Settlement Figure on a PCP

[omniflow]

I've just requested a settlement figure on a PCP I took out about 18 months ago, and whilst it looks straightforward on the surface I can't help but think it's a bit odd.

I used an online system and got a settlement letter emailed to me immediately, so I presume it's 100% automated.

I submitted the request on 2nd August, and got back a figure that's valid until 29th September. Assuming you read the entire thing, it states that this figure assumes you make any payments between date of the letter and the settlement date. For me that's 2 payments, so around £900.

So, I can settle now with a lump sum, pay another £900 and then own the car outright. Or, I can settle in 8 weeks time by paying the same lump sum, pay the same £900 along the way and still own the car outright. Now, I realise that keeping the balance in my current account for an additional 8 weeks will earn me the square root of fk all in interest, but I would have thought the finance company would have slightly tighter parameters for re-payment.

I might wait until the next payment has gone out and re-request a settlement figure and see what's changed.

[Lee540]

I settled one just a few weeks ago with Blackhorse.

One month payment came out automatically when I made settled the account but Blackhorse put it straight back as a refund.

[Sheepshanks]

omniflow said:

So, I can settle now with a lump sum, pay another £900 and then own the car outright. Or, I can settle in 8 weeks time by paying the same lump sum, pay the same £900 along the way and still own the car outright. Now, I realise that keeping the balance in my current account for an additional 8 weeks will earn me the square root of fk all in interest, but I would have thought the finance company would have slightly tighter parameters for re-payment.

I guess they're saying you owe us £xxxxx in 8 weeks, but you can send it now if you like.

The CCA termination law basically allows two months maximum interest penalty - it's actually something like 28 days penalty and 30 days notice, but it's effectively two months. So the finance house is just taking that to the max (as is pretty standard). They could have given you a figure to settle immediately, and it could have been slightly less in total if they hadn't charged you the 2 months interest. But they didn't want to.

[omniflow]

Sheepshanks said:

I guess they're saying you owe us £xxxxx in 8 weeks, but you can send it now if you like.

The CCA termination law basically allows two months maximum interest penalty - it's actually something like 28 days penalty and 30 days notice, but it's effectively two months. So the finance house is just taking that to the max (as is pretty standard). They could have given you a figure to settle immediately, and it could have been slightly less in total if they hadn't charged you the 2 months interest. But they didn't want to.

Thanks for that - I was unaware of the details of the regulation around termination. As you say, they can, so they are.

I just need to make sure that I don't get a new settlement figure between now and the end of September, as I assume that will re-set the clock and it will be another 8 weeks.

[Sheepshanks]

omniflow said:

Thanks for that - I was unaware of the details of the regulation around termination. As you say, they can, so they are.

I just need to make sure that I don't get a new settlement figure between now and the end of September, as I assume that will re-set the clock and it will be another 8 weeks.

I don't know the actual settlement process - do you need to tell them you intend to setlle, or is making the request considered to be giving them notice?

I've only ever run them to the end or Withdrawn (within 14 days) and withdraw I had to call and say "I want to Withdraw".

[tallpaul26]

You’ve requested a settlement figure thats got a period of validity based on the interest calculation applied. If you make payments between now and paying that settlement, you’ll be refunded after the account is closed.

The two times I’ve done this, I’ve automatically been refunded on both occasions (VWFS and Alphera).