Shortfall on PCP (Mother)
Discussion
Hi guys,
I'm probably being stupid and missing something obvious here, but my mum's trying to VT a 36-month PCP with Merc Finance on her GLA.
Merc are telling her there's a 1700 quid shortfall. She is 32 months through the 36 month term. I was under the impression once you were over 50% of total amount due then there was no shortfall to pay - have I got the wrong end of the stick?
I don't have a copy of the original agreement but I can try and get it, she emailed me this last night.
I'm probably being stupid and missing something obvious here, but my mum's trying to VT a 36-month PCP with Merc Finance on her GLA.
Merc are telling her there's a 1700 quid shortfall. She is 32 months through the 36 month term. I was under the impression once you were over 50% of total amount due then there was no shortfall to pay - have I got the wrong end of the stick?
I don't have a copy of the original agreement but I can try and get it, she emailed me this last night.
king for it!Hang on, is that "total due" the total due to be at 50%, of which she's paid about 90%, or the balance remaining to own the car outright?
If the latter, then rounding off, if she's paid £17,200, and there's £18,900 outstanding, that's a total of £36,100.
Half of which is £18,050.
So surely her shortfall to having paid 50% is £850?
If the latter, then rounding off, if she's paid £17,200, and there's £18,900 outstanding, that's a total of £36,100.
Half of which is £18,050.
So surely her shortfall to having paid 50% is £850?
timbo999 said:
Might as well keep it until the end of the agreement as it'll cost you less?
Its quite disingenuous of MB to set the agreement out such that you can't pay 50% of the agreement during the term... is this the case in all PCPs?
They aim for that precisely to stop people VTing.Its quite disingenuous of MB to set the agreement out such that you can't pay 50% of the agreement during the term... is this the case in all PCPs?
Final value on that deal must be huge, especially as there was a £6K deposit. In some ways this is good as it keeps the monthly payments down, but I've seen multiple complaints on MB forums from people who want to keep their cars but feel like they've been scammed as it's worth less than the GFV. I think this why GFV has stopped being used and it's generally called Optional Final Payment now.
It's a bit stupid that it would cost more to hand it back than keep it for the last 4 months, but the GFV isn't guaranteed until the end of the deal. I presume the car has been valued at far less than the GFV?
InitialDave said:
Hang on, is that "total due" the total due to be at 50%, of which she's paid about 90%, or the balance remaining to own the car outright?
If the latter, then rounding off, if she's paid £17,200, and there's £18,900 outstanding, that's a total of £36,100.
Half of which is £18,050.
So surely her shortfall to having paid 50% is £850?
I think the £18,900 is the threshold for 50%.If the latter, then rounding off, if she's paid £17,200, and there's £18,900 outstanding, that's a total of £36,100.
Half of which is £18,050.
So surely her shortfall to having paid 50% is £850?
timbo999 said:
Might as well keep it until the end of the agreement as it'll cost you less?
Its quite disingenuous of MB to set the agreement out such that you can't pay 50% of the agreement during the term... is this the case in all PCPs?
Why is it?Its quite disingenuous of MB to set the agreement out such that you can't pay 50% of the agreement during the term... is this the case in all PCPs?
They're under no obligation to make it easy for you to VT and you're signing up to paying deposit + 36 monthly payments. Why would they make it easy for you to short circuit that agreement?
timbo999 said:
Might as well keep it until the end of the agreement as it'll cost you less?
Its quite disingenuous of MB to set the agreement out such that you can't pay 50% of the agreement during the term... is this the case in all PCPs?
I can't see why it's disingenuous either.Its quite disingenuous of MB to set the agreement out such that you can't pay 50% of the agreement during the term... is this the case in all PCPs?
The only ways to "engineer" the OP's particular agreement so that the 50% point occurs earlier in the term is either:
a) pay a larger deposit, or
b) have a lower GFV / Optional Final Payment ( which will of course increase your monthly payment )
Which would you prefer?
Edited by Wooda80 on Tuesday 10th July 15:14
timbo999 said:
How about reducing the likely extortionate interest rate? I'm guessing you work in the industry...
To me this agreement is the very epitome of disingenuous...
5.9% APR seems to be their standard offering. Usually with some sort of cash incentive thrown in so not unreasonable.To me this agreement is the very epitome of disingenuous...
Explain why again that Mercedes would voluntarily put themselves in a position whereby someone can VT on a whim early and walk away?
MB have clearly 'engineered' (your word not mine) this agreement such that one of the legally required exits from the agreement is not available. I find that to be underhand to be honest (I bet its not explained to the customer prior to signature...). But we'll have to agree to differ.
timbo999 said:
MB have clearly 'engineered' (your word not mine) this agreement such that one of the legally required exits from the agreement is not available. I find that to be underhand to be honest (I bet its not explained to the customer prior to signature...). But we'll have to agree to differ.
I didnt use the word "engineered". The point of Voluntary Termination is to allow people to walk away from a HP agreement with nothing further to pay and was introduced because unscrupulous finance companies were pursuing people who couldnt afford to continue to pay for disproportionate amounts of money.
That right has not changed and what it means in terms of a PCP agreement is that chances are the manufacturer is only able to pursue you for a few more payments to hit that 50% marker (and often the 50% marker is reached several months in advance of the contractual end anyway), NOT for say a disproportionate amount because they have sold the car cheaply through action OR that they expect you to pay the full balance due or a similar silly amount.
However, the vast bulk of people who do a VT now do so because they "fancy a change" or because they never planned to keep the car for the full term they signed up to.
It IS explained to the customer before purchase as its in the agreement they sign and i think by law they have to point out your termination rights.
Edited by Deep Thought on Wednesday 11th July 21:01
Edited by Deep Thought on Wednesday 11th July 21:20
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