Discussion
Good evening,
A friend has a car on HP and has a query about options.
I have never leased / HP a car before so can’t offer much other than reading through the T&C which I have done.
The facts as I understand them:
Car - an Audi A3 TFSI bought approved used through Audi at 1 year old.
Cost - the car was up for £22,000. Paid about £6,500 initial payment then 48 x £250 with a final payment of circa £9,500 bringing the total cost to around £28,000.
Car was purchased in Dec 2017 so about 2 1/2 years into a 4 year term.
Termination - it appears that if the car is returned, and at least £14,000 has been paid, then the car can be returned early. I assume this gives them a car the can re-sell and also significant money to cover interest, depreciation etc?
I know all these things differ, and a copy of the paperwork is probably needed, but is there any generic guidance? We have tried speaking with Audi financial (loan provider) but no joy yet.
The ideal would be to terminate now, assuming car is in good order, the circa £14,000 has been paid and the mileage is within limits (it is), and pick up something bought outright.
Thank you.
A friend has a car on HP and has a query about options.
I have never leased / HP a car before so can’t offer much other than reading through the T&C which I have done.
The facts as I understand them:
Car - an Audi A3 TFSI bought approved used through Audi at 1 year old.
Cost - the car was up for £22,000. Paid about £6,500 initial payment then 48 x £250 with a final payment of circa £9,500 bringing the total cost to around £28,000.
Car was purchased in Dec 2017 so about 2 1/2 years into a 4 year term.
Termination - it appears that if the car is returned, and at least £14,000 has been paid, then the car can be returned early. I assume this gives them a car the can re-sell and also significant money to cover interest, depreciation etc?
I know all these things differ, and a copy of the paperwork is probably needed, but is there any generic guidance? We have tried speaking with Audi financial (loan provider) but no joy yet.
The ideal would be to terminate now, assuming car is in good order, the circa £14,000 has been paid and the mileage is within limits (it is), and pick up something bought outright.
Thank you.
I don’t think your maths is correct, I believe the key point is to VT the borrower needs to be 50% repaid on the total amount borrowed. In this case, that’s half of £21,500, so at £250 a month VT is possible from month 43 of the 48 month agreement.
Happy to be corrected, but I don’t believe paying a large deposit counts against the finance. It reduces the overall amount borrowed but is effectively excluded from the finance numbers. VT on PCP only tends to be possible very late in the agreement because of the final payment making up a large amount of the total amount borrowed.
Happy to be corrected, but I don’t believe paying a large deposit counts against the finance. It reduces the overall amount borrowed but is effectively excluded from the finance numbers. VT on PCP only tends to be possible very late in the agreement because of the final payment making up a large amount of the total amount borrowed.
Terminator X said:
That sounds like PCP as with HP you just hand the car back at the end of term. Usually no "deposit" with HP other than a few months of payments upfront.
TX.
You’re confusing HP with leasing.TX.
Good old fashioned HP is a loan secured on the car, but the car is not yours until it’s paid off. Basically a PCP with a £0 balloon/GMFV.
junglie said:
Car - an Audi A3 TFSI bought approved used through Audi at 1 year old.
Cost - the car was up for £22,000. Paid about £6,500 initial payment then 48 x £250 with a final payment of circa £9,500 bringing the total cost to around £28,000.
Car was purchased in Dec 2017 so about 2 1/2 years into a 4 year term.
Termination - it appears that if the car is returned, and at least £14,000 has been paid, then the car can be returned early. I assume this gives them a car the can re-sell and also significant money to cover interest, depreciation etc?
Ouch, so if seen through to the end your friend would have paid £28k for a £22k car. I can see why people lease them, surely it would have been much cheaper to lease a brand new one for two years?Cost - the car was up for £22,000. Paid about £6,500 initial payment then 48 x £250 with a final payment of circa £9,500 bringing the total cost to around £28,000.
Car was purchased in Dec 2017 so about 2 1/2 years into a 4 year term.
Termination - it appears that if the car is returned, and at least £14,000 has been paid, then the car can be returned early. I assume this gives them a car the can re-sell and also significant money to cover interest, depreciation etc?
Are they wanting to terminate because they are sick of finance or are they looking to get a new car?
I know, £1500 a year interest over 4 years to have a car that is 4 years down the depreciation curve!
I guess, if you pay the final settlement to own the car, and then sell it, then you ‘make’ money back.
£28,000 overall, sell for £10,000 and you pay £18,000 for 4 years motoring working out as £4,500 a year so not completely rubbish but still!
Wants to terminate as spends up to 6 months away a year so does not make sense.
I guess, if you pay the final settlement to own the car, and then sell it, then you ‘make’ money back.
£28,000 overall, sell for £10,000 and you pay £18,000 for 4 years motoring working out as £4,500 a year so not completely rubbish but still!
Wants to terminate as spends up to 6 months away a year so does not make sense.
Sheepshanks said:
It does. VT is half of the total amount of the agreement, not the amount financed.
OP is correct - is at VT point now.
Fair play, wasn’t sure. OP, I usually found it easier to email VWFS, they were always quite responsive and it meant I didn’t have to sit in any telephone cues.OP is correct - is at VT point now.
charltjr said:
Fair play, wasn’t sure. OP, I usually found it easier to email VWFS, they were always quite responsive and it meant I didn’t have to sit in any telephone cues.
I’m pretty sure the 50% rule applies to the amount financed (ie excludes the “deposit”) but does include interest and fees on the amount financed. For clarity, the balloon payment is included in this figure. Agree that VWFS are helpful once you get through to the right department..!
OMITN said:
I’m pretty sure the 50% rule applies to the amount financed (ie excludes the “deposit”) but does include interest and fees on the amount financed. For clarity, the balloon payment is included in this figure.
It's 50% of the total payable price, everything included. Poor advice is dangerous.
journeymanpro said:
It's 50% of the total payable price, everything included.
Poor advice is dangerous.
Fair enough, I’m wrong. To be honest I’ve never done it but am aware of it. Happy to be corrected as this is something not to get wrong. Poor advice is dangerous.
A quick google tells me the important term is “total amount payable”. I had taken that to be the total borrowed as opposed to the total cost (ie including deposit).
Presumably though the OP can just pay up to 50% of the total amount payable rather than having to wait to get to that point in time (if the car is sitting doing nothing and costing money in insurance and tax)?
Seems like a bit of confusion over what type of finance agreement he has but his termination rights, assuming he has any, will be in black and white in the agreement itself, so he should check there to see what he has signed up for.
Anything else on here is just speculation until the type of finance agreement he is locked into is established beyond PH doubt.
Anything else on here is just speculation until the type of finance agreement he is locked into is established beyond PH doubt.
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