Please help an idiot (me) VT'ing on PCP
Discussion
Hi
I'm new to the site so, hopefully, I'm abiding by the rules and posting in the right place (I did check!) (Also, I've posted something v similar on Legal Beagles).
I'm in the process of VT'ing my car which I bought on PCP. I used the template I found on Legal Beagles and the finance company have come back with the following:
1) I owe them £3.6k, as there's a shortfall. I'm rubbish with numbers, so don't totally understand why, if I'm honest, but I doubt they're wrong about that. I'm only 29 months into a 48 month deal. I've paid £15.8k to date, plus a £3.6k deposit. They say the total amount due at this time is £22.5k. The car's list price was c.£43k, I "paid" c. £34k on a PCP deal. I pay £547 pcm and have paid £19.5k to date. Am I right in thinking that they're after 50% (for VT'ing) of the list price, because that's how they calculate the depreciation? Got to admit I just didn't understand that - I thought I was over half way of the £34k. I could buy the car off them and try to sell privately, but I can't imagine I'd save anything right now (who's buying?!) I have to get out of the deal now because we're over budget on a house build and the credit commitment is impacting our mortgage borrowing potential. Appreciate, I'd be better off keeping the car for another six months, then VT'ing - that's just not an option.
2) They've sent me the following to sign and I don't think I should:
[quote]
What happens next?
If you wish to terminate your agreement early, you will need to:
1. Complete the fields on the attached form, confirming that you would like to terminate your agreement and where you would like your vehicle to be collected from.
Return the signed sheet to us either by email to XXX with the subject as 'Voluntary Termination', or alternatively you can send it via post using the pre-paid envelope enclosed.
Please note that on sending us confirmation you would like to Voluntary Terminate your agreement with us, you must have your vehicle ready for collection, it is your responsibility to insure the vehicle up to the point of collection. British Car Auctions (BCA) will contact you within 5 working days of the agreement termination, to arrange a suitable collection date.
If you are not ready to return the vehicle immediately, you may wish to delay returning this document until you are in a position to terminate the contract and release the vehicle.
2. Pay the shortfall outlined earlier to bring your total payment to half of the total amount payable. Please note we can only accept payment for the shortfall upon termination of your agreement.
How do I arrange collection of my vehicle?
1. Once we receive your signed confirmation sheet, XXX will contact you to arrange a convenient collection
time.
2. If you need to change the date of the vehicle collection you must call our Agents at XXXXXXX at least two working days before the previously agreed collection date. Please note that
if you request to change your collection date less than two working days before your preagreed collection date, there will be a cancellation charge. To find out what this amount will be, please call the number above.
3. An Inspection Agent will review your vehicle at your home or work address and record the mileage before it leaves your premises. The Inspection Agent will explain any damage charges that are outside the return standards. Should you exceed your contractual mileage, you may be charged following your inspection.
4. Your vehicle will then be taken to our inspection centre for a more detailed review by an engineer, which may result in further charges. To help you prepare for the hand back of your vehicle, we have included a checklist for you to consider. We would recommend that you read through this prior to your collection.
Voluntary termination - confirmation
Please ensure:
. that you complete and return this page to us either by email to customerservices-mbfs@daimler.com with the subject as 'Voluntary Termination', or alternatively you can send it via post using the pre-paid envelope enclosed.
Termination of your agreement
To terminate your agreement under the 50% rule, please sign below.
I understand that by voluntary terminating my agreement, my credit file will be updated to reflect this and other lenders can view this information. I agree to stop using the vehicle with immediate effect as
Mercedes-Benz Financial Services has withdrawn its consent. I also understand that my vehicle needs to be ready for collection when BCA contact me to arrange collection within five working days of
termination. I understand I am responsible for insuring the vehicle up to the point of collection. I also understand that I will be liable for any damage or pro-rata excess mileage charges after inspection of the
vehicle.
Print name: :
Signature: Date:
Collection arrangements
Our collection agents at BCA will contact you to arrange a convenient time to collect your vehicle.
Please provide details of the address that your vehicle should be collected from, a contact name and a daytime telephone number to arrange collection.
Address:
Contact name and telephone number:
[/quote]
A couple of questions spring to mind and I'd welcome anyone's thoughts...
- I'm assuming that I should refuse to sign the above and just confirm the collection address/date to their agents? Is this a 'VT pack'? I'd already told them I wasn't going to sign one.
- I'm not keen on point 4. My understanding is that I don't need to/shouldn't agree to this, by signing the above. Is that right? I'll be taking LOTS of pics the morning of collection.
- The car has 'diamond cut' wheels, each of which has scuffs, very few of which are deep. Would this fall under 'normal wear and tear', or will I have to cough up for these?
- If they do find any damage, will the fact that I'm under my mileage allowance help offset this - in terms of depreciation? I'm allowed 20k pa and I've done 43k in 29 months. Or should I just not refer to this as it's implicitly confirming there is damage which has impacted its value? Am I better sticking to the 'normal wear-and-tear' argument for everything?
- Any other tips before / during collection, so I don't get taken for (even more of) a ride, would be gratefully received.
Sorry for the long post and loads of questions. I'd be very grateful for any help. Going to buy outright with a loan next time.
I'm new to the site so, hopefully, I'm abiding by the rules and posting in the right place (I did check!) (Also, I've posted something v similar on Legal Beagles).
I'm in the process of VT'ing my car which I bought on PCP. I used the template I found on Legal Beagles and the finance company have come back with the following:
1) I owe them £3.6k, as there's a shortfall. I'm rubbish with numbers, so don't totally understand why, if I'm honest, but I doubt they're wrong about that. I'm only 29 months into a 48 month deal. I've paid £15.8k to date, plus a £3.6k deposit. They say the total amount due at this time is £22.5k. The car's list price was c.£43k, I "paid" c. £34k on a PCP deal. I pay £547 pcm and have paid £19.5k to date. Am I right in thinking that they're after 50% (for VT'ing) of the list price, because that's how they calculate the depreciation? Got to admit I just didn't understand that - I thought I was over half way of the £34k. I could buy the car off them and try to sell privately, but I can't imagine I'd save anything right now (who's buying?!) I have to get out of the deal now because we're over budget on a house build and the credit commitment is impacting our mortgage borrowing potential. Appreciate, I'd be better off keeping the car for another six months, then VT'ing - that's just not an option.
2) They've sent me the following to sign and I don't think I should:
[quote]
What happens next?
If you wish to terminate your agreement early, you will need to:
1. Complete the fields on the attached form, confirming that you would like to terminate your agreement and where you would like your vehicle to be collected from.
Return the signed sheet to us either by email to XXX with the subject as 'Voluntary Termination', or alternatively you can send it via post using the pre-paid envelope enclosed.
Please note that on sending us confirmation you would like to Voluntary Terminate your agreement with us, you must have your vehicle ready for collection, it is your responsibility to insure the vehicle up to the point of collection. British Car Auctions (BCA) will contact you within 5 working days of the agreement termination, to arrange a suitable collection date.
If you are not ready to return the vehicle immediately, you may wish to delay returning this document until you are in a position to terminate the contract and release the vehicle.
2. Pay the shortfall outlined earlier to bring your total payment to half of the total amount payable. Please note we can only accept payment for the shortfall upon termination of your agreement.
How do I arrange collection of my vehicle?
1. Once we receive your signed confirmation sheet, XXX will contact you to arrange a convenient collection
time.
2. If you need to change the date of the vehicle collection you must call our Agents at XXXXXXX at least two working days before the previously agreed collection date. Please note that
if you request to change your collection date less than two working days before your preagreed collection date, there will be a cancellation charge. To find out what this amount will be, please call the number above.
3. An Inspection Agent will review your vehicle at your home or work address and record the mileage before it leaves your premises. The Inspection Agent will explain any damage charges that are outside the return standards. Should you exceed your contractual mileage, you may be charged following your inspection.
4. Your vehicle will then be taken to our inspection centre for a more detailed review by an engineer, which may result in further charges. To help you prepare for the hand back of your vehicle, we have included a checklist for you to consider. We would recommend that you read through this prior to your collection.
Voluntary termination - confirmation
Please ensure:
. that you complete and return this page to us either by email to customerservices-mbfs@daimler.com with the subject as 'Voluntary Termination', or alternatively you can send it via post using the pre-paid envelope enclosed.
Termination of your agreement
To terminate your agreement under the 50% rule, please sign below.
I understand that by voluntary terminating my agreement, my credit file will be updated to reflect this and other lenders can view this information. I agree to stop using the vehicle with immediate effect as
Mercedes-Benz Financial Services has withdrawn its consent. I also understand that my vehicle needs to be ready for collection when BCA contact me to arrange collection within five working days of
termination. I understand I am responsible for insuring the vehicle up to the point of collection. I also understand that I will be liable for any damage or pro-rata excess mileage charges after inspection of the
vehicle.
Print name: :
Signature: Date:
Collection arrangements
Our collection agents at BCA will contact you to arrange a convenient time to collect your vehicle.
Please provide details of the address that your vehicle should be collected from, a contact name and a daytime telephone number to arrange collection.
Address:
Contact name and telephone number:
[/quote]
A couple of questions spring to mind and I'd welcome anyone's thoughts...
- I'm assuming that I should refuse to sign the above and just confirm the collection address/date to their agents? Is this a 'VT pack'? I'd already told them I wasn't going to sign one.
- I'm not keen on point 4. My understanding is that I don't need to/shouldn't agree to this, by signing the above. Is that right? I'll be taking LOTS of pics the morning of collection.
- The car has 'diamond cut' wheels, each of which has scuffs, very few of which are deep. Would this fall under 'normal wear and tear', or will I have to cough up for these?
- If they do find any damage, will the fact that I'm under my mileage allowance help offset this - in terms of depreciation? I'm allowed 20k pa and I've done 43k in 29 months. Or should I just not refer to this as it's implicitly confirming there is damage which has impacted its value? Am I better sticking to the 'normal wear-and-tear' argument for everything?
- Any other tips before / during collection, so I don't get taken for (even more of) a ride, would be gratefully received.
Sorry for the long post and loads of questions. I'd be very grateful for any help. Going to buy outright with a loan next time.
Don’t sign anything.
You haven’t paid back 50% of the total amount owed which to my understanding is the VT point, you haven’t actually met the VT point yet hence why they are asking you to pay them the shortfall.
Definitely check your paperwork very carefully to avoid any bills from MB and I would just say keep lookIng into the process of voluntary termination so that you fully understand what you need to do to satisfy the caveats.
I did look into it once but I am not sure about the damage element so make sure you are 100% in the know on that.
I would say that PCP “deals” can be quite a burden however they are a very good if you fancy keeping your monthly costs slightly lower but I know now to do even more research than I thought was actually required! Check, check and check again!
HTH.
You haven’t paid back 50% of the total amount owed which to my understanding is the VT point, you haven’t actually met the VT point yet hence why they are asking you to pay them the shortfall.
Definitely check your paperwork very carefully to avoid any bills from MB and I would just say keep lookIng into the process of voluntary termination so that you fully understand what you need to do to satisfy the caveats.
I did look into it once but I am not sure about the damage element so make sure you are 100% in the know on that.
I would say that PCP “deals” can be quite a burden however they are a very good if you fancy keeping your monthly costs slightly lower but I know now to do even more research than I thought was actually required! Check, check and check again!
HTH.
When a finance company calculates the 50% they include your optional final payment in their calculations.
You won't receive any reductions for the damage on your vehicle because you're under your mileage allowance.
You would be mad to pay out of your agreement, you would be better keeping the vehicle.
I suspect you will need to budget another few hundred for any damages on top of your VT payment.
I would contact your local MB dealership to see if they will buy the vehicle from you, I'm sure you will be in negative equity still but stock isn't freely available at the moment and if your negative equity is less than yourVT payment you're quids in.
You won't receive any reductions for the damage on your vehicle because you're under your mileage allowance.
You would be mad to pay out of your agreement, you would be better keeping the vehicle.
I suspect you will need to budget another few hundred for any damages on top of your VT payment.
I would contact your local MB dealership to see if they will buy the vehicle from you, I'm sure you will be in negative equity still but stock isn't freely available at the moment and if your negative equity is less than yourVT payment you're quids in.
AudiMan9000 said:
timbo999 said:
So (and I'm guessing) he gets a £9k 'manufacturers contribution' but has to pay back half that in order to VT the car... wow, I never knew that and I suspect a lot of people don't.
Surely if they’ve contributed it, it’s already been paid?timbo999 said:
The contribution is included in the amount of the agreement (as its part of the deposit), so he has to pay half of it in order to VT... as I read it.
Too many variables without answer, such as interest rate, GMFV, manufacturers contribution, list to buy price. My guess - op isnt taking interest into consideration in calculating the VT point.ToastMan76 said:
Too many variables without answer, such as interest rate, GMFV, manufacturers contribution, list to buy price. My guess - op isnt taking interest into consideration in calculating the VT point.
Agreed... as someone else pointed out the 'missing' £9k could be the balloon payment.timbo999 said:
So (and I'm guessing) he gets a £9k 'manufacturers contribution' but has to pay back half that in order to VT the car... wow, I never knew that and I suspect a lot of people don't.
No you don't have to pay half of it back, a deposit contribution just reduces the financed amount figure. The only figure that the OP needs to worry about is the "total amount payable" figure, once 50% of that figure has been paid then the car can be VT'd, both the "total amount payable" figure and the VT figure will be on the agreement that the OP signed.
HTP99 said:
No you don't have to pay half of it back, a deposit contribution just reduces the financed amount figure.
The only figure that the OP needs to worry about is the "total amount payable" figure, once 50% of that figure has been paid then the car can be VT'd, both the "total amount payable" figure and the VT figure will be on the agreement that the OP signed.
If you say so... but it isn't clear from the OP's original post... so what constitutes the difference between £45k (i.e. twice the £22.5 he's being asked for) and the £34k he thought he had borrowed? Its either the contribution or final payment?The only figure that the OP needs to worry about is the "total amount payable" figure, once 50% of that figure has been paid then the car can be VT'd, both the "total amount payable" figure and the VT figure will be on the agreement that the OP signed.
timbo999 said:
HTP99 said:
No you don't have to pay half of it back, a deposit contribution just reduces the financed amount figure.
The only figure that the OP needs to worry about is the "total amount payable" figure, once 50% of that figure has been paid then the car can be VT'd, both the "total amount payable" figure and the VT figure will be on the agreement that the OP signed.
If you say so... but it isn't clear from the OP's original post... so what constitutes the difference between £45k (i.e. twice the £22.5 he's being asked for) and the £34k he thought he had borrowed? Its either the contribution or final payment?The only figure that the OP needs to worry about is the "total amount payable" figure, once 50% of that figure has been paid then the car can be VT'd, both the "total amount payable" figure and the VT figure will be on the agreement that the OP signed.
charltjr said:
Interest, probably lots and lots of interest. If it’s a used car the OP is fairly likely to be tucked up at a nasty APR, but unless they come back and give us more information then who knows.
Based on the figures provided, and assuming an Optional Purchase Payment/GFV of £15K* and 6%* Flat/~12% APR (i.e. usurious main dealer used car rates), I believe the interest payable over the term would be ~£11K.~£11K + fees (TBC, Acceptance/Purchase Activation/etc) + £34K / 2 = ~£22.5K.
*example values to demonstrate a ~£547 monthly payment and ~£11K in interest
Milkbuttons said:
When a finance company calculates the 50% they include your optional final payment in their calculations.
You won't receive any reductions for the damage on your vehicle because you're under your mileage allowance.
You would be mad to pay out of your agreement, you would be better keeping the vehicle.
I suspect you will need to budget another few hundred for any damages on top of your VT payment.
I would contact your local MB dealership to see if they will buy the vehicle from you, I'm sure you will be in negative equity still but stock isn't freely available at the moment and if your negative equity is less than yourVT payment you're quids in.
Sorry for the delay in updating, all. Building a house keeps me very busy. You won't receive any reductions for the damage on your vehicle because you're under your mileage allowance.
You would be mad to pay out of your agreement, you would be better keeping the vehicle.
I suspect you will need to budget another few hundred for any damages on top of your VT payment.
I would contact your local MB dealership to see if they will buy the vehicle from you, I'm sure you will be in negative equity still but stock isn't freely available at the moment and if your negative equity is less than yourVT payment you're quids in.
Thanks for the help Miikbuttons. I agree re. damage, there's a tiny chip on the bonnet, half a dozen nicks in the windscreen and the alloys (diamond cut) are rather scuffed. There's also one tear in the fabric and the drivers' seat is rather worn on the side. I will argue the toss on wear and tear on much of this, but suspect I'll have to pay for the wheels, unfortunately.
I get that I'm essentially "throwing away" £3.6k, but that's a small figure compared to my house project and I don't really have a choice as finishing the house is more important. We've been told at work that we'll be working at home for months, rather than weeks. Even when we do go back in, it's likely to only be one day a week, so I can get the train. I'll actually be better off financially (no diesel £300pcm, no tax £40pcm, no insurance £60pcm) even though the £3600 represents six months car use I'll not be getting. We've got my wife's car still.
I like the dealer idea, but my mileage is so high, I'll only get about £17k-£19k and the settlement figure is £25k, I think.
charltjr said:
Interest, probably lots and lots of interest. If it’s a used car the OP is fairly likely to be tucked up at a nasty APR, but unless they come back and give us more information then who knows.
This must be the answer. I'm used to buying cars using a loan and paying c.£1.5k-£2k interest over four years or something. I was stupid not to look at this properly at the time...but then I didn't know about COVID or that I'd be building a house. elvis80 said:
timbo999 said:
Agreed... as someone else pointed out the 'missing' £9k could be the balloon payment.
GFV was £15k, I believe. I'm struggling to find the paperwork because of the house move. jw673 said:
~£11K + fees (TBC, Acceptance/Purchase Activation/etc) + £34K / 2 = ~£22.5K.
As above, based on that I'd guess the APR is circa 12% (~£11K in interest). The GFV is key to the calculation.Get a settlement figure (Mercedes dealer can help with this or you may even be able to do it online) and then see what the value of the car is to sell (try WBAC for a rough idea) and see if it works out better just selling the car to either a specialist or WBAC/Mercedes depending on the value and them settling the finance?
VT is half of total amount payable and should be set out in your original finance agreement.
By the sounds of it, you are VT'ing early (haven't paid 50% yet) and are asking for the £3.6k payment to take you to 50% paid. They will pursue you for damage to the car regardless of whether you are under your mileage limit or not
By the sounds of it, you are VT'ing early (haven't paid 50% yet) and are asking for the £3.6k payment to take you to 50% paid. They will pursue you for damage to the car regardless of whether you are under your mileage limit or not
ChrisDT said:
Get a settlement figure (Mercedes dealer can help with this or you may even be able to do it online) and then see what the value of the car is to sell (try WBAC for a rough idea) and see if it works out better just selling the car to either a specialist or WBAC/Mercedes depending on the value and them settling the finance?
Sadly it doesn't. Settlement is £24k and I reckon it's worth £19k as it's got such a high mileage @ 43k on a 67 plate (AMG line, Premium pack, E220). A dealer would only give me £17k at the most, I reckon. Gassing Station | Car Buying | Top of Page | What's New | My Stuff