regulated by the consumer act, you'd expect that it's been checked thoroughly to ensure it complies!
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