PCP again, is my thinking correct on this?

[Gas1883]

I’ve taken a pcp out with a 36 month agreement , I intended to vt / change the vechicle at 24 months , so I was going to pay a lump sum equivalent of 12 monthly payments , 12 month lump sum + 24 monthly payments = 36 months , finished .
But reading the paper work it saying the lump sum will reduce the monthly payment , not the term of the agreement , so I’m going to have to I believe pay the lump sum at the 24 months payment , if I pay it earlier , 18 months , theyl lower the monthly payment so at 24 months I will not have reached the 50% required to vt .
It will also have to be one lump sum , not various overpayment ?
Does that sound right , to vt at 24 months I will have to pay a lump sum equivalent of 12 months , Not before 24 months
Thankyou

[BenS94]

Keep the lump sum to one side in a savngs account, then draw it out to change at your desired time.

[Mandat]

Gas1883 said:

I’ve taken a pcp out with a 36 month agreement , I intended to vt / change the vechicle at 24 months , so I was going to pay a lump sum equivalent of 12 monthly payments , 12 month lump sum + 24 monthly payments = 36 months , finished .
But reading the paper work it saying the lump sum will reduce the monthly payment , not the term of the agreement , so I’m going to have to I believe pay the lump sum at the 24 months payment , if I pay it earlier , 18 months , theyl lower the monthly payment so at 24 months I will not have reached the 50% required to vt .
It will also have to be one lump sum , not various overpayment ?
Does that sound right , to vt at 24 months I will have to pay a lump sum equivalent of 12 months , Not before 24 months
Thankyou

Why do you plan to VT instead of selling the car or part-exchanging it at 24 months?

It sounds like a 24 month lease might be a better option for you rather than PCP.

[66HFM]

Why did you take it on a 36 month agreement when you intended to p/ex it at 24 months, why not a 24 months PCP?
I may be missing something...

[SpamDisco]

You can VT once you've paid 50% of the total car value plus interest and fees, ie £30k car, £6k interest/fees= £36k, you need to pay £18k before VT.

[chrisch77]

66HFM said:

Why did you take it on a 36 month agreement when you intended to p/ex it at 24 months, why not a 24 months PCP?
I may be missing something...

VT is something you consider because circumstances have changed and you need to get out of the agreement early. Planning to do it from the start certainly suggests a PCP is the wrong product for the OP. I guess the hope here from the OP is that (a) the balloon payment is higher than the car will be worth, so less than the true depreciation is factored into the PCP loan amount, and (b) third year depreciation is lower than first 2 years so when the loan is amortised over 3 years the monthlies are lower than if taking a 2 year agreement. If the value of the car turns out to be higher at the end of 3 years then the OP will loose out on any residual value/deposit by the early VT.

[66HFM]

chrisch77 said:

VT is something you consider because circumstances have changed and you need to get out of the agreement early. Planning to do it from the start certainly suggests a PCP is the wrong product for the OP. I guess the hope here from the OP is that (a) the balloon payment is higher than the car will be worth, so less than the true depreciation is factored into the PCP loan amount, and (b) third year depreciation is lower than first 2 years so when the loan is amortised over 3 years the monthlies are lower than if taking a 2 year agreement. If the value of the car turns out to be higher at the end of 3 years then the OP will loose out on any residual value/deposit by the early VT.

Thanks for the explanation, I was just confused if that was always the intention from the start...definitely seems the wrong product / approach