Self termination - PCP
Discussion
Has anyone self terminated before on a PCP deal and handed their car back? I’m curious as to how much detail the finance companies go into checking the condition of your car as mine has a few issues to take care of. Would I be best getting a scratch repaired before handing it back and replacing a couple of tyres or not bothering? How much am I likely to be stung if I leave them??
By self terminating are you doing voluntary termination (VT) after paying off 50% of the full value of the agreement?
Fair wear and tear does apply, but being VT you should not be liable for anything else.
Lease car BVRLA guidelines don't apply as they're for lease cars and more strict.
You only need to satisfy the requirements of VT under the consumer regs. Your legal rights and the requirements of the law trump any games the finance company might try to play, especially in recovering any fair wear and tear, excess miles etc.
Make them come pick the car up, you should not drop it off. Also don't sign any forms they might send out or sign anything the person picking up asks you to sign. All you need to do is notify them of the VT and the cancellation date by writing.
If they mess you around then you cancel the tax and insurance on the final date of the agreement and tell them you'll be doing this, then change ownership on said day online at the DVLA to them. It's then their responsibility after that and they should hurry up and grab it.
There's plenty of reading online and Legal Beagle is a good site.
Fair wear and tear does apply, but being VT you should not be liable for anything else.
Lease car BVRLA guidelines don't apply as they're for lease cars and more strict.
You only need to satisfy the requirements of VT under the consumer regs. Your legal rights and the requirements of the law trump any games the finance company might try to play, especially in recovering any fair wear and tear, excess miles etc.
Make them come pick the car up, you should not drop it off. Also don't sign any forms they might send out or sign anything the person picking up asks you to sign. All you need to do is notify them of the VT and the cancellation date by writing.
If they mess you around then you cancel the tax and insurance on the final date of the agreement and tell them you'll be doing this, then change ownership on said day online at the DVLA to them. It's then their responsibility after that and they should hurry up and grab it.
There's plenty of reading online and Legal Beagle is a good site.
Edited by -Ad- on Monday 7th June 06:32
Surely it’s pretty rare you are eligible to VT a PCP? Aren’t the payments and balloon usually structured so that you’ll actually not reach the payment threshold before the final payment is due?
You then need to hand it back instead of paying the final payment, at which point the BVRLA guidelines very much do become relevant.
You then need to hand it back instead of paying the final payment, at which point the BVRLA guidelines very much do become relevant.
-Ad- You are correct, it’s a VT that I am doing. My PCP deal was over 48 months and my monthly repayments take me to 50% through the finance after 34 months of payments. When I called the finance company they suggested I needed to pay £125 collection fee for them to collect the vehicle, or I could drop it off at one of their designated sites. Does this sound right??
Toaster Pilot said:
Surely it’s pretty rare you are eligible to VT a PCP? Aren’t the payments and balloon usually structured so that you’ll actually not reach the payment threshold before the final payment is due?
You then need to hand it back instead of paying the final payment, at which point the BVRLA guidelines very much do become relevant.
It's easy to reach the 50% mark with a PCP agreement, especially if you have a larger deposit or monthly payment.You then need to hand it back instead of paying the final payment, at which point the BVRLA guidelines very much do become relevant.
BVRLA isn't relevant to a PCP agreement, the letter 'L' in their name stands for leasing and applies to leased vehicles, whereas there are consumer regulations/rights that apply to a PCP/HP contact and trump anything written up by the finance company.
StealthGreyST said:
-Ad- You are correct, it’s a VT that I am doing. My PCP deal was over 48 months and my monthly repayments take me to 50% through the finance after 34 months of payments. When I called the finance company they suggested I needed to pay £125 collection fee for them to collect the vehicle, or I could drop it off at one of their designated sites. Does this sound right??
Ok good, so have you paid the 50% total amount now?There is no need requirement pay a fee, that's them trying to recoup extra money as they lose out financially on a VT. All you have to do is notifiy them in writing that you've paid the 50% amount and want to VT the car Essentially that's you then completed your side of the contact according to the regulations and need to do no more other than let them come pick it up.
They will want to send out documents for you to sign, there's nothing in the regulations saying this is a requirment, so what they are doing is essentially creating a new contract, telling you to sign it, to try and charge you for pickup and new T&Cs regarding wear and tear and damage.
Here's an extract from the below link giving this advice:
................
Do I need to fill in a ‘Voluntary Termination pack’?
No. You don’t have to sign any forms or other documentation that the finance company sends you.
Simply send them your letter (email is acceptable, but recorded delivery is better) and stick to your guns. Do not fill out any “Voluntary Termination packs” they send you, even if they insist that you have to. You don’t – it’s a trap to get you to sign away your legal rights.
As soon as you formally notify the finance company that you are terminating the agreement, it is considered terminated and there is no need for you to complete any other paperwork
.........................
https://www.thecarexpert.co.uk/car-finance-volunta...
Here is a link to the Legal Beagle forum post with all the info you need. Use the alternative dropbox link for the pdf.
https://legalbeagles.info/forums/forum/legal-forum...
There's a load of template letters at the end of the pdf that will help you get started. I've done this with VWFS (Audi). They tried to mention additional documents but quickly relented on that once I quoted the regulations back to them. The collections driver tried to point out some dings and scuffs on the wheels and asked me to sign his ipad (essentially an admission and agreement of the charges) but I just said there's no need to sign as I've completed my end of the contract, here are both keys, service history is on the NAV system, bye bye for now
Ensure you take loads of pictures or interior, exterior, accessories in the car and pics of the service history entries on the NAV system. Keep copies of invoices from the services you had done also.
Edited by -Ad- on Monday 7th June 09:22
StealthGreyST said:
Has anyone self terminated before on a PCP deal and handed their car back? I’m curious as to how much detail the finance companies go into checking the condition of your car as mine has a few issues to take care of. Would I be best getting a scratch repaired before handing it back and replacing a couple of tyres or not bothering? How much am I likely to be stung if I leave them??
I VT'd and my car was due to be sent to manheim auctions (on behalf of FCA automotive financing) they send through the generic BVRLA fair wear and tear booklet and not much else. Manheim auctions did all the inspection with no involvement with anyone from Fiat. They weren't super thorough, just followed the guide really, I was able to get away with 3-4 pretty bad stone chips to the paint and a graze on the rear bumper which wasn't very noticeable. The mirror in my wing mirror fell off during his look around of the car as the guy was an ardent door slammer, but he didn't seem to care and just pushed it back on.They tried to get me to pay extra because I didn't have printed evidence of the MOT, but I could argue against this since manheims guidance PDF didn't state that I needed it, the charge for that was £10. My wheels had several paint scratches (not curbing) around the center of the hub which always puzzled me how they got there, but they didn't pick up on that.
-Ad- I’m due to be halfway through after August’s payment but I’m contemplating paying a lump sum to finish it early. In your experience, once the car has been picked up are the finance companies relatively quick in finalising the contract? I need to arrange a loan and purchase of two new cars and don’t want to be carless for too long
Toaster Pilot said:
Surely it’s pretty rare you are eligible to VT a PCP? Aren’t the payments and balloon usually structured so that you’ll actually not reach the payment threshold before the final payment is due?
You then need to hand it back instead of paying the final payment, at which point the BVRLA guidelines very much do become relevant.
Its not rare but does depend on your deposit and monthly as stated above.You then need to hand it back instead of paying the final payment, at which point the BVRLA guidelines very much do become relevant.
We hit VT on month 39 out of a 48 month agreement with a 10% deposit and 2.9% APR deal.
OP - I would check your PCP contract as it should state the VT point clearly (ours does) so you know the figure. If you are above this in terms of repayments and you still want to VT, you have to pay the difference so if the VT is say £13k and you have £14k left to pay, its gonna cost you a grand to get out of it.
Unless it needs work (tyres, brakes etc) or the MOT is due, I would just pay the final few payments and have the car if you do need to spend money to get out of the PCP.
StealthGreyST said:
-Ad- I’m due to be halfway through after August’s payment but I’m contemplating paying a lump sum to finish it early. In your experience, once the car has been picked up are the finance companies relatively quick in finalising the contract? I need to arrange a loan and purchase of two new cars and don’t want to be carless for too long
As Wagonwheels has said, it can benefit to pay up to the 50% if your're a month or 2 short and want to get rid, or have say a large expensive service coming up.Also, the contract is complete once you've payed the 50% and have notified them by letter than you're exercising your right to VT the car. That is the end of the contract. You can then do a change of owenr (V5) online on the DVLA, changing it back to the name of the finance company and tell them the insurance and tax are being cancelled on day 'X', then it's their responsibility to come collect it, if anything happens to the car after that period then it's their problem. Also if they become a bit funny at this, a letter stating you're going to start charging storage at '£x' per day should give them the hurry up
If they want to chase you for anything after then you can use those templates in the Legal Beagle to tell them to essentially '**** OFF!'.
The most important thing is that on your credit file then aggreement is listed as 'settled', ideally they send a letter through saying the same
We had those listed but Audi still tried to come after us for some marks and dings. Template letters were sent, they ignored everything and kept demanding money was owned, then eventually they stopped replying and sold the hassle to a debt company. This company was then told to politely '**** OFF' also, and no information was given over to them. Haven't heard anything for years now.
Edited by -Ad- on Monday 7th June 13:26
un1eash said:
Have you checked your settlement figure against current trade price, webuyanycar/motorway prices are very high right now. I'm 30 months into my 48 month PCP (£1k deposit 0%) and currently £3.5k in positive equity.
This is a good point - trade prices are stupid right now! Aparrently there’s a shortage of good quality used cars. Gassing Station | Car Buying | Top of Page | What's New | My Stuff