Leaving A PCP Early. Credit Rating Consequences.
Discussion
I was informed my one year old PCPed car had badly corroded and pitted brake discs whilst it was in for its first service.
The manufacturer blamed my driving. They claimed at different times I was braking too hard too often, not braking hard enough, driving too much on mototrways and not using my brakes enough, not driving the car often enough and driving my car in a particularly hostile environment. As such, the warranty would not cover any of the cost of new discs and hit me with a £500+ bill.
I argued that my driving style and environment was pretty much the same as it had been on every car I had owned and run as company vehicles for the past 30 odd years I have been driving none of which had ever suffered corroded disks.
The manufacturer stood firm. I was to bear the cost.
I then threatened to VT the contract at the 1st opportunity. My argument was as my driving style and driving environment was what it was I could reasonably expect the disks to be fecced again in 12 months time and again in 12 months thereafter as the contract ended. This would add an on going cost of £50 a month on top of the PCP payments.
The manufacturer threatened VTing could seriously affect my credit rating. At the time I didn't care and had a mental picture of me running a cash purchased old Chevy Cruze or the likes for the next few years.
This seems at odds with what I'm hearing on various PH threads where renters are VTing willy nilly in order to keep themselves in new cars and claim doing so with impunity.
If I do decide to hand my car back at the point where I can do so legally can anyone tell me whether I'd suffer consequences as far as a reduced credit rating is concerned?
For anyone interested in my outcome the manufacturer relented and gave me new disks and pads parts free. The dealer fitted them at cost (Just over £100). Taking account the wear and tear the average set of brakes an enthuriastically driven small hot hatch suffers I considered this a reasonable settlement. Assuming the new disks aren't fecced by next year's service I shall see my PCP contract through to the end of its 36 month term.
The manufacturer blamed my driving. They claimed at different times I was braking too hard too often, not braking hard enough, driving too much on mototrways and not using my brakes enough, not driving the car often enough and driving my car in a particularly hostile environment. As such, the warranty would not cover any of the cost of new discs and hit me with a £500+ bill.
I argued that my driving style and environment was pretty much the same as it had been on every car I had owned and run as company vehicles for the past 30 odd years I have been driving none of which had ever suffered corroded disks.
The manufacturer stood firm. I was to bear the cost.
I then threatened to VT the contract at the 1st opportunity. My argument was as my driving style and driving environment was what it was I could reasonably expect the disks to be fecced again in 12 months time and again in 12 months thereafter as the contract ended. This would add an on going cost of £50 a month on top of the PCP payments.
The manufacturer threatened VTing could seriously affect my credit rating. At the time I didn't care and had a mental picture of me running a cash purchased old Chevy Cruze or the likes for the next few years.
This seems at odds with what I'm hearing on various PH threads where renters are VTing willy nilly in order to keep themselves in new cars and claim doing so with impunity.
If I do decide to hand my car back at the point where I can do so legally can anyone tell me whether I'd suffer consequences as far as a reduced credit rating is concerned?
For anyone interested in my outcome the manufacturer relented and gave me new disks and pads parts free. The dealer fitted them at cost (Just over £100). Taking account the wear and tear the average set of brakes an enthuriastically driven small hot hatch suffers I considered this a reasonable settlement. Assuming the new disks aren't fecced by next year's service I shall see my PCP contract through to the end of its 36 month term.
Edited by Tannedbaldhead on Saturday 5th May 13:15
When you say the manufacturer I assume you mean the supplying retailer or the finance house ?
VT cannot impact your credit rating, it is a fundamental right under the CCA.
I would ask them for their view in writing and see if they provide it. I suspect they won’t and for what it is worth I would consider reporting them to the FCA is this sounds like deliberate scare tactics to keep the agreement running.
VT cannot impact your credit rating, it is a fundamental right under the CCA.
I would ask them for their view in writing and see if they provide it. I suspect they won’t and for what it is worth I would consider reporting them to the FCA is this sounds like deliberate scare tactics to keep the agreement running.
Brooking10 said:
When you say the manufacturer I assume you mean the supplying retailer or the finance house ?
I initially dealt with the dealer who referred it to the manufacturer to clarify whether corrosion was covered by the warranty. When I referred to the manufacturer it was the manufacturer's view rather than the supplying retailer or finance house.
Tannedbaldhead said:
I was informed my one year old PCPed car had badly corroded and pitted brake discs whilst it was in for its first service.
The manufacturer blamed my driving. They claimed at different times I was braking too hard too often, not braking hard enough, driving too much on mototrways and not using my brakes enough, not driving the car often enough and driving my car in a particularly hostile environment. As such, the warranty would not cover any of the cost of new discs and hit me with a £500+ bill.
I argued that my driving style and environment was pretty much the same as it had been on every car I had owned and run as company vehicles for the past 30 odd years I have been driving none of which had ever suffered corroded disks.
The manufacturer stood firm. I was to bear the cost.
I then threatened to VT the contract at the 1st opportunity. My argument was as my driving style and driving environment was what it was I could reasonably expect the disks to be fecced again in 12 months time and again in 12 months thereafter as the contract ended. This would add an on going cost of £50 a month on top of the PCP payments.
The manufacturer threatened VTing could seriously affect my credit rating. At the time I didn't care and had a mental picture of me running a cash purchased old Chevy Cruze or the likes for the next few years.
This seems at odds with what I'm hearing on various PH threads where renters are VTing willy nilly in order to keep themselves in new cars and claim doing so with impunity.
If I do decide to hand my car back at the point where I can do so legally can anyone tell me whether I'd suffer consequences as far as a reduced credit rating is concerned?
For anyone interested in my outcome the manufacturer relented and gave me new disks and pads parts free. The dealer fitted them at cost (Just over £100). Taking account the wear and tear the average set of brakes an enthuriastically driven small hot hatch suffers I considered this a reasonable settlement. Assuming the new disks aren't fecced by next year's service I shall see my PCP contract through to the end of its 36 month term.
Since PCP finance is the same as HP, you are free to settle the agreement at any time that you wish. The manufacturer blamed my driving. They claimed at different times I was braking too hard too often, not braking hard enough, driving too much on mototrways and not using my brakes enough, not driving the car often enough and driving my car in a particularly hostile environment. As such, the warranty would not cover any of the cost of new discs and hit me with a £500+ bill.
I argued that my driving style and environment was pretty much the same as it had been on every car I had owned and run as company vehicles for the past 30 odd years I have been driving none of which had ever suffered corroded disks.
The manufacturer stood firm. I was to bear the cost.
I then threatened to VT the contract at the 1st opportunity. My argument was as my driving style and driving environment was what it was I could reasonably expect the disks to be fecced again in 12 months time and again in 12 months thereafter as the contract ended. This would add an on going cost of £50 a month on top of the PCP payments.
The manufacturer threatened VTing could seriously affect my credit rating. At the time I didn't care and had a mental picture of me running a cash purchased old Chevy Cruze or the likes for the next few years.
This seems at odds with what I'm hearing on various PH threads where renters are VTing willy nilly in order to keep themselves in new cars and claim doing so with impunity.
If I do decide to hand my car back at the point where I can do so legally can anyone tell me whether I'd suffer consequences as far as a reduced credit rating is concerned?
For anyone interested in my outcome the manufacturer relented and gave me new disks and pads parts free. The dealer fitted them at cost (Just over £100). Taking account the wear and tear the average set of brakes an enthuriastically driven small hot hatch suffers I considered this a reasonable settlement. Assuming the new disks aren't fecced by next year's service I shall see my PCP contract through to the end of its 36 month term.
On the other hand, if you want to VT the agreement, then I believe you will have to have paid at least 50% of the total agreement amount, which on a 1 year old PCP is probably still a way off, I presume.
Mandat said:
Since PCP finance is the same as HP, you are free to settle the agreement at any time that you wish.
On the other hand, if you want to VT the agreement, then I believe you will have to have paid at least 50% of the total agreement amount, which on a 1 year old PCP is probably still a way off, I presume.
Just realised that as a low deposit PCP and with 50 odd percent of the value of the car being the balloon payment that means I'd have to take the contract pretty much to term. In my head I was thinking it could be handed back half way through the term of the contract ie. 18 months into a 36 month payment schedule. On the other hand, if you want to VT the agreement, then I believe you will have to have paid at least 50% of the total agreement amount, which on a 1 year old PCP is probably still a way off, I presume.
I like the car and fortunately Peugeot handled the situation to my satisfaction so my intention is to keep it.
Hopefully there was an unusual set of circumstances leading to the disk corrosion issue.
Tannedbaldhead said:
Just realised that as a low deposit PCP and with 50 odd percent of the value of the car being the balloon payment that means I'd have to take the contract pretty much to term. In my head I was thinking it could be handed back half way through the term of the contract ie. 18 months into a 36 month payment schedule.
There's a guy on one of the Mercedes forums who is an economist and he got caught by that. Circumstances changed and he assumed he could hand the car back at 18mths and found he couldn't.Manufacturers like PCPs because the VT point can be pushed to near the end of the agreement, if not beyond it.
A one year old car shouldn't need new discs after 8000 miles. It's a joke that they even put up any argument.
Most of the PCP deals I've seen the VT point comes very late. It is 50% of the total repayable.
Don't Peugeot set the GFV low? I don't imagine you'll run as late, but it won't be near halfway.
You're legally allowed to VT. The finance company can't ruin your credit rating, but they might decline you future finance.
I've read other people going through the VT process two or three times and still getting finance from the same manufacturer.
Most of the PCP deals I've seen the VT point comes very late. It is 50% of the total repayable.
Don't Peugeot set the GFV low? I don't imagine you'll run as late, but it won't be near halfway.
You're legally allowed to VT. The finance company can't ruin your credit rating, but they might decline you future finance.
I've read other people going through the VT process two or three times and still getting finance from the same manufacturer.
Sheepshanks said:
Tannedbaldhead said:
Just realised that as a low deposit PCP and with 50 odd percent of the value of the car being the balloon payment that means I'd have to take the contract pretty much to term. In my head I was thinking it could be handed back half way through the term of the contract ie. 18 months into a 36 month payment schedule.
There's a guy on one of the Mercedes forums who is an economist and he got caught by that. Circumstances changed and he assumed he could hand the car back at 18mths and found he couldn't.Manufacturers like PCPs because the VT point can be pushed to near the end of the agreement, if not beyond it.
If the total amount due was for example £30000 and therefore the customer would have had to pay £15000 when he VT'd it, wouldn't the manufacturer ( or finance company ) prefer to have the car back at 2 years rather than 3 years since its disposal value will be more.
Agreements where the GFV is > 50% of the total payable of course mean that the agreement can't be VT'd. But such a high GFV increases the likelihood of the car of the car being returned at the end of the agreement ( a loss upon disposal for the finance company ) and cause the monthly payments to be artificially low ( a benefit for the customer ).
Who is getting caught out here exactly?
Wooda80 said:
But such a high GFV increases the likelihood of the car of the car being returned at the end of the agreement...
PCPs are designed to keep car factories churning out cars. They want customers to return them - the scheme fails if people keep their cars.Appreciate the point about getting it back early might help them sell it on, but they'd rather you saw it through to the end and paid all the interest they were expecting.
I’m sure they’d be delighted in the example you gave but it’s not usual to have paid half at 2 yrs, and it’d be bonkers to put money in to hand the car back unless circumstances forced you to.
Edited by Sheepshanks on Sunday 6th May 08:12
Talk to the finance company as you're co-owners with them.
I'm currently going through a dispute with Alfa Romeo and have ended up having to take the issue up with the finance provider as Alfa are claiming there is no fault with the car, contrary to all the evidence.
They are there to remain impartial and will take both parties arguments into account before making a decision. If they find Peugeot to be in breach of contract (could be possible seeing as normally discs don't need replacing in this time) then they can force action.
I'm currently going through a dispute with Alfa Romeo and have ended up having to take the issue up with the finance provider as Alfa are claiming there is no fault with the car, contrary to all the evidence.
They are there to remain impartial and will take both parties arguments into account before making a decision. If they find Peugeot to be in breach of contract (could be possible seeing as normally discs don't need replacing in this time) then they can force action.
What the finance company do, at their discretion, is put a marker on your file saying that you have VTd the agreement, which stays on your file for 7 years.
This is nothing more that a note on your file specific to that finance agreement, so relies on a) someone actually bothering to read it, and b) it being part of the decision criteria.
In reality, it makes next to no difference but as others have said some finance companies may not want your business if you have a history of VT. I VTd my BMW last year and they did indeed put a note on my file, it just says “agreement cleared by VT”. They have offered me another PCP deal so as said it really makes no odds.
It does not affect your credit rating in any way.
This is nothing more that a note on your file specific to that finance agreement, so relies on a) someone actually bothering to read it, and b) it being part of the decision criteria.
In reality, it makes next to no difference but as others have said some finance companies may not want your business if you have a history of VT. I VTd my BMW last year and they did indeed put a note on my file, it just says “agreement cleared by VT”. They have offered me another PCP deal so as said it really makes no odds.
It does not affect your credit rating in any way.
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