Anyone VT'd their car finance?
Discussion
If so, how did it go. We find ourself in a position where we really don't need three cars and as much as I love my wee mini, it will reach half term of its deal this summer, and i am considering handing it back, unless it's a complete ball ache!! It is cheap enough that we can just keep it as a spare/Sunday car, but I'm pondering options..
It is a simple and pain free process, although it does leave a marker on your file for vehicle financing (who generally don't like people who habitually VT). This is different to your creditworthiness reports which it doesn't impact. Only some companies that provide PCP financing for vehicles share this data.
If you'd like to PCP again then my advice would be against it.
If you'd like to PCP again then my advice would be against it.
There shouldn't be an impact on your ability to raise finance or PCP in future.
Just to be sure, when you're saying "reach half term of its deal" you know that it's half of the financed amount, which includes the final repayment? i.e. if it's a 20k car with an 8k balloon you can VT once you have paid back £10k total, rather than 18 out of 36months?
Apologies if you're already aware of this but it seems to be a common misconception had by many and it would sting to to plan it all out, make the decision and then find out that there's a significant financial cost to end at this point.
Just to be sure, when you're saying "reach half term of its deal" you know that it's half of the financed amount, which includes the final repayment? i.e. if it's a 20k car with an 8k balloon you can VT once you have paid back £10k total, rather than 18 out of 36months?
Apologies if you're already aware of this but it seems to be a common misconception had by many and it would sting to to plan it all out, make the decision and then find out that there's a significant financial cost to end at this point.
Pegscratch said:
There is; we host that database too.
There is a difference between an individual who VTs every PCP deal and someone who has VT'd once. I didn't say there is no log of it happening, I'm saying you shouldn't find that it makes it difficult to raise finance again. Given that the OP is having to ask about the process it would be safe to assume they are not a habitual VT'er
It's HP? Get a settlement figure and, on the basis the car is worth more than you owe, pay off the finance and pocket the change.
You can use services like motorway to sell and do it all for you for less of a ball ache, or sell privately, getting the buyer to pay the finance company directly and then you the remainder.
You can use services like motorway to sell and do it all for you for less of a ball ache, or sell privately, getting the buyer to pay the finance company directly and then you the remainder.
Your paperwork should list the VT amount you need to get to. We have a Mini on PCP and there is literally a section on the contract which states the amount needed to VT the car, i.e. 50% of the total cost including interest.
I am unsure whether to do ours or keep it at the moment, the thought of selling privately makes me shudder and trade in would be less than we owe, despite being over 3 years into a 4 year deal and having paid off almost 50% of the cost.
It doesn't leave a 'marker' on your credit report in the same way a default does, it just lists the agreement as Voluntary Terminated rather than Settled.
You might find that same finance company wouldn't lend to you again but its not going to cause a problem for you getting credit in general.
Obviously the condition of the car matters so if you have anything that is not wear and tear then you mind end up with a bill so might wanna factor in a couple of hundred quid for this unless you are confident the car is in decent condition all round.
I am unsure whether to do ours or keep it at the moment, the thought of selling privately makes me shudder and trade in would be less than we owe, despite being over 3 years into a 4 year deal and having paid off almost 50% of the cost.
It doesn't leave a 'marker' on your credit report in the same way a default does, it just lists the agreement as Voluntary Terminated rather than Settled.
You might find that same finance company wouldn't lend to you again but its not going to cause a problem for you getting credit in general.
Obviously the condition of the car matters so if you have anything that is not wear and tear then you mind end up with a bill so might wanna factor in a couple of hundred quid for this unless you are confident the car is in decent condition all round.
CheesecakeRunner said:
Regarding the second part, not sure I agree. On my credit report that VT appears exactly the same as another two car finance agreements that were paid off.
Did you intentionally leave off the last bit of the post you quoted that explained exactly that situation?ExcitableBoy said:
Who are we, and what is that marker?
What is the point in anonymity if I tell you who I am?However, the marker is such that the agreement was "Settled - VT", as opposed to "Settled". A number of lenders are taking this into account for PCP specifically where VT is an option, and I believe PCH providers are starting to pay attention to it as these people can often look to return cars early under lease. It does not affect your creditworthiness in any other measure, so it is not a factor in applying for a personal loan, credit card or mortgage etc. A single instance is unlikely to give many lenders a cause for concern but habitual VTers are likely to find themselves with far fewer options - as ever though, this information is just information and decisioning on that information is driven by lenders, not those providing that information.
J1990 said:
Just to be sure, when you're saying "reach half term of its deal" you know that it's half of the financed amount, which includes the final repayment? i.e. if it's a 20k car with an 8k balloon you can VT once you have paid back £10k total, rather than 18 out of 36months?
Apologies if you're already aware of this but it seems to be a common misconception had by many and it would sting to to plan it all out, make the decision and then find out that there's a significant financial cost to end at this point.
Not quite. The VT threshold is 50% of the Total Amount Payable, which includes any upfront deposit or part-exchange equity, any deposit contribution from the dealer/manufacturer/finance company, plus interest and fees. Apologies if you're already aware of this but it seems to be a common misconception had by many and it would sting to to plan it all out, make the decision and then find out that there's a significant financial cost to end at this point.
So the car may have cost £20K, but you could have put in £4K up front, bringing your financed amount down to £16K. But your interest and fees may add another £2K. Therefore the total amount payable is £22K with a VT threshold of £11K. You've already put in £4K, so you will hit your VT threshold when you've made another £7K of monthly payments.
The op hasn't said he wants to purchase a new car but how to VT.
We VTd a BMW a few weeks ago, nothing to pay, email from BMW to confirm, BCA took the car away.
First time we've done this,made sense as the car was sat around and £450 a month could be used elsewhere.
Does it leave a marker, does it matter, not sure. Car manufacturers want to sell cars, if they see 3 years of payments but VTd or settled early, so what?
I don't think I've had a car fulfill the PCP or HP commitment, either settled or sold early, BMW finance still welcome me back.
We VTd a BMW a few weeks ago, nothing to pay, email from BMW to confirm, BCA took the car away.
First time we've done this,made sense as the car was sat around and £450 a month could be used elsewhere.
Does it leave a marker, does it matter, not sure. Car manufacturers want to sell cars, if they see 3 years of payments but VTd or settled early, so what?
I don't think I've had a car fulfill the PCP or HP commitment, either settled or sold early, BMW finance still welcome me back.
knitware said:
The op hasn't said he wants to purchase a new car but how to VT.
We VTd a BMW a few weeks ago, nothing to pay, email from BMW to confirm, BCA took the car away.
First time we've done this,made sense as the car was sat around and £450 a month could be used elsewhere.
Does it leave a marker, does it matter, not sure. Car manufacturers want to sell cars, if they see 3 years of payments but VTd or settled early, so what?
I don't think I've had a car fulfill the PCP or HP commitment, either settled or sold early, BMW finance still welcome me back.
Any charges for Damage?We VTd a BMW a few weeks ago, nothing to pay, email from BMW to confirm, BCA took the car away.
First time we've done this,made sense as the car was sat around and £450 a month could be used elsewhere.
Does it leave a marker, does it matter, not sure. Car manufacturers want to sell cars, if they see 3 years of payments but VTd or settled early, so what?
I don't think I've had a car fulfill the PCP or HP commitment, either settled or sold early, BMW finance still welcome me back.
I am interested as I am unsure if you VT our Mini and buy a cheap run around for the few miles I do but all alloys have marks and there is a couple of scratches etc
Thanks for all these helpful replies. I now work two miles from home, we don't need three cars, nor do I need a 60mpg Mini so I will look into it. One concern I have is that the car has been serviced by a specialist, not Mini, but it did not have a fsh when I bought it
Edited by biggbn on Thursday 25th March 15:34
ZX10R NIN said:
Find out the settlement figure if the car is worth more on the used market then sell it, plenty of people will buy it from you, in most cases they pay the finance company direct & the transfer you the difference.
I bought and sold cars for many years and in all honesty could not be bothered with the hassle of selling it privately...am undecided yet, love the wee car!None of this info should really be a revelation - it's in the documentation of the agreement (or has been on all of mine over the years).
That said, I've never used the option. But that was down to circumstance rather than anything else.
But agreed: the one that catches people out is the value rather than duration bit.
Trying not to derail the thread, but I thought this information is part of the buyer's due diliegence. Regardless, good luck with it all
That said, I've never used the option. But that was down to circumstance rather than anything else.
But agreed: the one that catches people out is the value rather than duration bit.
Trying not to derail the thread, but I thought this information is part of the buyer's due diliegence. Regardless, good luck with it all
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